Raul Castro completes the octogenarian club to rejuvenate Cuban leadership

Cuban President Raul Castro turned 80 on Friday, vowing to rejuvenate the country's aging leadership and its sagging economy.
 
No official events took place as he joins Cuba's club of octogenarians, which already boasts his brother Fidel Castro, 84, and his second in charge, Jose Ramon Machado Ventura, who is 80.

At a recent summit of the Communist Party, Castro said one of his last duties as head of government would be to pave the way for successors.

“Today we face the consequences of not having a reserve of adequately prepared substitutes, with the experience and maturity to assume the new and complex work of leading the party, the state and the government,” he said.

But on Thursday when seeing off former Brazilian president Lula da Silva, Raúl insisted it was a shame he could not retire because he was less than half way through the first of two possible five-year terms, thus hinting he would stand again for the presidency in 2013.

If he were to retire his presumed successors are of the same generation -- vice-president Jose Ramon Machado is also 80, and close confidant Ramiro Valdes is 79.

However in a radical break from the past, Castro has paved the way for more private enterprise, encouraging Cubans to open small businesses and pay taxes on their endeavors.

Cubans have bought more than 200,000 licenses allowing them to go into business for themselves since last October. At the same time, Castro announced massive layoffs in the state sector that will eventually mean the elimination of more than 1 million jobs.

Reform has reached agriculture where families are allowed to farm their plots and sell directly to consumers at market prices. Cuba with ample farmland to feed its population is desperate to cut its imported food bill, mostly from the US and Brazil and which is two billion US dollars per annum.

In that line of action the scheme of free lunches for almost everybody has been gradually abolished and will be limited to the really needy.

Even when there were no plans to mark Raul 80th birthday on Friday, officials anticipated that a grand celebrations is programmed for his elder brother Fidel's 85th in August. Former president Lula da Silva was in Cuba where he met with both Castro brothers, Raul and Fidel, to visit the construction of the Mariel port, 43 kilometres west of Havana. The port restructuring was subsided with a US$ 300 million credit line awarded during Lula da Silva’s term. Lula reported to be “happy” with his trip and his meeting with the Castros.

Source: MercoPress

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Cuba To Promote Foreign Investment

Cuba in future will be a country that promotes foreign investment, expands the private sector and dutifully pays off its debts, according to a proposal revealed on Monday by the ruling Communist party.

But it will not renounce the socialist system installed half a century ago after Fidel Castro took power in a 1959 revolution, according to the 32-page document that will guide debates at a Communist party congress in April.

"The economic policy in the new phase will correspond with the principle that only socialism is capable of overcoming difficulties and preserving the gains of the revolution, and that in the updating of the economic model, planning will be paramount, not the market." - it said.

The document, entitled "Guidelines of Economic and Social Policy," is the program of reforms President Raul Castro will place before the party congress for its consideration.

They could be modified during extensive public discussions ahead of the congress, which was announced by the president on Monday night and will be the first since 1997.

The congress is where Cuba's only legal political party sets direction for the country, supposedly for the next five years, although it will have been 14 years since the last meeting.

The April gathering will be particularly important because, given the age of current leadership, it will be the last for the generation that fought the revolution and has held power since then, hewing hard to communist ideology.

President Castro, 79, took office in 2008 after older brother Fidel Castro, 84, ruled the island for 49 years and finally resigned due to ill health.

He promised to improve the daily lives of Cubans and has focussed on economic improvement, including major reforms announced in September to cut a million government jobs and expand the private sector by granting 250,000 new licenses for self-employment.

ONLY THE ECONOMY
He said Cuba's economy will be the only topic at the congress.

The guidelines include reforms already begun by Raul Castro -- among them the reduction of the state's role in the society and the decentralization of agricultural management.

They include a proposal to eliminate the monthly food ration Cubans receive, symbol of decades of state paternalism and a particular target of Raul Castro, who says handouts have discouraged productivity.

They also call for provisions for bank credits for the new self-employed and wholesale stores to cut their costs, but also for them to pay taxes to finance public spending.

In contrast to past policy, state-owned businesses that do not make money will be completely liquidated.

And the authorities will look to improve the country's international credibility "through the strict fulfilment of contract commitments."

Cuba's standing with the international business community has been damaged the past two years as a cash crunch forced the freezing of Cuban bank accounts held by foreign businesses and of payments to many of them.

The party also proposes "to continue encouraging the participation of foreign capital in Cuba, complementing national investment in those activities of interest to the country."


The document mentions, for example, the development of golf courses, marinas and luxury condominiums to attract wealthier visitors to the Caribbean island.

Raul Castro said that before being distributed, a copy of the guidelines was submitted to Fidel Castro for his consideration. Even though he is no longer president, he is still head of the Communist party.

By Esteban Israel

From: SwissInfo

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Cuba unveils new tax code for small business

Will Cubans start to work for real?

Cuba unveiled on Friday a new tax code it said was friendlier for small business, signaling authorities are serious about building a larger private sector within the state-dominated economy.

The new system, outlined in the Communist Party daily Granma, greatly increases tax deductions, but also adds taxes and comes with a warning of stiffer enforcement of tax collection.

It replaces a rudimentary tax code in place since 1994 when some self-employment was first authorized but then squeezed by severe regulation.

The tax redesign comes as the government has begun slashing 500,000 workers from state payrolls and preparing to issue 250,000 self-employment licenses to create new jobs in President Raul Castro's biggest reform since taking office in 2008.

He promised economic change when he replaced ailing older brother Fidel Castro and is pushing to boost productivity to help the Caribbean island's troubled economy.

There were just 143,000 self-employed in 2009, according to official figures.

The new tax system enables the self-employed to deduct up to 40 percent from income for the cost of supplies, compared to just 10 percent under the old one.

Formerly, small businesses simply paid a graduated income tax. Now they will also have to pay a 10 percent sales tax and 25 percent social security tax, but both are deductible at the end of the year.

Castro's reform permits the self-employed, for the first time, to hire workers. They will have to pay a 25 percent social security tax for each employee, which will also be deductible, and an undefined labor tax.

ENFORCING SOCIALIST PHILOSOPHY
The Granma story made clear that despite the development of a larger private sector, the government's socialist philosophy remains in place and the labor tax is a way of enforcing it.

"This tax is regulatory in character to avoid concentrations of wealth and indiscriminate use of labor," Granma said.

"The more labor hired the more severe the tax," it said, without providing details.

The Granma story warned that those who are illegally self-employed must obtain a license and said tax scofflaws would face legal action.

"Those who continue working on their own without papers, or do not pay the required taxes, will feel the weight of the law imposed upon them by those mandated to enforce it, the National Tax Office," it said.

Cuba expert Phil Peters at the Lexington Institute in Arlington, Virginia said the new code is an attempt to simplify taxes for small businesses and make sure those taxes are paid.

"My bet is that the sector will grow substantially, but only time will tell how big a tax burden this will be and how many entrepreneurs will be able to live with it," he told Reuters.

The government, which took power in put in a 1959 revolution headed by Fidel Castro, controls about 90 percent of the Cuban economy.

Most small businesses remained in private hands until 1968 when they were all nationalized, down to the shoe shine shops.

The reforms, announced last month, turn back the clock to some degree on the sweeping nationalization.

Along with being able to hire employees, the self-employed will for the first time be able to do business with the state, open bank accounts, receive credits and rent space.

The goal of these changes, Granma said in a story last month, was to "distance ourselves from those conceptions that condemned self-employment almost to extinction and stigmatized those who decided to join it, legally, in the 1990's."

At present, more than 85 percent of the Cuban labor force, or over 5 million people, works for the state, many in unproductive jobs. The government has said it ultimately plans to cut a total of one million state workers, or 20 percent, from state payrolls.

Along with private sector development, many state-owned retail operations will be converted to employee-run cooperatives and leasing arrangements the government said.

From: Tcob1

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Reform On The Range: Cubans Heed The Call To Farm

Now some Cubans can work for themselves, not only for Papa Castro

Cuba has miles and miles of fertile, lush countryside where nothing is growing or grazing. After five decades of state-controlled agriculture, the country struggles to feed itself, forcing the government to import some 70 percent of the island's food.

Cuban President Raul Castro wants to change that and is asking enterprising Cubans to go back to the land.

Aniley Pena was watching TV two years ago when she heard the offer. The government was giving out free 10-year leases on state-owned land to anyone willing to take a crack at farming.

Today, she has 12 acres on the outskirts of Bejucal, a small town 20 miles south of Havana.

Pena is 38, rugged enough to trudge around in rubber boots, but not too earthy to wear mascara in the fields. She shields herself from the withering sun with a parasol and a Nike cap, supervising a team of men as they mix organic fertilizer into beds of radishes, carrots, scallions and spinach.

Pena's tractor is a little red Ford from the Truman era she inherited from her late grandfather. She has called her farm "Las Estrellas" — The Stars. Stars are bright, and they bring clarity, she said, which is what this new vocation has given her.

"Being out here relaxes me," Pena says. "Plus I know I'm doing something good for society, and also for myself."

Independence, Sense Of Security

Pena is the new face of Cuban socialism, a private entrepreneur with a sense of social responsibility. She was trained as a veterinarian, but like many in Cuba who aren't inspired by $20-a-month government salaries, she dropped out of the workforce.

Now, she's working seven days a week and studying pest control methods at night. As part of her deal with the government, she will give one-third of her produce to the state and sell the rest for a profit.

"Having this land, you realize how productive it can be," Pena says. "When you're growing your own food, you have independence, and that gives you a sense of security."

The Castro government has approved more than 100,000 applications for state land, but so far that hasn't led to an increase in food production.

As usual, bureaucratic absurdities are to blame. Farmers can't buy tractors or trucks without government permission. Irrigation equipment and tools have to be assigned by the state.

Police checkpoints surround Havana to make sure no one is illegally sneaking produce into the city for sale on the black market.

The government's new solution is fruit and vegetable stands where farmers can sell directly to customers. They are popping up all over the island, as some Cubans are even getting back land that belonged to their families before it was nationalized in the early 1960s.

Oscar Espinosa Chepe is a dissident economist in Havana.

"The reforms are a step forward, but they're not going to fix the problem," he says. "Cuba needs more radical changes, but the government is too scared to give up control."

Feed Mother Cuba, Save Mother Earth

There's an old joke in Cuba that if education, health care and athletics are the Cuban revolution's greatest achievements, then its three biggest failings are breakfast, lunch and dinner. Government supermarkets — where many Cubans can't even afford to shop — stock imported mango juice from Mexico, chicken from Brazil and butter from Denmark. All could be easily produced locally.

Lorenzo Ramos is another farmer taking advantage of the government deal. On a recent day, he is making fertilizer from decomposing sugar cane stalks.

His five-acre plot was choked with garbage and thorny weeds when he got it a year ago. But with his machete and his rusting Soviet tractor, he and his wife have turned a wasteland into a tidy orchard of fruit tree saplings.

Some fruit varieties have grown so scarce in Cuba that Raul Castro complained about their disappearance in a speech last year.

Ramos has responded by planting rows of mangos, guavas, peaches, lemons and prized delicacies like the guanabana, or custard apple.

"Having a farm means coping with everything — ants, thunderstorms, scratches, hurricanes, waking up at dawn," Ramos says. "It's sacrifice and hard work, but somebody has to do it. We can't all be intellectuals, because then there'd be nothing to eat."

Ramos has put up a sign along the highway next to his farm, inspired by something Bolivian President Evo Morales said on TV. "Save Mother Earth," the sign reads, and Ramos is hoping to put his fruit stand right next to it.

by Nick Miroff
From: NPR

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Cuba fires minister in charge of oil and nickel

Is this the first layoff of the 500.000?

Now ex-minister Yadira Garcia with ex-president Castro

Cuba fired Basic Industry Minister Yadira Garcia, in charge of the oil and nickel industries, on Sunday and said the first vice minister would stand in until a replacement was named.

A government communique said Garcia was let go due to "her deficiencies manifested, especially in poor control of resources destined for investment and the productive process."

First Vice Minister Thomas Benitez was named as a temporary replacement "until a new minister can be appointed," the statement said.

The ministry is also in charge of the cement industry and domestic pharmaceutical industry.

The Cuban oil industry is preparing to drill with foreign partners in the Gulf of Mexico next year and in partnership with Venezuela is developing its refining and other oil related infrastructure.

Unrefined nickel is Cuba's most important export at around 70,000 tonnes per year and a joint venture with Venezuela plans to add 60,000 tonnes of ferronickel by 2013.

Garcia was the last economic minister inherited by President Raul Castro in 2008 when he replaced ailing brother Fidel Castro.

Raul Castro replaced the other ministers in 2009.

From: Reuters Africa

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Cuba To Cut 500,000 Government Workers

Castro cutting jobs, but now Cubans allowed to cut hair

Cuba's communist government will lay off hundreds of thousands of workers and reduce restrictions on private enterprises to help them find work.

The Cuban Workers Federation -- the country's only trade union -- said some 500,000 jobs will be cut by early next year.

More than 85 percent of Cuba's workforce, or about 5 million people, are currently state-employed.

The plan is the most important reform undertaken since President Raul Castro took over from his brother Fidel in 2008.

The labor overhaul comes less than a week after Fidel Castro was quoted as saying Cuba's communist economy no longer works.

From: Radio Liberty

Video: 500,000 Cubans Booted Off Government Payroll

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