Cuba looks at cutting welfare benefits

Cuba looks at cutting welfare benefits
By Richard Lapper

Published: August 19 2008 03:00 | Last updated: August 19 2008 03:00

Cuba, one of the world's last surviving communist states, is -look-ing
at watering down the generous social welfare system that has been a
cornerstone of its economy for nearly 50 years, according to a senior
government official.

Alfredo Jam, head of macro-economic analysis in the economy ministry,
told the Financial Times that Cubans had been "overprotected" by a
system that subsidised food costs and limited the amount people could
earn, prompting labour shortages in important industries.

"We can't give people so much security with their income that it affects
their willingness to work," Mr Jam said. "We can have equality in access
to education and health but not in equality of income."

He said the emphasis on equality had helped maintain social cohesion
during the 1990s when Cuba's economy came close to collapse after the
withdrawal of Soviet assistance. But "when the economy recovers you
realise that there is [a level of] protection that has to change. We
can't have a situation where it is not work that gives access to goods",
he said.

Mr Jam's remarks represent a rare and unusually frank insight into
official thinking on Cuba's future economic direction in the wake of the
resignation of its long-time leader, Fidel Castro, in February.

Under Cuba's new president, Raúl Castro, the former leader's younger
brother, the country has eased restrictions on bonuses that can be paid
to workers and lifted bans on products such as mobile phones and DVD
players.

Mr Castro also decentralised the country's agricultural system and said
idle land would be offered to co-operatives and private farmers to lower
dependency on imported food.

However, the welfare system has remained almost intact. Under it, all
Cubans are entitled to basic foods, including bread, eggs, rice, beans
and milk, at much cheaper prices than those elsewhere in the world.
Rents and utilities are extremely cheap and education and healthcare are
free.

Any reform of these universal benefits would be controversial within the
governing Communist party.

Revolution to repair, Page 7 www.ft.com/cuba www.ft.com/raul

http://www.ft.com/cms/s/0/0cbf14ee-6d85-11dd-857b-0000779fd18c.html