Tuesday, December 27, 2011

Monday, December 26, 2011

Let the private sector do it

Today’s Granma announces another small step toward reducing government payrolls and expanding private employment.

Beginning next month, employees of provincial enterprises of “personal, technical, and home services” will be converted into private entrepreneurs who rent their place of business from the state and set their own prices and hours of operation. This will include carpenters, photographers, repairmen, locksmiths, and other occupations.

Tax relief for entrepreneurs, and other economic news

Cuban entrepreneurs will have their income tax reduced in two ways, former economy minister and current vice president of the Council of Ministers Marino Murillo announced Friday in the National Assembly.

One tax cut comes not in the form of reduced rates but rather through an increase in the amount of income that is exempt from tax. Currently an entrepreneur’s first 5,000 pesos in income is tax-exempt; this amount has now been doubled to 10,000 pesos. That amount is nearly twice the average salary of a state sector worker (5,376 pesos per year). See story in Trabajadores.

Murillo also announced that the tax that entrepreneurs pay for each worker that they hire will remain suspended for those employing five or fewer employees. This tax was suspended last May as part of a series of measures to encourage job creation.

Other economic tidbits from the presentations of Murillo, Minister of the Economy Adel Yzquierdo, and President Raul Castro before the National Assembly:

  • Cuba expects to import 117,000 fewer tons of rice in 2012, 45,000 fewer tons of grain, and 2,000 fewer tons of powdered milk in 2012, all due to increased domestic production.

  • Employment is expected to grow by 70,000 in 2012 based on forecasts that the government will shed 170,000 from its payrolls while 240,000 jobs are created in the “non-state” sector.

  • The government is working “at an accelerated pace in the proposal for policies and transitional measures” for the creation of non-agricultural cooperatives. (Murillo)

  • A legislator from Mayari asked what can be done for state enterprises that have run out of working capital, and got some tough love from Murillo: the solution is to figure out why they are losing money and make them stop. Also: “The central government budget should receive money from the enterprises, not the other way around.”

  • Growth was 2.7 percent in 2011, an “acceptable and sustained” pace (Raul); 3.4 percent is expected for 2012.

  • The bank accounts of foreign companies that had been frozen have now been un-frozen, all of them. The freeze, a response to a liquidity crunch, prevented businesses from repatriating revenues and profits. The action is part of efforts aimed at “re-establishing the credibility of our economy.” (Raul)

The tradecraft of Alan Gross

USAID’s programs in Cuba are not covert operations run by U.S. intelligence agencies, but USAID does its best to make them seem that way, argues Fulton Armstrong, former National Intelligence Officer for Latin America (the top intelligence analyst for the region) and more recently investigator for the Senate Foreign Relations Committee.


“The programs did not involve our Intelligence Community, but the secrecy surrounding them, the clandestine tradecraft (including the use of advanced encryption technologies) and the deliberate concealment of the U.S. hand, had all the markings of an intelligence covert operation.”

“Advanced encryption technologies?”

The Christmas rush

CBS: “Twenty-nine flights from the U.S. landed Thursday at Havana’s Jose Marti International Airport, forcing airport administrators to quickly shuffle employees around to reinforce the baggage handlers and immigration officials swamped by holiday travelers, mostly – though not all – Cuban-Americans coming here to spend Christmas and New Year’s Eve with relatives.”

AP reports here on the Cuban Americans “streaming to the island” for the holidays.

2,900 prisoners to be released

This December 23 Nota Oficial announces a decision by Cuba’s Council of State to release more than 2,900 prisoners who have served substantial parts of their sentences and shown good conduct, with releases to occur “in the coming days.” The action is “in fulfillment of established policy” and responds to appeals from family members and “diverse religious institutions.” Save for a few exceptions, prisoners convicted of espionage, terrorism, murder, drug trafficking, and several types of violent crimes are not included in the reprieve.

Reuters coverage here. Video of Raul Castro’s announcement of the action here.

Human rights monitor Elizardo Sanchez called it a “shallow gesture.” I suppose that would be the case if the prisoners had all served 90 percent of their sentences, but we don’t know any of those details yet. To me it seems odd to be dismissive of the release of so many. Already, with the political prisoner releases, the number of prisoners of conscience counted by Amnesty International had fallen to zero. Elizardo keeps a list of persons convicted of politically motivated crimes, including some involving violence; I wonder if any of those will be released.

The State Department, for its part, is “deeply disappointed” that jailed USAID contractor Alan Gross was not among the 2,900 and “deplores” his exclusion. It’s as if the strategy of the U.S. government, which sent Gross to Cuba to conduct clandestine operations, is to obtain his release simply by demanding a unilateral gesture. Again, it seems that Gross is on his own and the top priority is to defend the program, not him.