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Economy of Cuba

Economy of Cuba
Havana, capital and financial center of Cuba
CurrencyCuban peso (CUP) = 100 cents
Calendar year
Country group
Upper-middle income economy[1]
Statistics
PopulationDecrease 9 860 000 (2024)[2]
GDP
  • Increase $100.023 billion (nominal, 2018)[3]
  • Increase $137 billion (2017 est.)[4]
GDP rank
GDP per capita
GDP per capita rank
0.380 (2000 est.)[6]
  • Decrease 0.764 high (2021)[7] (83rd)
  • N/A IHDI (2021)[8]
Labor force
  • Decrease 5,088,527 (2019)[9]
  • State sector 72.3%, non-state sector 27.7% in 2017[4]
  • Decrease 70.5% employment rate (2013)[10]
Unemployment
  • Negative increase 2.6% (2017 est.)[4]
  • Data are official rates; unofficial estimates are about double[4]
Main industries
Petroleum, nickel, cobalt, pharmaceuticals, tobacco, construction, steel, cement, agricultural machinery, sugar
External
ExportsIncrease $2.63 billion (2017 est.)[4]
Export goods
Petroleum, nickel, medical products, sugar, tobacco, fish, citrus, coffee
Main export partners
ImportsIncrease $2.06 billion (2017 est.)[4]
Import goods
Petroleum, food, machinery and equipment, chemicals
Main import partners
FDI stock
  • Steady NA[4]
  • Abroad: $4.138 billion (2006 est.)[4]
Decrease $985.4 million (2017 est.)[4]
Negative increase $30.06 billion (31 December 2017 est.)[4]
Public finances
Negative increase 47.7% of GDP (2017 est.)[4]
−10.8% (of GDP) (2017 est.)[4]
Revenues54.52 billion (2017 est.)[4]
Expenses64.64 billion (2017 est.)[4]
Economic aid$88 million (2005 est.)
Decrease $11.35 billion (31 December 2017 est.)[4]
All values, unless otherwise stated, are in US dollars.

The economy of Cuba is a planned economy dominated by state-run enterprises. In the 1990s, the ruling Communist Party of Cuba encouraged the formation of worker co-operatives and self-employment. In the late 2010s, private property and free-market rights along with foreign direct investment were granted by the 2018 Cuban constitution.[13][14] Foreign direct investment in various Cuban economic sectors increased before 2018.[15][16] As of 2021, Cuba's private sector is allowed to operate in most sectors of the economy.[17] As of 2023, public-sector employment was 65%, and private-sector employment was 35%, compared to the 2000 ratio of 76% to 23% and the 1981 ratio of 91% to 8%.[18][19] Investment is restricted and requires approval by the government. In 2021, Cuba ranked 83rd out of 191 on the Human Development Index in the high human development category.[20] As of 2012, the country's public debt comprised 35.3% of GDP, inflation (CDP) was 5.5%, and GDP growth was 3%.[21][needs update] Housing and transportation costs are low. Cubans receive government-subsidized education, healthcare, and food subsidies.[22][23]

At the time of the Cuban Revolution of 1953–1959, during the military dictatorship of Fulgencio Batista, Cuba's GDP per capita was ranked 7th of 47 Latin American economies.[24] Its income distribution compared favorably with that of other Latin American countries. However, "available data must be viewed cautiously and assumed to portray merely a rough approximation of conditions at the time," according to Susan Eckstein. There were profound social inequalities between city and countryside and between whites and blacks, with trade and unemployment problems.[25] According to an American PBS program, "[o]n the eve of Fidel Castro's 1959 revolution, Cuba was neither the paradise that would later be conjured by the nostalgic imaginations of Cuba's many exiles nor the hellhole painted by many supporters of the revolution."[26] The socialist revolution was followed by the ongoing United States embargo against Cuba, described as "the oldest and most comprehensive US economic sanctions regime against any country in the world."[27]

Between 1970 and 1985, Cuba sustained high rates of growth: "Cuba had done remarkably well in terms of satisfying basic needs (especially education and health)" and "was actually following the World Bank recipe from the 1970s: redistribution with growth".[28] During the Cold War, the Cuban economy was heavily dependent on subsidies from the Soviet Union, amounting to 10% to 40% of Cuban GDP in various years, and valued at $65 billion in total from 1960 to 1990, over three times the total U.S. economic aid to Latin America through the Alliance for Progress.[29][30] While the massive Soviet subsidies funded Cuba's enormous state budget, they did not sufficiently develop a self-sustaining Cuban economy. Described by economists as "a relatively highly developed Latin American export economy" in 1959 and the early 1960s, Cuba's fundamental economic structure changed very little from the Revolution to 1990. Cigars and cigarettes were the only manufactured products among Cuba's leading exports, produced mostly by pre-industrial piecework. The economy remained inefficient and over-specialized in a few commodities purchased by the Eastern Bloc countries.[31]

Following the fall of the Soviet Union, Cuba's GDP declined by 33% between 1990 and 1993, partially due to the loss of Soviet subsidies[32] augmented by a crash in sugar prices in the early 1990s. This economic crisis is known as the Special Period. Cuba's economy rebounded in the early 2000s due to a combination of marginal liberalization of the economy and heavy subsidies from the government of Venezuela, which provided Cuba with low-cost oil and other subsidies worth up to 12% of Cuban GDP annually.[29]

  1. ^ "World Bank Country and Lending Groups". World Bank. Retrieved 29 September 2019.
  2. ^ "Population, total - Cuba". World Bank. Retrieved 27 January 2024.
  3. ^ "GDP (current US$) - Cuba". World Bank. Retrieved 18 January 2020.
  4. ^ a b c d e f g h i j k l m n o p "Cuba". The World Factbook (2024 ed.). Central Intelligence Agency. Retrieved 28 November 2019. (Archived 2019 edition.)
  5. ^ name="worldbank">"GDP per capita (current US$)". World Development Indicators. The World Bank. Retrieved 14 January 2023.
  6. ^ "Cuba grapples with growing inequality". Reuters. 10 April 2008. Retrieved 16 August 2023.
  7. ^ "Human Development Index (HDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 13 October 2022.
  8. ^ "Inequality-adjusted Human Development Index (IHDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Archived from the original on 12 December 2020. Retrieved 13 October 2022.
  9. ^ "Labor force, total - Cuba". World Bank. Retrieved 28 November 2019.
  10. ^ "Employment to population ratio, 15+, total (%) (national estimate) - Cuba". World Bank. Retrieved 28 November 2019.
  11. ^ "Export Partners of Cuba". The Observatory of Economic Complexity. Retrieved 6 September 2024.
  12. ^ "Import Partners of Cuba". The Observatory of Economic Complexity. Retrieved 6 September 2024.
  13. ^ Baer, James A. (11 April 2019). "Cuban Constitution of 2019". Council on Hemispheric Affairs. Retrieved 27 December 2019.
  14. ^ Marc Frank (21 February 2019). "Explainer: What is old and new in Cuba's proposed constitution". Reuters. Retrieved 27 December 2019.
  15. ^ Cite error: The named reference foreigninvestors was invoked but never defined (see the help page).
  16. ^ Yisel Martínez García (12 November 2019). "Foreign investment in Cuba: Obstacles cleared, incentives in place". Granma.
  17. ^ Cite error: The named reference :2 was invoked but never defined (see the help page).
  18. ^ Torres, Nora Gámez (23 June 2023). "Capitalism makes strong comeback in Cuba after six decades of socialism. Will it last?". Miami Herald.
  19. ^ Social Policy at the Crossroads Archived 24 May 2006 at the Wayback Machine Oxfam America Report
  20. ^ Human Development Report 2021-22: Uncertain Times, Unsettled Lives: Shaping our Future in a Transforming World (PDF). United Nations Development Programme. 8 September 2022. pp. 272–276. ISBN 978-9-211-26451-7. Archived (PDF) from the original on 8 September 2022. Retrieved 8 September 2022 – via hdr.undp.org.
  21. ^ "Cuba Economic Freedom Score" (PDF). Heritage. Archived (PDF) from the original on 9 October 2022. Retrieved 1 May 2014.
  22. ^ Upside Down World (16 October 2005). "Talking with Cubans about the State of the Nation (3/5/04)". Upsidedownworld.org. Retrieved 11 June 2015.
  23. ^ Ritter, Archibald R.M. (9 May 2004). The Cuban Economy. The University of Pittsburgh Press. p. 62. ISBN 978-0-8229-7079-8. "Cuban workers are able to survive despite their low wages because they receive free health care and education from the government, and they pay no more than 10 percent of their income for housing."
  24. ^ Frank W. Thompson. "Cuban Economic Performance in Retrospect". CiteSeerX 10.1.1.824.487.
  25. ^ Eckstein, Susan (July 1986). "The Impact of the Cuban Revolution: A Comparative Perspective". Comparative Studies in Society and History. 28 (3): 502–534. doi:10.1017/S0010417500014031. ISSN 0010-4175. JSTOR 178861. S2CID 144784660.
  26. ^ "Pre-Castro Cuba". American Comandante. PBS. 17 November 2015. Retrieved 20 July 2021.
  27. ^ LeoGrande, William M. (Winter 2015). "A Policy Long Past Its Expiration Date: US Economic Sanctions Against Cuba". Social Research. 82 (4): 939–966. ISSN 0037-783X. JSTOR 44282148.
  28. ^ Brundenius, Claes (March 2009). "Revolutionary Cuba at 50: Growth with Equity Revisited". Latin American Perspectives. 36 (2): 31–48. doi:10.1177/0094582X09331968. ISSN 0094-582X. JSTOR 27648178. S2CID 153350256.
  29. ^ a b Mesa-Logo, Carmelo (10 March 2019). "Cómo romper con la dependencia económica de Cuba". The New York Times (in Spanish). ISSN 0362-4331. Retrieved 12 January 2023.
  30. ^ "GDP (current US$) - Cuba | Data". World Bank. Retrieved 11 October 2019.
  31. ^ The Economic Impact of U.S. Sanctions With Respect to Cuba. United States International Trade Commission, Publication 3398. Washington D.C., February 2001. Citing ECLAC, La Economia Cubana, p. 217; IMF, Direction of Trade Statistics Yearbook, various editions; and EIU, Cuba, Annual Supplement, 1980, p.22.
  32. ^ [Brundenius, Claes (2009) Revolutionary Cuba at 50: Growth with Equity revisited. Latin American Perspectives Vol. 36 No. 2, March 2009, pp. 31-48.]


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