Cuba readies new phase in retail sector reform
- Submitted by: manso
- Business and Economy
- 07 / 31 / 2011
By Marc Frank | Reuters. HAVANA (Reuters) - Cuba will broaden private retail service beyond beauty parlors and barbers in October to include everything from coffee shops to locksmiths, and may even rent space on busy streets, an official told parliament.
The measures, which take effect in October, are yet another step in President Raul Castro's plan to get the state out of administering thousands of small businesses by turning them over to employees to compete with a growing private sector.
A Communist Party daily Granma report on Saturday cited the testimony of Internal Trade Minister Mary Blanca Ortega before parliament's Economic Affairs Committee.
"The leasing of barbershops and beauty parlors will be generalized across the country and this system will be broadened to all other services (on an experimental basis) beginning in October," the newspaper reported.
Soon after Fidel Castro's 1959 revolution all businesses down to shoe shining were taken over by the state, but since the former leader handed power to his brother, the policy has been openly criticized as a mistake.
Cubans have long complained of dismal state services, from cafeterias and domestic appliance repair to the building trades and fixing personal items, where they say theft of resources and poor quality are the rule.
The government, which has monopolized economic activity for decades, turned over some 1,500 state barbershops and beauty parlors to employees last year.
The former state employees, who used to make less than $20 per month and charge clients a state-set price, now pay a monthly fee for the shop, purchase most of the supplies, pay taxes and charge what the market will bear.
The new services will include coffee and snack shops, small cafeterias, appliance repair, locksmiths and watch and shoe repair, according to government insiders.
Granma also quoted Deputy Labor Minister Jose Barreiro as saying the government was identifying underutilized commercial space on main avenues for possible use by entrepreneurs.
"Yup, they told us we will lease in the future and that's fine with me since I have to buy my own supplies already as they give us nothing," said Antonio, who makes keys in a dark and dingy state shop on O'Reilly Street in Havana.
A man who repaired and made shoes down the block under similar conditions, and asked to remain anonymous, said he wasn't happy with the plan as he did receive some materials and they would be hard to come by on the street.
"I sell most of what I make on the side so it will be more expensive," he said.
The government late last year dramatically loosened regulations on individuals working for themselves and opening businesses in retail services where they compete with the state.
Deputy Labor Minister Jose Barreiro said more than 325,000 worked in the "self employed" sector as of July, compared with 150,000 in 2009, offering food services, merchandise repair, transportation and other services.
Cuba's newly leased outlets will face off against private entrepreneurs and those who fail, on either side, will fold.
(Editing by Doina Chiacu)