Layoffs in Cuba

Monday, September 20, 2010

RAÚL AND FIDEL Castro find themselves in a jam. The gerontocratic rulers of Cuba are facing the worst economic crisis in decades: Food production is falling, the last sugar harvest was the worst in a century and only billions in subsidies from Venezuela's erratic Hugo Chávez are keeping the country afloat. Yet 79-year-old Raúl and 84-year-old Fidel are determined to preserve as much as possible of the country's failed socialist system -- and they have no intention of allowing greater political freedom.

So the brothers are launching a series of economic half measures and political feints in the hope of patching their regime without having to change it. The latest came last week with the announcement that 500,000 Cuban workers -- or 10 percent of the state labor force -- would be laid off from their jobs. Some will be shifted directly to the private sector by turning small state enterprises into private cooperatives, while the rest will be expected to find work in an expanded "self-employment" sphere, where Cubans are licensed to work in such vocations as toy repairman and piñata producer.

Some Cuba watchers have proclaimed this the biggest economic upheaval since the 1960s and predicted that Cuba will soon resemble China and Vietnam, capitalist countries governed by communist dictatorships. In reality, the Castros appear to intend something closer to the emergency reforms that were introduced in the early 1990s, after the collapse of the Soviet Union. Private employment was also allowed to expand then but was tightly controlled. In this instance, too, the regime expects to blanket the new private sector with regulations and taxes and has no plans to provide capital, access to materials, or foreign investment.

Predictably, apologists for the Castros and for U.S. corporate agriculture greeted the half step with renewed calls for the lifting of what remains of the embargo on trade with Cuba, or at least the end of all restrictions on travel. This, too, is part of the Castros' strategy. The regime has begun slowly releasing political prisoners into exile -- another limited concession that it has made before -- in the expectation that the Obama administration will respond and that a wave of American tourists will arrive with desperately needed dollars. In fact, the administration reportedly is planning a liberalization of travel restrictions, though not a lifting of the tourism ban.

Such an adjustment, which would return U.S. policy to where it was during the Clinton administration, may be the best response to the Castros' half measures. Fundamental changes of U.S. policy toward Cuba should await fundamental reforms by the regime. When average Cubans are allowed the right to free speech and free assembly, along with that to cut hair and trim palm trees, it will be time for American tourists and business executives to return to the island.

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