Cuba expands free-market reforms Published duration 26 December 2011

image caption Many restaurants and food stalls are already privately operated

Cuba says it is expanding free-market reforms, opening more of the retail services sector to private business.

From 1 January workers including carpenters, locksmiths, photographers and repairmen will be allowed to become self-employed.

They will be able to set their own prices, while paying taxes and leasing their premises from the state.

The measures are the latest reforms aimed at reviving Cuba's socialist economy by boosting private enterprise.

President Raul Castro, who took over from his brother Fidel in 2008, has said the changes represent an effort to update rather than abandon the socialist model.

His government plans to have up to 40% of the the workforce employed by the non-state sector by 2016, compared with just 10% at the end of 2010.

Dramatic change

Restrictions on private business have been relaxed, large numbers of state workers have been laid off, and tens of thousands of Cubans have applied for licenses to work for themselves.

For the first time in decades people are allowed to buy and sell homes and cars and take out private business loans from banks.

Earlier this year state barbers shops and beauty salons were handed over to their employees, who now work for themselves while paying rent, tax and social security to the state.

That initiative is now being extended to a wide range of small retail services, including shoe, watch and electronic repairs, the official Communist Party newspaper Granma said.

The change will be rolled out gradually over the course of the year, starting in six provinces including the capital, Havana.