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Cash-strapped Cuba moves ahead with job cuts

 

Jeff Franks, REUTERS

 

HAVANA (Reuters) - Cuba began the process of laying off thousands of workers on Tuesday, according to a top union official, as one of President Raul Castro's central reforms to the communist island's economy picked up steam.

 

It was not clear if dismissal of the state employees had begun immediately or if several ministries were starting to decide who should go. The government has said it plans to cut 500,000 workers from its bloated payrolls by March.

 

"It is up to us to be the guarantors of the labor restructuring, which will begin (on Tuesday)," said the head of the Cuban Workers Federation, Salvador Valdes Mesa, according to state-run Radio Rebelde.

 

He said the union would oversee the layoffs, initially targeting workers at the Sugar, Agriculture, Construction, Public Health and Tourism ministries, to assure they are conducted without "violations, paternalism, favoritism and any other negative tendency."

 

The job cuts are part of Castro's overhaul of Cuban communism aimed at ending the Caribbean island's chronic economic problems.

 

Cuba, hit hard by 2008 hurricanes and the global financial crisis, is short of cash and has had to slash imports, freeze local bank accounts of foreign businesses and default on payments to creditors in the past two years.

 

Castro wants to reduce the state's role while maintaining control of an economy that will have a bigger private sector and less state spending.

 

In most cases, laid off workers will be offered other jobs, which they can accept or turn down.

 

Plans call for about 200,000 of the laid-off workers to shift to employee-run cooperatives converted from businesses currently operated by the state.

 

MORE CUTS TO COME

 

The government also has begun issuing 250,000 new licenses for self-employment. For the first time, the self-employed will be allowed to hire workers.

 

Cubans receive social benefits such as free healthcare and education, but earn on average the equivalent of about $20 a month.

 

A second round of cuts will be conducted later, with at least 500,000 more workers slated to be removed from state payrolls over the next few years.

 

The union must "convince (workers) of the need for these measures for the country's economy, with the security that ultimately no one will be left unprotected," Valdes said.

 

Officials have said the government began cutting jobs as early as October, shortly after Castro announced his reform package.

 

It was rumored, but not confirmed, that layoffs were postponed for a time while the self-employment licensing program was being set up because the government was wary of creating too much social dislocation.

 

Workers at the Agriculture and Sugar ministries said on Tuesday they had been told meetings about the layoffs would begin this week.

 

The government has said ministry and labor functionaries will determine which workers are worth keeping, based on their productivity.

 

"We know that if there's no productivity, there's never going to be a raise in salaries. So it's a necessary measure that has to be understood," said Mayda Vega, an office manager in the Agriculture Ministry.

 

"I imagine it will be a gradual process and not traumatic," she said.