New way

Cuba is on the brink of momentous change. An announcement by the Cuban Workers Federation that around 5,00,000 state employees would be laid off by 2011 has sparked off debate over whether the end of communism in Cuba is near. The economic crisis has become critical. That the government seems to have run out of solutions under the existing system is evident from a recent admission by former president Fidel Castro that the Cuban model of communism is not working. The change is not unexpected. It was widely believed that state control over the economy would loosen with Castro’s departure from the political scene. Brother Raul, who took over as president in 2006, was seen to be less committed to communism. Cuba’s economy has been struggling for many years especially with the collapse of the Soviet Union, its main benefactor. The economy has been under severe pressure for decades thanks to crushing sanctions imposed by the US. Signs that change was imminent became evident in August this year, when the president announced that the state’s role would be reduced in some areas, with workers allowed to be self-employed or to set up small businesses.

While the mass lay-offs and other changes in the pipeline signal the end of centrally planned socialism in Cuba, it is still too early to proclaim the entry of free market capitalism in the country. The government has loosened its tight grip over the economy. But it will continue to regulate it. How the Cuban government is going about the lay-off provides interesting insights into the ‘new way’. Unlike in other countries where workers are fired overnight and left to fend for themselves, in Cuba the lay-off is coming after much consultation with workers’ unions. Programmes will be in place to reduce the impact of the change. Besides, the lay-off does not mean that 5,00,000 workers will be unemployed. Small state enterprises are being converted into private cooperatives run by employees. Some 2,00,000 will be employed there. Another 2,50,000 will be allowed ‘self-employment’. This means that in the ‘new Cuba’ people will continue to do what they were always doing, only many will not be on the state’s payroll any longer.

And yet, the change will bring much uncertainty to Cubans. They are used to having the state as economic protector. That protection is now going. There is no assurance of incomes and jobs any longer. They will need support through this difficult transition.