Cuba to expand use of employee-run cooperatives

HAVANA (Reuters) – Cuba will soon turn some small-scale manufacturing and retail services into cooperatives as the state retreats from minor businesses in an effort to boost the island’s troubled economy, government and Communist Party sources said.

The moves are the latest reforms by President Raul Castro, who wants to reduce bureaucracy and raise productivity by easing the government’s role without sacrificing the socialist system installed after Cuba’s 1959 revolution.

“Cooperatives are not something on the horizon, they are something already approved by the Havana Provincial Assembly in hopes of recovering local production and improving morale and competitiveness,” said one government insider who, like others, asked that his name not be used.

“There are already local workshops that have received approval to move to a cooperative form of production and administration,” he said, listing furniture-making and garment workshops as good candidates.

The plan includes bringing illegal private businesses already operating in Havana out of the shadows and taxing them. Cuba nationalised all retail business and small manufacturing in 1968, all the way down to shoeshine shops.

Earlier this year, Castro leased back small barber shops and beauty salons to individual employees and is doing the same with taxis. Farm cooperatives have existed in Cuba since the late 1970s.

Castro also has said the government must cut bloated state payrolls by around 1 million workers over the next five years.
Seeking to create jobs, he announced last month that more family-based private business would be allowed and, for the first time, private contracting of labour.

Castro has brought local and provincial governments into the task of economic development.