Tuesday, November 30, 2010

Amid doubts, Cubans pursue private sector dreams

Amid doubts, Cubans pursue private sector dreams
By Jeff Franks Jeff Franks

HAVANA (Reuters) – For some, it is the pursuit of a dream, for most, a
necessity. Whatever the motive, a steady stream of Cubans are taking the
government up on its offer to let them work for themselves instead of
the state.

At municipal labor offices around the country, Cubans are filing in with
plans that include everything from opening small restaurants to renting
out rooms as they seek one of 250,000 self-employment licenses to be
issued in Cuba's biggest reform in years.

About 30,000 of the permits have been handed out, state-run press
reported, and another 16,000 are pending in the first few weeks of
President Raul Castro's plan to improve the Communist-led island's
economy by expanding the private sector and cutting government's role.

The licenses are key to Castro's gamble that he can slash 1 million jobs
from state payrolls, absorb the unemployed through private businesses
and keep Cuba on the socialist straight-and-narrow for years to come.

The government, which controls most of the economy and employs 85
percent of Cuba's workforce, has outlined 178 jobs or sectors where
self-employment will be permitted. It will retain a heavy dose of
control through regulations and stiff taxes of 25 percent to 50 percent
of net income.

The reform is criticized by some experts as being too limited, but
others view it as a reasonable first step toward greater change in one
of the world's last Communist countries.

Clutching a raft of government forms, license applicants wait in line
for an opportunity they say is welcome and, despite worries about their
chances for success, worth a try.

"I have always wanted to have my own business," said Ismael Hidalgo, who
plans to leave his construction job and do what he always wanted to do
-- raise animals for sale.

"I think the measures they are taking are very good. Let each one live
from what they are capable of doing. Let them live from their own
sweat," he said, standing outside a dimly lit government office in
Central Havana.

Maria Caridad Sulton, who will open a small cafeteria, said: "I hope
that everything goes better. I think that workers will be able to see
the fruit of their labor and a little more."


Like most of the applicants interviewed, Caridad said she does not
expect to make a lot of money, only enough to supplement a meager pension.

Cubans receive various social benefits, but they earn an average salary
equivalent to about $20 a month and insist that they need more to live.

"Necessity, necessity and more necessity. If I didn't have the
necessity, I wouldn't do this," said Caridad's husband, Pedro Sarracent
Belon, a retired weight lifting coach. "This is a plan for surviving."

He and others share a concern that taxes and regulation may be too big a
burden for the new entrepreneurs, particularly in a country where taxes
have been almost nonexistent under the Communist government installed
after the 1959 revolution.

"I was born in this revolutionary process and I don't know what taxes
are," said Sarracent, 56. "I'm doing this test, but I think there are
going to be a lot of failures."

Yudenia Artiles, who plans to sells snacks in the street, was equally
skeptical because of taxes, but also because she believes Cuba's
economic problems will get worse with the planned government layoffs.

"There's no money," she said. "Now the war is going to be in the street,
a lot of competition between vendors in the street, and you're going to
always see problems."

According to government figures, 20 percent of the licenses granted so
far have gone to people who want to sell food.

Like many other Cubans, Artiles has been plying her trade illegally to
make ends meet, so a license will allow her to do it without threat of
arrest or worse.

She pulled back her shirt sleeve to show a bruised shoulder that she
blamed on a whack from a baton-wielding cop.

"The police mistreat you a lot. I have a 'bastonazo' from a policeman
for illegally selling sweets," she said.

There are other worries as well.

Many people fear that the government will open the door to private
enterprise, then close it as it did during the economic crisis of the 1990s.

While that experience has discouraged some would-be entrepreneurs, it
helped Emilio Perez decide to seize the moment and seek a license to
rent out a room in his house and to sell food.

"You have to grab this chance. It's now or never," he said. "This is
Cuba, what will happen tomorrow, I don't know, but he who doesn't take
the risk neither wins nor loses."

(Additional reporting by Nelson Acosta and Rosa Tania Valdes; Editing by
Stacey Joyce)

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