Castro's Self-Employment Charade

Tuesday, August 3, 2010
During last Sunday's meeting of the Cuban National Assembly, which was summoned to listen to the Cuban dictator's mandate, Raul Castro announced massive layoffs, gave a staunch warning against dissident activity and announced that it would (once-again) expand limited self-employment.

Castro also rejected the concept of private property for the Cuban people and mocked analysts that anticipated market reforms.

Unfortunately though, the media failed to report on Castro's threats to dissidents, and instead just focused on the charade that is self-employment in Cuba.

Thus, head-scratching headlines like this one by the AFP:

Cuba eyes more self-employment, not market reforms

With government plans afoot to reshape Cuba's work force by cutting the bloat out of some payrolls, President Raul Castro said he would allow more small private businesses.

The economy is 95 percent in state hands at the moment. Castro's move is aimed at limiting the socioeconomic fallout from planned work force shifts that could target one million excess jobs.

Sound familiar? It should.

- Since the collapse of the Soviet Union in 1991, when faced with economic crisis, the Castro regime has consistently sought to ease domestic pressure by temporarily allowing limited self-employment (which in Cuba's totalitarian economy, is really more akin to a limited partnership with the regime).

Here's Reuters on February 23, 1995:

Self-Employment May Be Answer to Cuba's Problems

Workers here, no longer guaranteed a meal ticket for life in state industry, will have to look increasingly at areas such as self-employment if they want a job, says the country's top trade unionist.

Pedro Ross, president of the Cuban Workers Union and a member of the ruling Communist Party's Politburo, stressed in a recent interview that there was a need for a flexible labor market amid Cuba's current economic reforms [...]

Cuba is facing the obvious headache of what to do with surplus workers as it tries to pull out of deep recession triggered by the collapse of communism in the former Soviet bloc.

Some independent economists have put the number of people who would be shunted out of their jobs in an efficient economy at 1 million or more. Some say this implies a need for more radical reform, including allowing small private businesses and not just self-employment.

- Then, when the regime feels some economic relief, it begins an "ideological offensive."

Here's Reuters on July 7, 1998:

Cuba tightens controls on self-employed workers

Cuba's communist government has tightened official supervision and control of self-employed workers, increasing the state's bureaucratic squeeze on the island's very small private sector.

The tougher rules, outlined on Monday in an official newspaper, appeared to be a continuation of what critics say is an ideologically-inspired offensive by the authorities against Cuba's self-employed workers, whose numbers have dropped to around 154,000 from more than 200,000 three years ago.

- And then, when the regime feels certain economic stability, it completely reverts.

Here's the AP on June 26, 2005:

Cuba revokes licenses of some 2,000 self-employed workers Havana

Cuba's communist government has revoked some 2,000 licenses of self-employed workers across the island, part of an ongoing campaign to reassert state control over the economy, local media has reported.

Those who lost their licenses were violating rules that allow a limited number of Cubans to work for themselves, said Tribuna, a weekly newspaper [...]

The government stopped issuing self-employment licenses last fall for 40 categories of jobs, ranging from computer programming to auto body repair.

Self-employment in these professions was legalized only in 1993 during the severe economic crisis that followed the collapse of the Soviet bloc, Cuba's biggest source of aid and commerce.

New optimism based on oil prospects off Cuba's northern coast and strengthened economic ties with China and Venezuela has prompted President Fidel Castro to say it's time to recentralize state decision-making and crack down on those working for their own financial gain.

- So let's make sure not to provide the regime economic relief, in order to end its charades once and for all.