Cuba will Eliminate Half a Million Jobs in Six Months

Cuba said this Monday  that will eliminate more than 500,000 public jobs in the next six months, a drastic reduction of 10 percent of its state workforce will be  accompanied by an expansion of the private sector.

President Raul Castro has said he intends to remove more than one million unnecessary government jobs that are holding back economic recovery.

“In keeping with the process of updating the economic model and economic projections for the 2011-2015 period is expected (…) reduction of more than 500,000 state sector workers and in parallel the increase in non-state sector “said the Central de Trabajadores de Cuba (CTC) in a statement.

Termination or relocation of the workforce over the next six months is the boldest step taken so far by Raul Castro, who took four years in power to his brother Fidel with the promise of improving the cubans  life quality.

“Our state can’t and should continue to keep businesses productive entities, services and budgeted with inflated payrolls and losses weigh down the economy, prove counter productive, creates bad habits and distort the behavior of workers,” added the CTC.

According to sources in the ruling Communist Party, some 250,000 new licenses for self-employed workers will start to be issued in October, seeking to absorb some of the dismissals. There are currently some 143,000 “self-employed.”

These are small businesses such as restaurants, cafes, garages, carpentry, manicures and even clowns.

The Government hopes that these licenses will help generate some 465,000 new jobs, not state, because for the first time in decades the self-employed may subcontract labor.

The new regulations for small businesses will be more flexible, according to Communist sources. The self-employed may, for example, first access to credit and do business with state entities.

But also have to pay sales tax, income and contribute to social security.

It is still unclear how the sale will be organized input to the self-employed, monopolized by the state with a surcharge leaving little profit margin.

The Government has promised that no one will be homeless and offered to relocate surplus employees in sectors such as agriculture, construction, education and police.