Cuban co-operatives a sign of economic change

One hundred state-run produce markets and 26 other establishments were scheduled to become private co-operatives today as communist-run Cuba continues to shed secondary economic activity in favour of individual initiative and markets.

The co-operatives will be the first outside of agriculture since all businesses were nationalised in 1968.

The government says many more establishments will follow, beginning in 2014, as an alternative to small and medium-sized state businesses in retail and food services, transportation, light manufacturing, and construction, among other sectors.

The produce markets were supplied exclusively by the state, which also set prices and wages.

As co-operatives they will now purchase produce from any source and set their own prices, with the exception of a few state-supplied staples, for example rice, chick peas, and potatoes in Havana.

At one of the dozens of Havana markets set to become co-operatives this week, the mood was festive on Saturday as workers painted the dark and dingy premises, fixed broken bins, and in general spruced the place up on their last day as state employees.

“We were given the choice of working as a co-operative member or being laid off,” said Antonio Rivera, a worker-turned-member.

“I think we will be better off, so I joined.

Yesterday the 100 markets took inventory and made other preparations, before their adventure into the country’s growing “non-state” sector began.

President Raúl Castro, who took over from his brother Fidel in 2008, has already taken steps to deregulate small private businesses in the retail sector, lease small state shops and taxis to individual employees and fallow state lands to would-be small farmers in search of improved production and efficiency.

According to the government, more than 430,000 people now work in the non-state sector, which consists of private entrepreneurs, their employees, and individuals who own or lease taxis and the like.

The figure does not include 2,000 agricultural co-operatives and 400,000 small farmers.

The new co-operative markets average 15 or fewer members and will lease their premises from the state.

They will function independently of state entities and businesses, set prices in cases where they are not fixed by the state, operate on a democratic basis, divide profit as they see fit and receive better tax treatment than individually owned businesses, according to a decree law published in December.

The law allows for an unlimited number of members and use of contracted employees on a three-month basis.

The Communist Party adopted a sweeping five-year plan to update the economy in 2011.