HAVANA (AP) — Raul Castro said Sunday that his government will scale back controls on small businesses, lay off unnecessary workers and allow more self-employment — significant steps in a country where the state dominates nearly every facet of the economy.

Cuba's president, however, squashed notions of a sweeping overhaul to the country's communist economic system in response to the financial crisis it faces.

"With experience accumulated in more than 55 years of revolutionary struggle, it doesn't seem like we're doing too badly, nor that desperation or frustration have been our companions along the way," the president said.

Castro spoke before parliament, which opened its biannual session without Fidel Castro, who has made a slew of recent public appearances of late but missed another chance to share a major public stage with his younger brother.

Instead, lawmakers got Raul, who said authorities will "update the Cuban economic model," suggesting reforms could be on the horizon. Cuban officials plan to reduce state control of small businesses, authorize more Cubans to become self-employed and build a new tax structure that will compel state employees to contribute more.

About 95 percent of all Cubans currently work for the government and Castro has suggested that as many as one in five state employees are redundant. He promised job cuts, calling for "the reduction of work forces that are considerably bloated in the state sector."

Castro said those left out of work would be retrained or reassigned so as not to stay unemployed, but also said warned that few sectors would be immune to job-cuts.

While he offered no specifics, his comments on economic and employment reform could mean a lot in Cuba, where many had hoped the government of Raul Castro could embrace small economic openings after he took power from his brother, first temporarily, then permanently, in July 2006.

The president's announcements were similar to comments before the session began by Economy Minister Marino Murillo, who spoke to reporters about a pilot program that has turned some state barber shops over to their employees and let them set their own prices while paying rent.

Murillo said such projects would be extended to other sectors of the economy, adding that "we are of the belief that the state has to step back on certain activities."

He also said that allowing outright private ownership was out of the question, however.

"We can't call them reforms. We are studying a modification of the Cuban economic model," Murillo said. He added that officials will ensure that "the values of socialism come first, not the market."

"We will continue following centralized planning," he said, "but we will loosen up on a group of things."

Cuba has pledged to release 52 political prisoners as part of a deal with the island's Roman Catholic Church, and 20 have been freed so far — heading into exile in Spain with their relatives. But Castro said that despite the deal, "there will not be impunity for the enemies of the homeland."

Raul Castro made only limited references to Fidel, who also missed the recent celebration of Revolution Day. Raul attended that event but did not speak — the first time since 1959 a Castro did not deliver a speech on Cuba's top official holiday.

Fidel Castro remains a member of parliament, but his chair to the right of Raul was empty Sunday. He has not appeared publicly alongside his brother since undergoing emergency intestinal surgery and stepping down four years ago.

On Friday, Fidel addressed a Communist youth meeting attended by former castaway Elian Gonzalez, who is now 16. The ex-president has also turned up everywhere from discussions with Cuba's diplomatic corps to the dolphin show at Havana's aquarium.

Outside Cuba, debate has intensified over who is guiding major government policy following the sudden media blitz by Fidel — who had almost completely disappeared from public view until recently. Such questions are far less common on the island, but it is not clear whether Fidel and Raul are deliberately not appearing together in order to make a statement about who is in control.

Raul, meanwhile, made a point of saying Sunday that his government is as unified as ever.

He said it is not a false unanimity that excludes honest discrepancies, "but one that promotes discussion of different ideas, and always with the same goals of social justice and national sovereignty."