The unemployment problem

Cuba’s Juventud Rebelde seems to be setting out to prove that just because a newspaper is state-controlled, it doesn’t have to be predictable or dull.

In the past year it has exposed the dysfunction in many Cuban state enterprises and serious problems in delivery of dental care. Yesterday’s paper contained an opinion piece that criticized the “overwhelming unanimity” in Cuba’s National Assembly, citing the fable “The Emperor’s New Clothes” to chide the legislature for the scarcity of debates where opposing views are voiced.

It also contained a long article on Cuba’s unemployment figures that showed what a stroll through just about any Cuban neighborhood reveals: that many more youths are unemployed than official figures admit, or as the article put it, “the figures are never a reflection of reality.” The article (in English, here) explained how undercounting occurs; it revealed that in the province of Granma, social workers counted about 18 times more unemployed than official figures show; and it pointed out that programs to bring youths and others into the workforce are not always successful because in many cases the economy is not generating enough new jobs, or the right kind of jobs, to give opportunities to graduates. In light of this article, it will be interesting to see how government ministers treat the employment issue when they give their annual accounting to the National Assembly next month.

It will be even more interesting to see if Cuban economic policy confronts this problem.

If Cuba undertakes economic reform, it could take two main directions. One would be to strengthen the state sector by changing policies governing state enterprises or by increasing foreign investment, possibly by changing the terms offered to joint venture partners or opening new sectors of the economy to foreign participation.

The Economist, for example, reports that Cuba is reaching out to foreign investors, looking for partners in tourism development projects, and may be close to a deal with Dubai Ports World to build a container port at Mariel. In addition to serving Cuba’s needs now, the Economist sees this project as a post-embargo play because it would enable he Mariel port to become a hub for U.S. shipping, given its proximity to Florida and Gulf ports.

Or Cuba’s govern-
ment could opt for an opening that would affect Cubans more directly, by easing the restrictions on their own economic initiative. The agriculture sector is a prime candidate, frequently mentioned in the discussion of the recent economic debate.

Another job-generating possibility involves Cuba’s small entrepreneurs, the subject of this article (in Spanish) from Palabra Nueva, the magazine of Havana’s archdiocese. The author argues that if policies are liberalized, many black-market entrepreneurs would get licenses and join the legal sector, which would bring “benefits for the self-employed and for the authorities. For the former because they would free themselves from the permanent legal anxiety that stays with anyone on the margins of the law, while the latter [the state] could better regulate food safety, the safety of vehicles that carry passengers, the quality of inputs and raw materials, and there would be more tax revenues for the government budget.”

[Photo from Palabra Nueva]