Wed. Apr 24th, 2019

Cuba prepares rules to encourage state firms and make private companies more flexible

Cuba prepares rules to encourage state firms and make private companies more flexible



Cuba will approve 22 new measures to improve the efficiency of its state companies, many of them deficient, and will announce shortly new legal norms to "flexibilize" the work on its own, at a time when the island is preparing to face a serious crisis economic

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The head of the Permanent Commission for the Implementation and Development of the Guidelines, Marino Murillo, explained this Saturday to the National Assembly the approval of 22 new measures that will be applied in the short and medium term to try to promote socialist state enterprises, reported official media.

Among them, he mentioned that the entities that operate in the Mariel Special Development Zone, Cuba's flagship project to attract foreign investment, will be able to retain part of the foreign currency received for their exports in order to secure their investments and future productions.

According to official data published last February by the Cuban official press, of the 1,776 state-owned companies that exist in the country, only 43 are loss-making.

However, the real picture is different, since these figures are obtained from a calculation distorted by the monetary duality of Cuba, where the national peso (CUP) and the convertible peso (CUC, equivalent to the dollar) are subject to several different rates of change, which for state companies is 1-1, although officially the rate of CUP to CUC is 25-1.

Despite the moderate economic opening driven by Raúl Castro during his tenure as president (2008-2018), the majority of the Cuban business fabric remains entirely state-owned, although in recent times the creation of joint ventures with foreign participation has increased.

The Government promotes a plan to improve the performance of state firms, burdened by inefficiency and demotivation of workers for low wages, and for this policies have been approved seeking to separate state functions from business and provide more autonomy to the companies.

On the other hand, Murillo did not specify this Saturday what will be the new regulations to "flexibilize" the private sector, which employs, according to the latest available data, 580,828 people, of which 29% are young, 34 % are women and 10% retirees who have joined the so-called "cuentapropismo".

Only said that this regulation is part of the "improvement" of this form of employment-driven by the Cuban Government to lighten the bulky templates of state workers, which extends to about 130 activities, of which the most flourishing are gastronomy, accommodation and services related to tourism.

Since last December the authorities have been announcing new measures for the sector, which got up in arms last year when the Government announced that it would limit to one the number of licenses that each "cuentapropista" could have, and that private restaurants would not could exceed the capacity of 50 places.

The discomfort caused by these decisions caused the Executive to back down at the last moment, to which was added in February the approval of five new activities and the possibility that legal entities can contract products and services of self-employed workers, among other news

Cuba is preparing to face its worst economic moment of the last decade, caused by the aggravation of the sanctions of the United States, the crisis in its ally Venezuela, the fall of exports and the meteorological disasters suffered in the last three years.

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