More than 20 restaurants to be run by employees as part of wide reforms

More than 20 state restaurants in Cuba are due to become employee-run cooperatives in October, with hundreds more likely to follow if the experiment succeeds.

All aspects of the business, from buying the food to splitting the profits, will be decided by the employees, rather than the government.

A similar process is already underway in other sectors from construction and transportation to farmers' markets and light manufacturing.

The restaurants are the first to be ceded by the state since the authorities took over all eateries in 1968.

Today, there are close to 2,000 private restaurants as local entrepreneurs take advantage of market-oriented reforms initiated by President Raul Castro, who took over from his brother Fidel in 2008.

"The government is hoping that cooperative owners, with pride in their establishments and motivated by profits, will offer much better service and higher quality goods to customers, both to tourists and fellow Cubans," said Richard Feinberg, a nonresident senior fellow of the Washington-based Brookings Institution.

Some of the restaurants slated to become coops are off the beaten track and cater to a mainly Cuban clientele using the local peso currency.

Others - for example La Casona de 17 and La Divina Pastora, both in Havana - operate in a dollar equivalent, called the convertible peso or CUC, and serve mainly tourists.

The Divina Pastora, nestled under Moro Castle at the narrow entrance to the Bay of Havana, sits on some of the city's most valuable real estate.

La Casona de 17 is part of the tourism ministry's entertainment and restaurant chain, Palmares, which operates upscale establishments across the island.

"We are a pilot project, but in the future I think all Palmares restaurants will become cooperatives," said Marylin Herrera, 25, as she waited on tables at La Casona de 17 in the busy Vedado district.

Herrera said it would be quite a challenge for the 50-odd workers to run the restaurant, but looked forward to having "much more flexibility in how we operate and what we offer".

Castro, speaking at a Communist Party congress in 2011 where a sweeping plan to revamp the economy was approved, outlined efforts to create a non-state sector of private and cooperative businesses.

"The growth of the non-public sector of the economy ... will allow the state to focus on raising the efficiency of the basic means of production ... while relieving itself from those management activities that are not strategic for the country," he said.

Castro has already taken steps to deregulate small private businesses in the retail service sector. Thousands of smaller state shops and taxis have been leased to individual employees, and fallow state lands have been leased to would-be small farmers in search of improved production and efficiency.

"We are in an experimental phase with a group of cooperatives in certain sectors of the economy. This allows us to follow each project, learning as we go along before they become generalized," Grisell Trista Albasu, a member of the Communist Party commission charged with implementing the reform plan for state businesses, said.

The cooperatives function independently of state entities and businesses, set prices according to the market in most cases, and receive better tax treatment than private businesses, according to a decree published in December.

Reuters

(China Daily 08/28/2013 page10)