Over 2,000 Cuban firms shifted to private sector

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IANS/EFE | 01 May, 2013
The Cuban government has leased more than 2,000 small businesses to their old employees, who have increased the firms' income and the quality of the services provided.

This new form of non-state management, included in the economic reform plan of President Raul Castro, was begun on an experimental basis in 2009 in barber shops and hair styling salons, but it was later expanded to 47 economic activities.

To date, 2,041 businesses have been leased to a total of 5,479 employees, according to figures compiled by the Domestic Commerce Ministry.

The former employees are in charge of organizing the business, providing the necessary resources, maintaining or improving the store and they assume all the rent, electricity, telephone, gas and water payments.

They also set the prices of the services they provide.

The Cuban government acknowledges that this method has improved service, has increased salaries and the new business operators feel more motivated to the point where absenteeism has been reduced, although it is still prevalent in the state-run sector given the meager salaries and the lack of incentives there.

The workers also feel they are benefiting, like the employees of the Leo hair salon in Havana's El Vedado neighbourhood, which for the past 16 months has been operating under new management.

"The pay has improved a lot. Before, the minimum wage was 255 pesos a month (about $9) and now that things have changed, the improvement is substantial," Milagros, 35, one of the five hair stylists at the shop, told EFE.

Not everything is favourable, however. Besides the burden of taxes, the recurring complaint in Cuba's emerging private sector is the absence of a wholesale market where business operators can buy supplies.