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| A private market in Havana |
By Marc Frank, Reuters, November 28, 2011
The Cuban government will begin contracting out some
services to the private sector next year in a break from the state-dominated
past aimed at helping small business develop, government insiders said on Monday.
They said food and cleaning, construction and some transportation
services, all of which are currently done by government workers, were among
those that would be contracted out in the future as Cuban leaders push ahead
with more than 300 reforms to modernize the island's Soviet-style economy.
President Raul Castro is encouraging private sector growth to create
jobs for the one million employees he hopes to slash from bloated government
payrolls over the next few years. His goal is to strengthen Cuban communism to
assure its future.
More than 350,000 people are now self-employed, more than double the
number of two years ago, although most are small operations based in homes.
Their ability to grow has been hindered partly by a lack of capital
and access to government business, which is significant because the state
controls most of the economy.
But new credit and banking regulations that take effect December 20
will allow small businesses for the first time to obtain loans and, along with
private farmers, to open commercial accounts, a prerequisite for doing business
with the state.
The measures also lift a 100 peso- (roughly $4-) cap on business
between state enterprises and private individuals.
"It is very positive for the development of the non-state sector
that it now has at its disposal new financial instruments that before were
available only to state companies and joint ventures with foreign
companies," said a local economist, requesting anonymity due to a ban on
talking with foreign journalists.
"It paves the way for business between the new non-state sector
and the state."
Cuba expert Phil Peters at the Lexington Institute
think tank in Arlington, Virginia, said the measures, in addition to helping
the private sector, should make the government more efficient and were
indicative of a larger change.
"It is another sign that the socialist state is shedding
longstanding prejudice against private enterprise," he said.
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