From today's FT:
Cuba ... is looking at watering down the generous social welfare system that has been a cornerstone of its economy for nearly 50 years, according to a senior government official.
Alfredo Jam, head of macro-economic analysis in the economy ministry, told the Financial Times that Cubans had been "overprotected" by a system that subsidised food costs and limited the amount people could earn, prompting labour shortages in important industries. "We can't give people so much security with their income that it affects their willingness to work," Mr Jam said. "We can have equality in access to education and health but not in equality of income." ...
Under Cuba's new president, Raúl Castro, the former leader's younger brother, the country has eased restrictions on bonuses that can be paid to workers and lifted bans on products such as mobile phones and DVD players. Mr Castro also decentralised the country's agricultural system and said idle land would be offered to co-operatives and private farmers to lower dependency on imported food.
Tuesday, 19 August 2008
Outbreak of commonsense in Cuba
My latest blogpost: Outbreak of commonsense in CubaTweet this! Posted by Mark Wadsworth at 13:04
Labels: Commonsense, Cuba, Vouchers, Welfare reform
Subscribe to:
Post Comments (Atom)
1 comments:
The changes made thus far are cosmetic. Removing salary caps theoretically will improve production among Cuba's work force. In reality unless more of the Cuban economy is privatized (currently 90% is under state control) this modification will not have the desired effect. Think about it. You are an employee at a state-owned venture and you work your butt off and they give the bonus to the slacker working next to you because the boss is his buddy. What are you going to do? You can't leave and find another employer that will pay you what you are worth because there is no free market for labor.
This will breed favoritism and further accentuate the inefficiencies of the Cuban economy. The solution for all of this is a massive privatization of large of swaths of the Cuban economy. The only thing holding Raul back from doing that is that his dictatorship would almost certainly be a casualty of the newfound economic freedom that many Cubans would have.
Post a Comment