Tuesday, October 21, 2008

Cuban foreign minister: Salary reform advancing


Cuban foreign minister: Salary reform advancing
By E. EDUARDO CASTILLO, Associated Press Writer E. Eduardo Castillo, Associated Press Writer Tue Oct 21, 7:11 pm ET

MEXICO CITY – Cuba is making progress in a salary reform that will ensure waiters don't make more than doctors, but the changes must be handled carefully to avoid economic turmoil, the island's foreign minister said Tuesday.

Appearing before business leaders in Mexico City, Felipe Perez Roque said reforms within the communist system will help guarantee that people earn a salary more commensurate with their career.

"We are in a salary reform that allows people to earn for what they do and resolves the contradiction in Cuba ... in which the bellboy of a hotel or the employee of a restaurant, with tips, earns more than a surgeon," he said.

But he cautioned that the change "has to be done in phases."

"If they just start throwing money in the streets without support, there will be inflation and it will damage our currency," he said.

Under the island's communist economic system, nearly all Cubans work for the government and earn an average monthly wage of 408 Cuban pesos, or just under US$20. That is supplemented by food and other subsidies.

People working in the tourist industry often receive tips that can far surpass state wages and give them greater access to luxury goods at hard-currency stores.

President Raul Castro and other Cuban officials have talked of the need for salary reforms and the government announced in June it would start paying workers on the basis of individual rather than group production so that workers who don't do their share or are frequently absent don't earn the same as those who show up regularly and do a good job.

The government in April raised salaries of court workers and increased monthly pensions for all workers. But the salary increases could not be extended to other sectors immediately because of insufficient resources.

Perez Roque also said that Cuba is working toward having a single currency.

Cuba has had two primary currencies since the collapse of the Soviet Union wrecked its economy and spurred its turn to tourism. Tourist businesses took U.S. dollars and charged U.S. prices, while the peso was maintained for everyday transactions.

A convertible peso, largely linked to the dollar, is now used for tourism and at stores offering goods that are often unavailable in local pesos.

Officials have repeatedly said they hope to bring the two systems together, but say that cannot be done until productivity increases.

Perez Roque also said that relations with the European Union have improved after the EU moved last year to lift sanctions imposed on Cuba for its jailing of 75 dissidents in 2003.

"There has been a process of reconstruction of Cuba's relations with the European Union," Perez Roque said. "In general, Cuba's relations with the EU are advancing and improving."

Also Tuesday, Perez Roque met with President Felipe Calderon and invited the Mexican leader to visit Cuba. No date was set for a visit.

Both Perez Roque and Calderon celebrated closer relations. Ties between the countries soured under the 2000-2006 presidency of Vicente Fox, when Mexico voted at the U.N. in favor of monitoring human rights in Cuba. Relations reached a low in 2004, when both countries called home their ambassadors.

Mexico signed an agreement with Cuba on Monday to deport Cubans caught moving through Mexico illegally to reach the U.S.

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