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Cuba 'updating' the state's role in the economy

The Cuban government plans to reduce its role in small businesses, but continue to direct a centralized economy, a Cuban official said Sunday.
/ Source: Reuters

The Cuban government, trying to create more productive employment, will allow more Cubans to work for themselves and hire their own workers, President Raul Castro said Sunday.

He said the steps were aimed at creating jobs for 1 million excess workers said to be burdening the Cuban economy and who are expected to be laid off over the next five years.

The measure eliminates "various existing prohibitions for the granting of new licenses and the commercialization of some production, giving flexibility to the hiring of labor," he said in a speech to the National Assembly.

He did not say how many people would get self-employment licenses, which currently exist but in small numbers in Cuba's state-run economy.

It was his latest tweak to Cuban communism, and could be the most important if it includes a large number of people.

He has previously taken steps to make agriculture more efficient and allowed barbers and taxis to operate more like small businesses.

Cuba has been in the grips of an economic crisis the past two years that has forced it to cut imports, freeze the Cuban bank accounts of foreign businesses on the island and hold off on paying its bills.

Castro has said up to a million workers are in unproductive jobs and will have to be redeployed.

Castro also spoke about U.S.-Cuba relations, saying "in essence, nothing has changed" since President Barack Obama took office.

"Although there's less rhetoric and there are occasional bilateral conversations about specific and limited topics, in reality, the embargo continues," he said, referring to the longstanding U.S. trade embargo against Cuba.

Castro also spoke about the planned release of 52 political prisoners in a deal last month with the Catholic Church, saying all of them had been subversives working for the United States.

"It must be remembered that none of these citizens were put in jail for their ideas," he said. So far, 20 of the 52 have been freed and sent to Spain.

His speech followed comments by Economic Minister Marino Murillo, who told reporters at the assembly that the Cuban government plans to reduce its role in small businesses, but continue to direct a centralized economy that eschews markets and private property.

Murillo said the communist-led island is "updating," not reforming its fragile economy and does not plan to copy the market socialism of China or Vietnam.

"We are of the opinion that today the state has a group of activities it must get out of. The state doesn't have to be in charge of everything," he said.

"The state has to be in charge of the economy, of the most important things," Murillo said.

"It's an updating of the economic model where the economic categories of socialism, not the market, will take priority," he said. "It lightens a group of things of the economic model, but we are not going to hand over property."

The government, which controls 90 percent of the economy, owns most things on the Caribbean island.

When asked by reporters about the possibility Chinese or Vietnamese-style changes, Murillo said, "I think the Cuban model is a very Cuban model. We cannot copy what many people in the world do."

"We can't forget that the most powerful country in the world is our enemy," he said, referring to the United States.

The United States and Cuba have had hostile relations since the 1959 Cuban revolution that put Fidel Castro in power and transformed the island into a communist state.

Fidel Castro, 83, is a member of the assembly, but did not attend Sunday's session. His chair, which is next to his brothers, has been empty since he fell ill in July 2006.