The Moment

9|13|10: Cuba

By Tim Padgett Monday, Sept. 27, 2010

    • Cuba's ailing 84-year-old ex-President, Fidel Castro, says he was misinterpreted when he mused to the Atlantic this month that the island's communist economic model "doesn't even work for us anymore." (He insists he meant "exactly the opposite.") Still, Fidel seemed to foreshadow the stunning decision by his younger brother, President Raúl Castro, to lay off half a million state workers by next spring. Via a statement from the nation's official labor union, Raúl didn't sugarcoat the pink slips: the government, which employs 90% of Cuba's more than 5 million workers, can no longer sustain "inflated payrolls" that "generate bad [worker] habits" and smother an already wheezing economy. To help Cuba escape its hard tropical straits, the government will have to turn to what the 1959 revolution once demonized: private enterprise. Cuba has allowed, but tightly limited, some "self-employment," like restaurants and barber shops run out of homes, since the 1990s. But to help the country absorb 500,000 newly unemployed, Raúl will have to significantly expand those opportunities while attempting to keep Cuban socialism "irrevocable." Should he fail, there may be 500,001 out of work.