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Economy of Cuba

The Economy of Cuba is a planned economy dominated by state-run enterprises. Most industries are owned and operated by the government and most of the labor force is employed by the state. Following the fall of the Soviet Union, the Communist Party encouraged the formation of cooperatives and self-employment.

In the year 2000, public sector employment was 76% and private sector employment, mainly composed of self-employment, was 23% compared to the 1981 ratio of 91% to 8%. Investment is restricted and requires approval by the government. The government sets most prices and rations goods to citizens. In 2009, Cuba ranked 51st out of 182 countries with a Human Development Index of 0.863; much higher than its GDP per capita rank (95th). In 2012, the country's public debt was 35.3% of GDP. Inflation (CDP) was 5.5%. That year the economy GDP growth was 3%.

Housing and transportation costs are low. Cubans receive free education, health care and food subsidies. Corruption is common, although allegedly lower than in most other countries in Latin America.

The country achieved a more even distribution of income since the Revolution and the subsequent economic embargo by the United States. Following the collapse of the Soviet Union, Cuba's GDP declined by 33% between 1990 and 1993, partially due to loss of Soviet subsidies and to a crash in sugar prices in the early 1990s. Yet Cuba retained relatively high levels of healthcare and education.

Sectors

Energy production

As of 2011, 96% of electricity was produced from fossil fuels. Solar panels were introduced in some rural areas to reduce blackouts, brownouts and use of kerosene. Citizens were encouraged to swap inefficient lamps with newer models to reduce consumption. A power tariff reduced inefficient use of power.

As of August 2012, off-shore petroleum exploration of promising formations in the Gulf of Mexico had been unproductive with two failures reported. Additional exploration is planned.

In 2007 Cuba produced an estimated 16.89 billion kWh of electricity and consumed 13.93 billion kWh with no exports or imports. In a 1998 estimate, 89.52% of its energy production is fossil fuel, 0.65% is hydroelectric and 9.83% is other production. In both 2007 and 2008 estimates, the country produced 62,100 bbl/d of oil and consumes 176,000 bbl/d with 104,800 bbl/d of imports, as well as 197,300,000 bbl proved reserves of oil. Venezuela is Cuba's primary source of oil.

AgricultureCuba produces sugarcane, tobacco, citrus, coffee, rice, potatoes, beans and livestock. As of 2015 Cuba imported about 70-80% of its food. and 80-84% of the food it rations to the public. Raśl Castro ridiculed the bureaucracy that shackled the agriculture sector. Before 1959, Cuba boasted as many cattle as people. Today meat is so scarce that it is a crime to kill a cow without government permission. Cuban people suffered from starvation during the Special Period.

Industry

In total, industrial production accounted for almost 37% of Cuban GDP, or US$6.9 billion and employed 24% of the population, or 2,671,440 people, in 1996. A rally in sugar prices in 2009 stimulated investment and development of sugar processing.

In 2003 Cuba's biotechnology and pharmaceutical industry was gaining in importance. Among the products sold internationally are vaccines against various viral and bacterial pathogens. For example, the drug Heberprot-P was developed as a cure for diabetic foot ulcer and had success in many developing countries.

Scientists such as V. Verez-Bencomo were awarded international prizes for their contributions in biotechnology and sugar cane.

Tourism

In the mid-1990s tourism surpassed sugar, long the mainstay of the Cuban economy, as the primary source of foreign exchange. Havana devotes significant resources to building tourist facilities and renovating historic structures. Cuban officials estimate roughly 1.6 million tourists visited Cuba in 1999 yielding about $1.9 billion in gross revenues. In 2000, 1,773,986 foreign visitors arrived in Cuba. Revenue from tourism reached US $1.7 billion. By 2012, some 3M visitors brought nearly £2 billion yearly.

Retail

Cuba has a small retail sector. A few large shopping centers operated in Havana as of September 2012 but charged US prices. Pre-Revolutionary commercial districts were largely shut down. The majority of stores are small dollar stores, bodegas, agro-mercados (farmers' markets) and street stands.

Finance

The financial sector remains heavily regulated and access to credit for entrepreneurial activity is seriously impeded by the shallowness of the financial market.

Foreign investment and trade

The Netherlands receives the largest share of Cuban exports (24%), 70 to 80% of which go through Indiana Finance BV, a company owned by the Van 't Wout family, who have close personal ties with Fidel Castro. Currently, this trend can be seen in other colonial Caribbean communities who have direct political ties with the global economy. Cuba's primary import partner is Venezuela. The second largest trade partner is Canada, with a 22% share of the Cuban export market.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Cuba"

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