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Cuba: pirates with permits

Cuba's new economic reforms bring out the DVD bootleggers.

With Cuba in the process of shedding 500,000 state workers, the government is looking to move employees off the public payrolls and capture new revenue from the island’s large informal sector. By licensing these off-the-books occupations — like selling DVDs and CDs — the government can attempt to bring some degree of regulation, even if it could care less about copyright protections.

What is less visible at this stage of the reform process are private establishments that resemble small businesses elsewhere in the world. There’s little advertising or signage, and the city remains full of empty storefronts and other under-utilized state-owned property that could be more productive in private hands. Further liberalization measures are likely forthcoming in 2011, when Cuba’s Communist Party will hold its first congress in 14 years.

Government officials say they’ve issued more than 46,000 new self-employment licenses, with another 20,000 in the pipeline. The average processing time for the permits is a mere five days — a light-speed pace by the standards of Cuban bureaucracy. In recent weeks, Cuba’s state-run newspapers and television programs have devoted extensive coverage to the permitting process and the new tax structures.

Still, it’s not clear how Cuba can possibly generate enough jobs to absorb the 500,000 workers — one-tenth of the country’s labor force — who are due to be laid off by April. And deeper cuts are soon to follow.

In formal meetings held at Cuban workplaces to discuss the economic changes in preparation for the congress, employees have consistently asked for further liberalization measures, while government officials take great pains to insist the country isn’t embracing capitalism, but “perfecting” socialism.

Ordinary Cubans on the streets say they’re looking for more variety and better services — and the newly licensed entrepreneurs are delivering.

“I’d like to see them legalize more things,” said Humberto Davila, having just purchased a CD of salsa music for 30 Cuban pesos ($1.25). “This country needs to change a lot.”