(Reuters) - The Cuban government will begin contracting out some services to the private sector next year in a break from the state-dominated past aimed at helping small business develop, government insiders said on Monday.

They said food and cleaning, construction and some transportation services, all of which are currently done by government workers, were among those that would be contracted out in the future as Cuban leaders push ahead with more than 300 reforms to modernize the island's Soviet-style economy.

President Raul Castro is encouraging private sector growth to create jobs for the one million employees he hopes to slash from bloated government payrolls over the next few years. His goal is to strengthen Cuban communism to assure its future.

More than 350,000 people are now self-employed, more than double the number of two years ago, although most are small operations based in homes.

Their ability to grow has been hindered partly by a lack of capital and access to government business, which is significant because the state controls most of the economy.

But new credit and banking regulations that take effect December 20 will allow small businesses for the first time to obtain loans and, along with private farmers, to open commercial accounts, a prerequisite for doing business with the state.

The measures also lift a 100 peso- (roughly $4-) cap on business between state enterprises and private individuals.

"It is very positive for the development of the non-state sector that it now has at its disposal new financial instruments that before were available only to state companies and joint ventures with foreign companies," said a local economist, requesting anonymity due to a ban on talking with foreign journalists.

"It paves the way for business between the new non-state sector and the state."

Cuba expert Phil Peters at the Lexington Institute think tank in Arlington, Virginia, said the measures, in addition to helping the private sector, should make the government more efficient and were indicative of a larger change.

"It is another sign that the socialist state is shedding longstanding prejudice against private enterprise," he said.

(Editing by Jeff Franks and Paul Simao)



Recent Articles

Date Title
11/30/11 Pilgrimage to see pope in Cuba considered
Daniel Shoer Roth, Miami Herald
11/30/11 Castro’s Demise Won’t Erase Troubled U.S. Legacy: Enrique Krauze
Enrique Krauze, Bloomberg
11/28/11 Wife: Man imprisoned in Cuba concerned before trip
The Associated Press
11/28/11 Police detain dissidents headed for Havana forum on racism
Juan Tamayo, El Nuevo Herald
11/28/11 Current Record
11/28/11 Yoani Sanchez listed #81 on Foreign Policy's Top 100 Global Thinkers
Foreign Policy
11/26/11 Cyber commandos spill phone numbers of top Cuban officials
Juan Tamayo, El Nuevo Herald
11/24/11 Cuba to launch bank loans for farmers, small-business owners, others in December
AP, The Washington Post
11/23/11 Cuba and Venezuela: oil and politics
BBC
11/23/11 Poll shows Cubans optimistic over reforms, but long way to go
Juan Tamayo, The Miami Herald
11/23/11 Cuba relaxes bureaucratic requirements on migration to capital for family of residents
AP, The Washington Post
11/22/11 Pull of Family Reshapes U.S.-Cuban Relations
Lizzette Alvarez, The New York Times
11/21/11 Cuba to allow farmers to sell directly to hotels
BBC News; Isle of Man
11/19/11 Amid economic reforms, Cuba goes after corruption
The Huffington Post
11/17/11 New credit policy coming
Phil Peters, The Cuban Triangle
11/16/11 Cuba liberalises barber shops
BBC News
11/15/11 Inside the State Department funding bill SNAFU
The Cable - Foreign Policy
11/15/11 Cuban oil project fuels US anxieties
BBC News
11/15/11 Cuban oil project fuels US anxieties
BBC News
11/15/11 Sen. Rubio seeks more information on State Dept. nominee for the Western Hemisphere
AP, Washington Post
11/14/11 "Minibus" bill held hostage over Cuba provisions
The Cable - Foreign Policy
11/14/11 Report: U.S. needs to encourage economic reforms in Cuba
Mimi Whitefield, Miami Herald
11/13/11 Is it the end of the road for Cuba's classic cars?
BBC News; Isle of Man
11/11/11 Cuba Pol Cool to Talk of Release, Swap for US Man
The New York Times
11/11/11 Cubans line up to buy, sell homes under new reform
Rosa Tania Valdes and Nelson Acosta, Reuters
11/11/11 Cuba's Economic Reforms: Progress or Survival Tactic?
Mark Keller, Council of the Americas
11/10/11 Cubans Line Up to Buy, Sell Homes Under New Reform
International Herald Tribune - The New York Times (Global Edition)
11/10/11 Pope May Visit Cuba, Mexico Next Spring
International Herald Tribune - The New York Times (Global Edition)
11/10/11 Cuba property reform could have "enormous impact"
Silvia Ayuso, Deutsche Presse-Agentur
11/9/11 Cuban Official Says Corruption Crackdown to Go On
International Herald Tribune - The New York Times (Global Edition)
11/9/11 Why are Cubans learning Chinese?
BBC News
11/8/11 Raul Castro Names New Cuban Defense Minister
The New York Times
11/6/11 Commercial flights to Cuba take off from some U.S. airports
CNN.com
11/6/11 Free-market reforms take hold in Cuban countryside
The Associated Press
11/5/11 Relenting on Car Sales, Cuba Turns Notorious Clunkers Into Gold
International Herald Tribune - The New York Times (Global Edition)
11/5/11 Castro critica derroche en empresas estatales cubanas
El Universal
11/4/11 Analysis: Cuba Reforms Convincing Island's Cynics
International Herald Tribune - The New York Times (Global Edition)
11/3/11 Cuba's new entrepreneurs say times are tough
BBC News
11/3/11 Cuba legalizes sale, purchase of private property
Paul Haven, AP
11/2/11 Award-winning Cuban dissident 'detained and beaten'
AFP
11/2/11 Brazil wants to help Cuba update its economic model
Fox News Latino
11/1/11 Cubans test official limits on criticism
AP, The Washington Times