The Cuban government announced a process of decentralization as part of what President Raúl Castro termed Cuba’s “most complex” series of reforms, in the state-run Gaceta Oficial on Monday. The new reforms allow the more than 2,800 state-run enterprises—which represent 80 percent of Cuba’s economic activity—to open secondary businesses outside of the enterprises’ primary focus, retain 50 percent of their profits, sell excess goods at market prices, and set their employee’s salaries independent of the state.
While state-run enterprises will still be subject to government production quotas, Granma—Cuba’s official newspaper—reports that the reforms are part of a “gradual decentralization process” that transfers more responsibility to the companies’ directors. The new reforms come on the heels of Cuba’s much-anticipated Foreign Investment Law approved by the National Assembly on March 29.
These changes represent a series of economic reforms championed by President Castro since 2011, meant to stimulate the island’s stagnant economy and attract foreign investment. While the effects of the reforms have been modest—the economy grew by just 2.7 percent in 2013—the non-state sector has grown to 450,000 workers who now make roughly $100 a month, five times that of state employees.
