DAVID GREENE, host:
Now to Cuba, where the government is planning to lay off more than half a million workers over the next six months. That's a tenth of the country's entire labor force. New opportunities for small, private entrepreneurs and cooperatives are supposed to absorb many of those displaced workers. Indeed, some Cubans are already drawing up their business plans.
But as Nick Miroff reports from Havana, there are plenty of signs the island is in for a rough transition.
NICK MIROFF: In Havana's Miramar neighborhood, there's a seaside shopping area called La Copa that reflects much of what is wrong with Cuba's state-run economy. The surrounding neighborhood is full of tourist hotels, foreign businesses and Cuban elites with money to spend. Yet, many of the storefronts here are empty. Dozens of Cubans mill about during the day with nothing to do.
On the corner is a drab pizzeria with more flies than customers at lunchtime. Under Raul Castro's new plan, it's the kind of state-run business that could be converted into a cooperative and run by workers like Carlos Alberto Gonzalez, who might be motivated to fix it up if they could keep the profits and have a say in how things run.
Mr. CARLOS ALBERTO GONZALEZ: (Speaking Spanish)
MIROFF: I think these changes are really important and a good thing, Gonzalez said. With personal incentives, the workers will make more, the state will make more, and customers will get better service, he said.
Gonzalez and others here say they're excited about new opportunities, but also full of questions. How will taxes be assessed? If the government starts renting out its commercial properties, will state banks give loans for start-up capital? And what happens if some Cubans get rich? Will the government allow that?
(Soundbite of key making)
MIROFF: Locksmith Noel Martinez cuts keys along this busy Havana street - one of the 150,000 or so Cubans already licensed to work for themselves. He pays about 10 percent of his earnings to the state in taxes. While some Havana residents say they're worried the mass layoffs will lead to more crime, Martinez said Cuba is ready for a new wave of entrepreneurs.
Mr. NOEL MARTINEZ: (Speaking Spanish)
MIROFF: You have more freedom because you can set your own hours, Martinez said. I think this is form of employment will really help our economy.
In the early 1990s, when the Soviet Union's demise sent Cuba's economy off a cliff, Fidel Castro let Cubans rent rooms to foreigners and open small restaurants in their homes. But the Communist government treated those measures like a necessary evil. Raul Castro's reforms appear to be different and more permanent. But after 50 years of state control, it's not clear that a simple management change will work.
Ms. YADIRA PAVON: (Speaking Spanish)
MIROFF: Yadira Pavon says it'll take time for Cubans to adjust. Her state-owned beauty shop was made into a cooperative three months ago. But the place is in ruins. Its rusting hair dryers were made in the Brezhnev era. Pavon and her partners have no business cards, they can't advertise and their plan seems to mostly consist of charging their old clients more money for similar services. Other Cubans do seem to have good business ideas and aren't only motivated by profits.
Musician Inti Santana is part of a group that wants to open a cafe that will have live music and an art gallery space. They like the idea of a workplace where the boss is neither a capitalist owner nor a state bureaucrat.
Mr. INTI SANTANA: (Speaking Spanish)
MIROFF: This will be something totally new, Santana said. We want a democratic workplace, where we'll all participate in decision-making.
While economics may be driving these reforms, there will surely be unknown political effects as well, as more Cubans work and make decisions for themselves.
For NPR News, I'm Nick Miroff in Havana.