Cuba to slim state companies

HAVANA - The Cuban government expects to slash about 110,000 jobs from state-run companies in a bid to reorganize the work force of the country's bloated public sector as part of its economic reform.

The measure is included in the over 300 reform programs promoted by President Raul Castro's government to "update" the socialist model in the country and enhance efficiency and productivity to overcome the serious crisis affecting its economy in the last 20 years.

The Cuban government plans to eliminate half of these jobs gradually till 2015, sources from the official Workers' Central Union said Saturday, adding that about 140,000 jobs were cut in 2011 in the first stage of the country's labor reorganization, which encourages "self-employment" in the 181 allowed private businesses.

The labor reorganization also seeks to change the labor structure in the country, where most of the work force is in the services sector, instead of the production sector.

The government expects that in a few years the private sector will provide some 50 percent of gross domestic product (GDP), as part of the ongoing  "upgrading" of the socialist economic model.

Currently 95 percent of Cuba's GDP is produced by state-run companies, but officials said that in four or five years private workers are expected to contribute to half of the country's GDP.

The Cuban officials also predicted that the size of the "self-employed" workers in the country is expected to expand to over 600,000 by the end of 2012, which will help the provincial governments to improve their efficiencies.

According to Cuba's official data, there are currently 371,200 "self-employed" workers in the island country.

The changes are also aimed to cut the excessive expenditures in an urgent way, without affecting the social benefits, mainly in health and education sectors.

Castro also pledged to cut the country's traditional "excessive and undue" subsidies to products and replace them by subsidies to people who really need them.

The authorities have issued a decree to allow bank subsidies to people with less resources and living in bad conditions to buy construction materials or pay the specialized workers to repair, build or rebuild their houses.

Cuba has a housing deficit of more than 600,000 units, and the government intends to ease it gradually with support to the affected population.

That would be the first step of the official policy of subsiding people in need instead of supplying products for the whole Cuban population.

Castro has repeatedly said that, despite removing "undue" subsidies, "the Revolution will not abandon anyone in need."

Despite the economic changes and the emergence of private workers, the Cuban government pledged that the country's social system will not change.

Cuban leaders have reiterated that there will be no political changes in the country and that "we will change anything that needs to be changed, but not the political system."

Castro's over 300 reforms were approved in April 2011 at the Sixth Congress of the Cuban Communist Party after six months of hot debates throughout the country.