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CUBA: Women Face Challenges in Growing Self-Employment Sector

Patricia Grogg

HAVANA, Jul 11 2011 (IPS) - “Coffee! Get your plastic bags here! Cream cheese, the very best…!” The voices blend in with the cries of other vendors and the noise typical of Cuban markets. Elisa, 64, was one of the hawkers until she was fined for selling her products without a permit. “I paid dearly for it,” she says.

Someone advised Elisa to get a permit to keep selling the bags of plastic material her niece made on a borrowed sewing machine. “But I’m too old for that. And what do I do afterwards if I can’t pay the taxes?” she wonders. Without waiting for an answer, she disappears among the customers appraising prices and quality among the different stands at the farmers’ market.

Alejandrina is another self-employed worker who began sewing clothes for her friends 10 years ago. “So far, nobody’s told me I have to register as a self-employed worker. I can’t decide whether I should do so, because the taxes are sky-high,” she comments.

In contrast, Felicia obtained her hairdresser’s licence in the 1990s, and says “it’s business as usual” for her.

In the first quarter of this year, about 300,000 people in this country of 11.2 million moved from the state sector to the private sector, in light of the expansion of self-employment from 157 to 178 trades and activities and the drastic reduction of the state payroll. The authorities hope to encourage more people to apply for permits for self-employment, with rules aimed at easing the tax burden.

Self-employment first began to be allowed during the severe crisis that shook the country in the 1990s following the collapse of the socialist camp.

Registered self-employed workers jumped from 50,000 to 121,000 in 1994, one year after a decree-law authorised its expansion. The highest number of officially registered workers was 165,000 in 2005. However, according to researchers, the growth of the sector was limited by a large number of restrictions.

“The weak legal framework for the self-employed to effectively carry out their activities has led them to subsist in a state of illegality,” say Cuban economists Omar Everleny Pérez Villanueva and Pável Vidal, in an extensive study on the issue.

This sphere of activity, moreover, was marked by its supposedly temporary nature and an ideologically-based wariness of it in the context of Cuba’s socialist economic and political system.

In the 1990s, many women took advantage of the non-state economic sector, but generally in subordinate roles as helpers who were family members, often without any remuneration whatsoever, and as such they remained essentially invisible. According to official figures, as of 2007 women made up about one-fourth of registered self-employed workers.

According to experts on the issue, during this second wave of reforms in self-employed work, the existing precarious informal sector, made up mainly of women, could grow.

The most visible self-employed workers are the higher earners, who are a minority in the sector. “The list of permitted trades, moreover, mainly includes activities traditionally associated with men,” said one source.

In that respect, Professor Luisa Iñiguez notes that in Havana, where the economically-active female population is almost 50 percent of the total, only 38 percent of self-employment applications had been presented by women as of Jan. 31.

This figure already indicates a disadvantage in terms of women becoming involved in self-employment, commented Iñiguez, consulted by IPS during a seminar organised by the Centre for the Study of the Cuban Economy, and jointly supported by the Friedrich Ebert Foundation and the Swiss Agency for Development and Cooperation.

Through simple observation, it may be seen that in the self-employed sector women hold occupations traditionally considered as feminine. In that sense, they may be seen more frequently as food processors and vendors, landladies (renting rooms), embroiderers, knitters and weavers, manicurists, hairdressers, nannies and domestic workers.

Women’s remunerated work is concentrated fundamentally in the state and civil sector, where they comprise 42.7 percent of the total. In 2009, women made up 59 percent of administrative personnel, according to the National Office of Statistics.

The greater opening and flexibility in the self-employed sector is part of the reforms of the so-called “updating” of Cuba’s economic model, and was designed by the government to help create alternatives to the cutting of more than one million state jobs between 2011 and 2015. The original schedule for those cuts, which began last October, has been postponed.

According to Pérez Villanueva and Vidal, “the original estimates apparently did not anticipate, among other elements, that the legal spaces opened for self-employment could be filled before the rationalisation (reduction) of state employment materialised, by people who were not previously employed, were retired, and/or were already carrying out these activities informally.”

Statistical data quoted in the study show that 68 percent of the 221,839 new permits granted and being processed as of April belonged to people who were not previously employed, and 16 percent belonged to retirees and state workers. Neither the official reports nor the article by the two economists provides data broken down by gender.

Many permits, moreover, have been granted to people who were already self-employed, but without authorisation. Pérez Villanueva and Vidal agree that microcredit and the wholesale supply market, key to the growth of the non-state sector, could also encourage people to apply for permits, because to have access to them, self-employed workers must be registered and pay taxes.

Other analysts warn that while women make up nearly 65 percent of university graduates and 66 percent of the country’s technical and professional workforce, the options available to them for private work are as precarious and unskilled as they are for men. In fact, only seven percent of the permits granted as of April went to university graduates.