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The Associated Press November 26, 2010, 2:49PM ET

Cuba to import raw materials for small businesses

Cuba's government will spend about $130 million next year to import raw materials and equipment for independent businesses following its decision to allow some kinds of self-employment, officials said Friday.

In a bid to increase the efficiency of its cash-strapped economy, the communist government announced that it would lay off a half-million state workers and in October authorized 178 kinds of self-employment ranging from translator and teacher to shoe or watch repair.

Most of the newly permitted forms of self-employment require tools, equipment and infrastructure, Maria Victoria Coombs, director of employment at the Ministry of Labor and Social Security, told Communist Party newspaper Granma.

"The country will ensure, to the extent that it is possible, the supply of raw materials and supplies needed for self-employment," Granma reported Friday.

The granting of licenses in nine of the permitted forms of self-employment had been suspended because of the impossibility of legally obtaining the needed equipment and fears that those carrying out the jobs were using material stolen from state centers.

Enrique Ramos, commerce director of the Ministry of the Economy and Planning, said the state will supply independent businesses with the raw materials through established retail networks, since economic conditions don't allow it to create in the near future a wholesale market with special prices for the self-employed.

Cubans often complain that state-run retail stores have elevated prices. A wholesale market could give small businesses access to goods at lower prices.

Ramos said "for 2011 it is projected that imported goods and materials worth $130 million, of which food represents $36 million, will be incorporated into the existing supply."

Earlier this year, President Raul Castro began announcing measures to reform the island's socialist economic model to allow some forms of private enterprise without giving up the state's firm control of the economy. Laid-off workers could apply for licenses to run small businesses.

Castro said Cuba's labor laws and extensive subsidies had created a culture of inefficiency that fed an economic crisis.

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