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Brooks Wilson's Economics Blog: Economic Reform in Cuba

Wednesday, September 15, 2010

Economic Reform in Cuba

In “Say It Ain’t So, Fidel!”, I wrote about Fidel Castro’s statement that “The Cuban model doesn't even work for us anymore.”  New evidence of economic reform was reported by Paul Haven and Will Weissert in “Cuba to Cut 500,000 Government Workers.“
Cuba on Monday said it is laying off nearly half a million workers, an eye-popping figure in any country, but especially in a nation where the government so totally dominates the economy.

The shift would mean that one-tenth of the island's 5.1 million-strong work force will be looking for jobs in the private sector by April 2011, a drastic change that could mean a radically altered economic outlook, especially for Cubans in their 20s and 30s who have known nothing but a paternalistic communist system ushered in by Fidel Castro in his 1959 revolution.

The changes are the most dramatic yet in a reform program that began when Raul Castro permanently took over the presidency from his brother in 2008 - but which have sputtered in fits and starts since then.

But they were not entirely surprising. Raul Castro has warned for years that the state could no longer afford to subsidize every part of Cuban life, nor pay workers who contribute little. In April, he floated the idea that up to 1 million workers were superfluous and must go.
The government announced changes in property rights to help the newly unemployed.
To soften the blow, the statement - which appeared in state newspapers and was read on television and radio - said the government would increase private-sector job opportunities, including allowing more Cubans to become self-employed. They also will be able to form cooperatives run by employees rather than government administrators, and increasingly lease state land, businesses and infrastructure…

Larry Birns, director of the Washington-based Council on Hemispheric Affairs, said a series of small changes - such as privatizing some state-run barbershops, licensing more private taxis and distributing fallow land to private farmers - have moved Cuba toward economic reform. While none of those were blockbusters, Birns said, Monday's revelation has the potential to be one.

"Cuba is rapidly becoming like any other country," he said. "It is not going back. These are big changes."
Economic rights are civil rights.  The U.S. should devise polity to support reform in Cuba.  I believe that the reform should focus on increasing contact between average Americans and Cubans. 


  1. It is good to see that Cuba is coming out of the communist era that they have been in for so long. I like the fact that Raul Castro is basically trimming the fat from the dwindling economy in Cuba, but yet providing a opportunity for those people to become self employed in the private sector. Giving them this option will weed out the ones who want to work from those that don't.

  2. I think Cuba's reform period will mark a new era for the Communist country. The decrepit private sector should receive thousands of new job seekers, and it may well grow in order to meet the demand. The country will suffer through growing pains as it responds to the mass, though probably temporary unemployment, that will occur. Those with the desire to work will venture away from the comforting eye of the government. This exodus should prove to be a godsend for Cuba by creating a more diverse national market.

    Santiago Vallejo-Gutierrez, University High School