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Is Cuban government turning beauty salons over to employees a start of trend?

The Cuban government is getting out of the beauty business. The communist country that acknowledges it has an extra million people on the government payroll has come up with a solution to battle fraud and cut costs: Turn salons over to employees to operate.

Experts say the move is a "capitalism light" step toward the kind of economic measures that Cuba hopes will help alleviate its heavy economic burden amid a financial crisis. But the industry affected is so small that experts say it's too little, far too late.

Although Cuba allows self-employment in some sectors, this measure is the first time employees were offered the chance to operate state-run, retail establishments since they were nationalized in 1968. This government move could lead to others, such as allowing employees to run the restaurants where they work.

The decision, which was not announced by the Cuban state-run media, was first reported by the British news agency Reuters.

Barbers and hairdressers told the agency that they would now rent the space where they work and pay taxes instead of receiving a monthly salary. The people who aren't interested are being transferred to other positions or offered retirement.

The action by the government follows a series of changes to the state economy aimed at reducing government costs, cutting graft and increasing productivity.

Cuban leader Raul Castro doled out state land to farmers in a quest to get them to increase production, and taxi drivers are allowed to run their business independently.

But the Cuban government still controls more than 90 percent of the economy, which economists say has been in a free fall since hurricanes wiped out much of its infrastructure in 2008 and a global drop in the price of nickel, one of the country's largest exports.

Is Cuban government turning beauty salons over to employees a start of trend? 04/13/10 [Last modified: Wednesday, April 14, 2010 12:05am]
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