Monday, August 1, 2011

The reform process continues

As cabinet officials have appeared before Cuba’s legislature in recent days, new information about economic reforms has appeared in numerous articles in the Cuban press. Here are tidbits.

Small-scale state service businesses will be turned into private entities, the minister of internal commerce said. From the Granma story: “As part of the new model of economic activity, the rental of beauty shops and barber shops will be extended throughout the country. Also, beginning in October and on an experimental basis, this model will be employed extensively with regard to the rest of services.” See Reuters story.

In transportation, 47,652 licenses have been issued for private passenger or cargo transportation. Two taxi agencies are working on the “renting” model and ten more will soon do so. (Under that model, the company stops paying salary to drivers and instead charges them a daily fee, and drivers work as they please and keep their profit.) The ministry is studying “other business models” for services such as maintenance, tire repair, and car cleaning.

The vice minister of labor explained a number of actions taken, “all oriented toward successful implementation of new forms of employment, following the phased process of the reordering and layoffs of the labor force.” There are 325,947 cuentapropistas, more than double the number last fall. Three new lines of work for private entrepreneurship have been added, including that of insurance agent. All may now hire employees. There was discussion of health and zoning issues related to the new entrepreneurs. The vice minister “spoke of the need to know and respect laws, and also to avoid excesses, that tendency on the part of some to prohibit without reason and to think that everything can be regulated.” He said the government is studying the possibility of renting business premises on Havana’s main arteries to cuentapropistas (something that is already being done in several areas.)

Agriculture: Production shortfalls in 11 categories of foodstuffs, “six or seven” of important impact on the goal of reducing imports, will cause a 25 percent increase in planned food imports this year (from $1.2 to $1.5 billion).

The Central Bank president discussed the still-developing policies regarding credits for entrepreneurs. The 3,000-peso limit on loans to individuals will be dropped. Priority for loans will be given to those who need construction materials to build or improve their own housing; farmers who need implements; and entrepreneurs who need supplies or equipment. Also, to facilitate entrepreneurs providing goods and services to state entities, the government will eliminate limitations on state entities’ ability to make payments to private individuals.

[Photo of the Vedado cafeteria, La Cocinita del Medio]

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