COMMUNIST CUBA - AN ECONOMIC DISASTER

Both Communism and Socialism are very palatable subjects for a coffee shop gossip, but

in the hard reality of global economy, it has been losing its relevance since long. Communists leaders who realised it in time have been able to transform their country into the new era of free trade like China, but the more staunch national communist leaders could only found themselves on the wall photo frames like in Russia, East Germany, Romania etc.

Cuban leaders perhaps have had a late wake up call in this regard and Cuba in on its way of economic liberalisation and privatisation. Till now, it is largely a planned economy with majority under state control. But compared to the last decade the private sector employment in Cuba has risen from 8% to 23%. From the era of ‘no investment’ it is now gone into the ‘restricted investment’ zone.

During the ‘Cold War’ period for a long time Cuban economy was thriving on Soviet subsidy but with the collapse of the Soviet union in 1991 the Cuban economy had the initial test on sustainability which it failed miserably. The Cuban gross domestic product (GDP) declined at least 35% between 1989 and 1993 due to the loss of 80% of its trading partners and Soviet subsidies. Besides Tobbaco and cigar production and export Cuba did not have any mentionable industry of its own. Sugar has been perhaps their only notable agricultural product. By the year 2000 more than 50% of the Cuban sugar mills closed. After Cuba lost Soviet subsidies in 1991,  malnutrition   resulted in an outbreak of diseases. In 2007, Cuba produced an estimated 16.89 billion kWh of electricity and consumed 13.93 billion kWh with no exports or imports. (Source -https://en.wikipedia.org/wiki/Economy_of_Cuba#:~:text=houses%20and%20advisers.,Wages%2C%20Development%2C%20and%20Pensions,majority%20of%20Latin%20American%20nations)

Cuban Doctors, Engineers used to work at a salary of $30 to $100 per month. Staff Nurse salaries in Cuba range from 9,300 CUP per month (minimum salary) to 26,000 CUP per month (maximum salary).

The Cuban economy remained inefficient and over-specialized in a few highly subsidized commodities provided by the Soviet bloc countries. Following the collapse of the Soviet Union, Cuba's GDP declined by 33% between 1990 and 1993, partially due to the loss of Soviet  subsidies     and a crash in   sugar prices in the early 1990s. It rebounded in the early 2000s due to a combination of marginal liberalization of the economy and heavy subsidies from the friendly government of  Venezuela, which provided Cuba with low-cost oil and other subsidies worth up to 12% of Cuban GDP annually.   From 1999 to 2007 the Cuban economy saw a growth from 6.2% to 7.5% chiefly due to growth of tourism in the region.

In December, 2010, President Raul Castro said’ Either we change course or we sink.’ Since then, over 400,000 Cubans have signed up to be entrepreneurs. As of 2012, the government lists 181 official jobs no longer under their control—such as taxi driver, construction worker and shopkeeper.

However, till 2014 Cuba's economic freedom score was 28.7, making its economy one of the world's least free. Its overall score was 0.2 point higher than last year. (Source ----------------------------------------------------------------------------------------------------https://en.wikipedia.org/wiki/Economy_of_Cuba#:~:text=houses%20and%20advisers.,Wages%2C%20Development%2C%20and%20Pensions,majority%20of%20Latin%20American%20nations)

A long way to go still now. Economic liberalisation, privatisation, free trade and massive industrialisation are the only ways that can bring back a Cuban smile.

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