Cuba allows private work in most sectors – 07/02/2021 – Worldwide

Cuba announced on Saturday (6) a substantial expansion of private activities authorized by the government, a major reform in the socialist country where the state and public enterprises dominate the economy.

The measure, which was announced in August by the Minister of Labor, Marta Elena Feito, was approved Friday (5) by the Council of Ministers, according to the daily Granma, of the Communist Party of Cuba.

According to Feito, as part of “the improvement of (private) self-employment”, “the previous list of 127 activities” that Cubans had been able to carry out so far has been eliminated and has been extended to “more than 2 thousand “. .

The official said only 124 activities are fully or partially restricted, but did not elaborate.

As on previous occasions, sectors such as the press, health and defense, deemed strategic by the government, will remain vetoed by the private sector, which was severely affected by the tightening of the US embargo under the Donald Trump administration. and the coronavirus pandemic.

“Unblocking the processes: our Council of Ministers expands the possibilities for self-employment and eliminates restrictions,” President Miguel Díaz-Canel said on Twitter.

Done stressed that the reform removes the links between the productive forces and will allow Cubans to engage in a wider range of activities.

Economy Minister Alejandro Gil said Cuba had taken “an important step towards increasing job creation, in line with the reform of the country’s exchange rate regime,” referring to the reform. complex economic plan which came into effect on January 1 after 2020, it recorded a rate of 11%. declining GDP.

The authorities have indicated that the strong economic adjustment, which included wage reform, price increases and the elimination of subsidies, aims to help increase domestic production and stimulate job creation.

This is “a very positive step, even if it seems to be late”, because “so far self-employment has worked in a very limited way,” said economist Ricardo Torres, University of Havana. .

“Exchange rate reform needed to be accompanied by measures that would make job creation more flexible” and, in the private sector, there may be an important source, the economist said.

Over the past decade, the government has expanded the activities Cubans can do on their own, focusing on food, transportation, rental homes for tourism, and hairdressers, among others.

Cuba, with 11.2 million inhabitants, currently has over 600,000 self-employed workers, who represent 13% of the country’s workforce. Public enterprises represent 85% of the island’s economy.

According to official indicators, in June of last year, more than 247,000 private workers, or nearly 40% of the total, had requested the suspension of their licenses, due to the economic situation.

Oniel Díaz, an entrepreneur who has a private consultancy firm, pointed out that for years Cubans were “able to undertake even under very unfavorable conditions”, in the face of “shortages of raw materials, inefficient regulations and economic sanctions “.

“The new scenario (…) opens the way for there to be no setbacks and for us to play an increasingly important role in the national economy,” he said.

To speed up the demand for licenses, the government has also announced the creation of a one-stop shop. “It is important that this starts well,” Prime Minister Manuel Marrero said.

For economist Pedro Monreal, the question is whether the flexibility of private labor “would be the first” step towards the approval of small and medium-sized private enterprises, which the government has been studying since 2016.

“Advancing reform should prioritize private small and medium-sized enterprises, as they offer a higher productivity cap for the workforce, compared to self-employment,” Monreal said on Twitter.

For Torres, “we should also see how the banking sector will support this growth, with advice and, mainly, credit.”

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