In its statement Monday, the Cuban Workers’ Central, the country’s only recognized labor federation, openly acknowledged the nation’s troubled economy, saying that changes were “necessary and could not be delayed.” 
 
 “Cuba faces the urgency to advance economically,” the statement said. The revamp is also the most drastic effort to revive the country's flagging economy since President Raul Castro, the brother of retired dictator Fidel Castro, took the helm of the Communist country more than four years ago after his brother fell gravely ill. But these initial reforms have been comparatively limited, many analysts contend, and Cuba’s economy — grappling with the fallout from the global financial crisis and the aftermath of devastating hurricanes in 2008 — appears to be in dire shape. Over the past several months, President Raúl Castro has given stern warnings that Cuba’s economy needs a radical overhaul, beginning with its workers. With as many as one million excess employees on the state payroll, Mr. Castro has said, the government is supporting a bloated bureaucracy that has sapped motivation and long sheltered a huge swath of the nation’s workers. “There is a belief that there is so much pent-up demand on the one hand and so much skill on the other that the private sector will absorb them pretty rapidly.” 
 
 Ms. Sweig said that it appeared the government was preparing to open up a vast range of activities, including light manufacturing like furniture making and garment production. The changes were announced shortly after the elder Mr. Castro, who heads Cuba's Communist Party, and wields enormous influence on the island, gave a controversial interview to The Atlantic magazine, in which he said the Cuban model no longer worked for any country, much less Cuba. But in a speech at the University of Havana shortly after his remarks were published, he said that he had been misinterpreted and that what he meant was that capitalism did not work. “They are in the process of massively reducing the size and participation of the state in Cuban life,” said Julia E. Sweig, a Cuba expert at the Council on Foreign Relations who was in Havana a couple of weeks ago. But the result will likely be higher wages for those in the private sector, said Philip Peters, a Cuba expert with the Lexington Institute, a think-tank in Arlington, Va.
– Cuba's announcement that it's looking to whack a half-million workers off the state payroll by March is a significant move toward capitalism, reports the Wall Street Journal. Bearing some 85% of the nation's 5.5 million workers on the government payroll, as well as a ravaged economy, the island nation has little choice but to offload a significant number into the private sector. "Our state can't keep maintaining bloated payrolls," said Cuba's national union yesterday. Now Cuba watchers are split on whether that private sector can absorb Castro's move: "There is so much pent-up demand on the one hand and so much skill on the other," one tells the New York Times, so the transition will happen "pretty rapidly.” Baloney, says another: "There is no private sector to absorb them." Regardless, Castro said last month: “We have to erase forever the notion that Cuba is the only country in the world where one can live without working." For Raul Castro's earlier flirtations with free markets, click here.