Cuba to allow small private businesses in 138 fields

Sep 25, 2010, 15:07 GMT

   Havana - Cuban authorities will issue licences to open small private businesses starting next month in 138 different areas of economic activity, as well as to rent out homes, Cuban state media reported Friday.

The move follows Cuba's announcement earlier this month of plans to eliminate 500,000 jobs in its sprawling government sector by the first quarter of 2011.

The Cuban Communist Party daily Granma published a list of trades that will be allowed to engage in self-employment, including masons, carpenters, plumbers, electricians, massage therapists, typists, hairdressers, computer programmers, domestic personnel, driving instructors and flower salesmen.

'Those who are registered as self-employed and those who join them will have the obligation to pay taxes on personal income, on sales, on public services and on the use of labour force, beyond contributing to social security,' Granma said.

'Let he who earns more pay more, that is the principle of the new tax regime, which is set to increase the sources of income for the state budget and to attain an adequate social distribution of these.'

In 83 of the 138 activities, people will be allowed to hire labour.

According to Granma, Cuba's Central Bank is evaluating the possibility of granting loans to help businesses establish themselves.

Currently, Cubans are allowed to rent out no more than two rooms. Starting next month, they will be able to rent full houses. Home owners will be allowed to hire labour and to rent out their homes to Cubans living abroad.

Private restaurants, so-called 'paladares,' will be allowed to seat up to 20 people, instead of the current 12, and they will be allowed to serve dishes that are currently banned, like those containing potatoes, seafood or beef.

   Cuban President Raul Castro told Parliament on August 1 that state-sector payrolls would be reduced. The state sector accounts for 95 per cent of economic activity in communist Cuba. As an alternative, Castro said, the state would seek to promote private- sector work, allowing Cubans to launch small businesses.

   The Cuban economy is in a severe crisis, a consequence of the global financial crisis, the decades-old US embargo on the island and the devastation caused by hurricanes in 2008, as well as chronic low productivity in many of its state companies.

   The government has launched a slow process of reform, though it insists that it will not give up socialism.

   Even historic Cuban leader Fidel Castro said in an interview published this month in the US magazine The Atlantic that the Cuban model is in trouble.

   'The Cuban model doesn't even work for us anymore,' he told US journalist Jeffrey Goldberg.

   Later, Castro backtracked. While he admitted to having said what Goldberg quoted him as saying, he argued that his comment had been misinterpreted.

   'My idea, as everyone knows, is that the capitalist system no longer works either for the United States or for the world, which it leads from crisis to crisis, every time more serious, global and repeated, from which one cannot escape,' Castro said in Havana.