North Korea

North Korea
The always bombastic and unpredictable North Koreans go hysterical again. This time the country is prepared to "go to war" with South Korea because that country is playing loudspeakers directed at North Korean territory. A headline from a UK paper reads, "More than 50 North Korea submarines 'leave their bases' as war talks with South continue "

Monday, September 13, 2010

Communist Cuba lays off 1 million workers

Cuba is just 90 miles south of Florida

In one of the very last governments in the world with an avowed communist ideology, where the state is all important, and built on the myth that it is one with the people, Cuba this week has had to begin laying off up to 1 million of its own workers.

That is a lot of folks for a country with only eleven million population in total, and 5.1 million officially making up the workforce - about 20% of all workers over the next six months let loose from their current jobs. Where will these people look for work, and why did Cuba's leader, Raul Castro, brother of famed Cuban leader Fidel Castro, believe this radical step was needed?

Fidel Castro, and younger brother Raul, left to right

As to the question why, Castro has long complained that Cubans expect too much from the government, which pays average monthly salaries of just $20 but also provides free education and health care and heavily subsidizes housing, transportation and basic food. Because unemployment is anathema in a communist society, state businesses have been forced to carry many people who do almost nothing. Castro said, "Our state cannot and should not continue supporting businesses, production entities and services with inflated payrolls, and losses that hurt our economy are ultimately counterproductive, creating bad habits and distorting worker conduct."

Genteel poverty with virtually no political freedom is the stark social reality

As to where people will look for alternate employment, the government would "increase private-sector job opportunities, including allowing more Cubans to become self-employed. They also will be able to form cooperatives run by employees rather than government administrators, and increasingly lease state land, businesses and infrastructure." Within a short time frame, the plan is for the state to only employ people in "indispensable" areas such as farming, construction, industry, law enforcement and education. Most economic observers believe the transition will be fraught with difficulties. There is little private sector business or employment to start with, so a critical mass of expertise in small business operations, finance, and aptitude is lacking. People have been conditioned to rely on government care and handouts, as meager as they are, in exchange for free services mentioned above.

Cuban music is much admired around the world

With many pitfalls ahead, Cuba is apparently going to try for a economic strategy loosely followed by China. Retain tight political control, but of an increasingly free market economy. Whether a small country of 11 million can replicate China with its 1.1 billion people remains to be seen. Profound change, in one way or another, seems ahead in the very near future for this little island country.