HAVANA (AP) - Cuba yesterday announced a major increase in government salaries, days after President Fidel Castro declared war on the nation's "new rich", rewarding workers with high productivity and advanced university degrees.

The Communist Party newspaper Granma spelled out the measures on its front page: Millions of higher-salary workers who did not benefit from a recent increase in minimum wages will be eligible in December for salary increases of as much as US$10 (euro8.50) per month, based on production levels and for postgraduate degrees.

Although the increases seem small by international standards, they were likely to be welcomed by higher-level government workers - some of whom have not received raises in 23 years, Granma reported.

"It is a fundamental principle of the revolution to raise workers' income, beginning with those perceived to have the lowest salaries," Granma said.

It said the goal was to "progressively eliminate the social differences that increased during the special period", referring to austerity measures adopted during the severe financial crisis brought on by the Soviet Union's collapse more than a decade ago.

President Fidel Castro has repeatedly criticised those "social differences" between struggling state workers and those who have grown relatively wealthy though self-employment, remittances from abroad or use of the black market.
Castro last week announced a crackdown on those "new rich", who include people the government reluctantly licensed during more difficult economic times to own small- scale businesses.

In his speech, Castro complained that the "new rich" often corrupt poorer state workers by purchasing stolen government property for their private businesses even though they enjoy government-subsidised utilities and other goods.

The government also announced it would increase bills for households that use large amounts of electricity.
Castro has complained in the past that owners of small private restaurants known as "paladars" pay the same subsidised electricity rates as government workers while bringing in profits most Cubans could only dream of.

With the increase, a household using less than 100 kilowatts a month with a limited number of electrical appliances will continue to pay a fraction of one US cent each month. But a better-off household using 300 kilowatts will now pay about $19 (euro16) and a household using 1,000 kilowatts will pay about $65 (euro55).

The government said the new increases, combined with the recent revaluation of the Cuban peso against the US dollar, would boost workers' buying power.

The dollar was widely used in Cuba as legal tender for 11 years before it was removed from circulation late last year and replaced by a third currency called the Cuban convertible peso.

Government employees with a Master's degree will receive up to 80 pesos (US$4; euro3.40) extra per month. Doctors will get as much as 150 pesos (US$7.40; euro6.30) more.

Cuban salary figures can be misleading because most people pay almost nothing for housing, utilities, transportation, health care and education. Many government services are heavily subsidised, and Cubans receive about a third of their food through a monthly ration that costs less than US$3 (euro2.60).

Employees in highly productive workplaces will be eligible for bonuses of up to 200 pesos (US$9.90; euro8.40) a month.
Pensions for retired people, which were raised in May to a minimum of 150 pesos (US$7.40; euro6.30) a month, will now be 162 pesos (US$8; euro6.80).

The government's social assistance payments for families with members who are unemployed, disabled, handicapped or on maternity leave will also be increased.

The increase in May more than doubled the monthly minimum wage to 225 pesos, or US$11 (euro9.30) for some 1.6 million workers.

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