Cuba's Raicel Iglesias pitches a ball during the last preparation game for the World Baseball Classic (WBC) in Fukuoka in this March 1, 2013 file photo. REUTERS/AIN /Ricardo Lopez Hevia/GRANMA

By Nelson Acosta

HAVANA (Reuters) - Cuban athletes will be allowed to work abroad and have been granted significant pay increases for their performance, official media said on Friday, in hopes of stemming a decline in the country's results in international competitions.

The government's decision came as athletes, in particular baseball players, are defecting in record numbers, with 21 currently contracted by the U.S. major leagues, some earning multimillion dollar salaries.

Just this week, a promising young Cuban pitcher for the national squad, Raicel Iglesias, 23, failed to show up for training and was widely believed to have left the island, which would make him the latest prospect to seek a lucrative contract in the United States.

Cuba's famed boxing team suffered a similar series of defections in recent years, lowering its performance at the Olympics, world championships and other international events.

The exodus of athletes is mainly due to wages equivalent to $20 per month, in sharp contrast to their potential earnings abroad. The new measures would increase those salaries to between $40 and $200 for top athletes.

The measure is the latest reform of the Soviet-style system under President Raul Castro, who replaced ailing brother Fidel in 2008 with a call to update the country's economic and social system to the 21st century.

Cuba's Council of Ministers approved the measures "to perfect the compensation system of athletes, trainers and specialists," Granma, the Communist Party daily, said.

"Other measures will progressively go into effect to update practices so they are more in sync, from our perspective, with the world and thus contribute to achieving better results in sports," it added.

Although the salary increases are still modest by international standards, they are not considered insignificant in Cuba, where most public services are heavily subsidized.

"The country is changing and sports is not an exception," Stefano Arcobelli, a local baseball expert, said.

"Athletes will now be more enthusiastic and once more put their teams out front in many sports where they have lost their edge, for example volleyball and fencing," he said.

The Cuban government has repeatedly denounced what it calls the theft of its talent, charging it is part of U.S. efforts to undermine socialism and part and parcel of sanctions that do not allow contracts with Cuban athletes, who pay taxes to the government.

Los Angeles Dodgers outfielder Yasiel Puig, who left Cuba in 2012, signed a seven-year, $42 million contract. Puig made his Major League debut on June 3 and has emerged as one of the top contenders for the Rookie of the Year title.

Oakland Athletics outfielder Yoenis Céspedes, winner of this year's Home Run Derby, the popular competition the day before the annual All-Star Game, defected in 2011 and signed a $36 million, four-year contract.

The new measures, approved by the government last week, allow athletes to sign contracts with professional leagues abroad, breaking with a policy established soon after the 1959 revolution, which shunned professional sports as exploitative.

The athletes will still have to "meet their obligations to national teams," Granma said, including in international competitions, and contracts with foreign teams will have to go through the state's sports institute for approval.

The announcement in Granma did not specify which foreign countries, but the U.S. major leagues were likely to remain off limits to Cuban players, baseball experts say.

Since the revolution, only a handful of baseball players living in Cuba have been contracted by foreign leagues.

This year, outfielder Alfredo Despaigne played for the Pirates of Campeche, Mexico, in July and August, and third baseman Omar Linares, as an official "exception," was allowed to play in Japan's professional league in 2000.

Under the new performance-based pay scale, athletes will earn higher monthly salaries and can obtain bonuses for success in national and international competition.

For example, an active Olympic gold medalist will earn 2,500 pesos a month, equivalent to $104 at the local exchange rate. Top baseball players would earn 5,000 pesos ($208) a month. Cuba's national championship team will earn a 65,000 peso bonus ($2,700), while the runner up will receive 45,000 pesos, ($1,870).

(Editing by David Adams and Doina Chiacu)