CUBA STANDARD — Although foreign investors at the Mariel Special Development Zone (ZEDM) will still have to hire employees through a state agency, they will be able to negotiate salaries, contract self-employed Cubans, and hire as many foreign workers as they want, and workers will pocket most of what their employers pay the agency.
Speaking at the FECONS construction fair in Havana, Mariel Zone chief executive Ana Teresa Igarza said that workers at Mariel will receive 80% of what employers pay the agency, and employers will freely negotiate salaries with the agency, without having to adhere to any fixed tariffs.
Previously, foreign joint ventures paid salaries under to a fixed scale in convertible pesos (CUC) to state agency ACOREC, which passed on only a fraction to workers, in non-convertible Cuban pesos (CUP). Under that arrangement, foreign companies had few means to provide incentives to Cuban employees; in a legal gray zone, “many employers” have been paying hard-currency “gratifications” to good workers, Igarza recognized.
Igarza didn’t say whether under new regulations the state agency will offer employers a choice of workers. However, the new rules do not put any limits on hiring foreign workers, and the new foreign investment law also allows contracting self-employed Cubans through the state agency, according to reports in official media.
The state agency is designed to help foreign investors, because “many don’t know the country, and they will be offered suitable workers,” Foreign Trade and Investment Ministry official Deborah Rivas defended its continued existence in a press conference with local media last week.
Igarza said the new employment agencies’ main aim, according to the new foreign investment law passed in March, is not to collect, but to “offer a service” — “to supply and facilitate the personnel best qualified for the activity.”
“This will make investors feel motivated because they have to pay less, and workers as well because they receive larger salaries than those before, and therefore productivity is incentivized,” Igarza said, according to official news reports.
In negotiating salaries, employers must consider the high level of education among Cuban workers, Igarza said during her speech. The Foreign Investment Ministry’s Rivas said that negotiations will be based on comparable salaries in Latin America and average salaries in Cuba. If an example cited by Igarza is an indication, Mariel jobs could pay more than 10 times as much as the median salary in Cuba. The 20% fee will go towards the cost of providing services, such as maintaining offices, Igarza said.
In a hint of how the government is planning for a currency merger, Igarza said that during the transition the workers will be paid in soft-currency CUP, at a rate of 10:1 for each hard-currency CUC the employer pays the agency. Observers have predicted a CUC devaluation in that range as part of the ongoing currency reform; the current exchange rate is 25 CUP per CUC. The CUC will eventually be pulled out of circulation.
Regulations about contracting and paying personnel will soon be published in the Gaceta Oficial, Igarza said. The new foreign investment law, passed by the National Assembly March 29, has yet to be published.
During the same speech, Igarza said the Mariel Zone administration is working closely with foreign investors on 15 projects, which could materialize as early as this year.