Economy of Cuba
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Skyline of Havana
|Currency||Cuban peso (CUP) = 100 centavos and Cuban Convertible Peso (CUC) = 24 CUC|
$72.3 billion (Nominal) (2012 est.)$121 billion (2012 est.) (PPP)
|GDP rank||66th (nominal) / 66th (PPP)|
|4.7% (2015 est.)|
GDP per capita
|$10,200 (2010 est.) (PPP)|
GDP by sector
|Agriculture: 4.3%, industry: 21.6%, services: 74% (2009 est.)|
|1.5% (2009 est.)|
Population below poverty line
|5.159 million (Public sector: 78%, Personal sector: 22%) (2009 est.)|
Labor force by occupation
|Agriculture: 20%, industry: 19.4%, services: 60.6% (2005)|
|Unemployment||3.8% (2012 est.)|
|Sugar, petroleum, tobacco, construction, nickel, steel, cement, agricultural machinery, pharmaceuticals|
|Exports||$2.458 billion f.o.b. (2009 est.)|
|sugar, medical products, nickel, tobacco, shellfish, citrus, coffee|
Main export partners
| Canada 17.3%
Spain 5.8% (2012 est.)
|Imports||$8.963 billion f.o.b. (2009 est.)|
|petroleum, food, machinery and equipment, chemicals|
Main import partners
| Venezuela 36.4%
United States 4.2% (2012 est.)
|$19.44 billion (31 December 2009 est.); another $20.8 billion owed to Russia, $0.9 billion owed to Romania and $0.2 billion owed to Hungary|
|Revenues||$35.01 billion (2007 est.)|
|Expenses||$36.73 billion (2007 est.)|
|Economic aid||$87.8 million (2005 est.)|
All values, unless otherwise stated, are in US dollars.
Cuba's economy has a planned economy, dominated by state-run enterprises which means that the Cuban government oversees, though there remains significant foreign investment and personal enterprise in Cuba. Most of the means of production are owned and run by the government, and most of the labor force is employed by the state, although in recent years, the Communist Party has encouraged the formation of cooperatives and self-employment.
In the year 2000, public sector employment was 76% and private sector, mainly composed of personal property, employment was 23% compared to the 1981 ratio of 91% to 8%. Capital investment is restricted and requires approval by the government. The Cuban government sets most prices and rations goods to citizens. In 2009, Cuba ranked 51st out of 182 with an HDI of 0.863; remarkably high considering its GDP per capita only places it 95th. Public services and transportation in Cuba, however, are second-rate compared to more developed counterparts on the mainland. In 2012, the country's public debt was measured at 35.3% of GDP. At the same time, inflation (CDP) was ranked at 5.5%. Furthermore, in the same year, the economy encountered a 3% growth in GDP.
Before Fidel Castro's 1959 revolution, Cuba had an extremely unequal economy, with large capital outflows to foreign investors but the country's economy had grown rapidly in the early part of the century, fueled by the sale of sugar to the United States. The country compared favorably with Spain and Portugal on socioeconomic measures. Furthermore, its income in 1929 was reportedly 41% of the US, thus higher than in some Southern states of the US, such as Mississippi and South Carolina The country has made significant progress towards a more even distribution of income since the Revolution and being placed under 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 has managed to retain high levels of healthcare and education.
Housing and transportation costs are low and Cubans receive free education, health care, and food subsidies. Corruption is common, although allegedly lower than in most other countries in Latin America. In the book, Corruption in Cuba, Sergio Diaz-Briquets and Jorge F. Pérez-López Servando state that Cuba has "institutionalized" corruption and that state-run monopolies, cronyism, and lack of accountability have made Cuba one of the world's most corrupt states".
- 1 History
- 2 Energy production
- 3 Government policies
- 4 Agriculture
- 5 Industry
- 6 Tertiary industries
- 7 Poverty
- 8 International trade
- 9 Foreign investment
- 10 Public facilities
- 11 Connection with Venezuela
- 12 Other statistics
- 13 See also
- 14 References
- 15 External links
Prior to the Cuban Revolution, Cuba was one of the most advanced and successful countries in Latin America. Cuba became an exotic and favorite destination for some of America's wealthiest. They came for bouts of gambling, horse racing, golfing and country-clubbing. American tourism became Cuba's flowing source of revenue. Tourism magazine Cabaret Quarterly described Havana as "a mistress of pleasure, the lush and opulent goddess of delights." According to Cuba historian Louis Perez of the University of North Carolina at Chapel Hill, "Havana was then what Las Vegas has become." 
Cuba had a one-crop economy whose domestic market was constricted. Its population was characterized by chronic unemployment and deep poverty. United States monopolies like Bethlehem Steel Corporation and Speyer gained control over Cuba's national resources from which they made huge profits. The banks and the country's entire financial system, all electric power production and most industry was dominated by US capital.[dubious ] US monopolies owned 25 percent of the best land in Cuba and more than 80 percent of all farm lands were occupied by sugar and livestock-raising large estate 90 percent of the country's raw sugar and tobacco exports was sent to the USA. Before the Revolution most Cuban children were not included in the school system. There was almost no machine-building industry in Cuba. During this period in the 1950s Cuba was as rich per capita as Italy was and richer than Japan.
87 percent of urban homes had electricity, but only 10 percent of rural homes did. Only 15 percent of rural homes had running water. Nearly half the rural population was illiterate as was about 25 percent of the total population. Poverty and unemployment in the rural areas forced desperate residents to migrate to Havana where high levels of crime and prostitution existed. More than 40 percent of the Cuban workforce in 1958 were either underemployed or unemployed. Schools for blacks and mulattoes were vastly inferior to those for whites. Afro-Cubans had the worst living conditions and held the lowest paid jobs.
In 1959, Fidel Castro seized assets valued at 9 Billion American dollars. During the Revolutionary period Cuba was one of the few developing countries to provide foreign aid. Foreign aid began with the construction of six hospitals in Peru in the early 1970s. The value of those businesses today would be worth 1.89 trillion dollars at the 11.42% rate of growth that the average US company has experienced from 1959 to 2014. But Cuba will have a very difficult time repaying the 1.89 trillion seized due to the extremely weak economic performance over the last half century. Cuba's current annual GDP is roughly 1/20th of the current value of what was seized, illustrating in clear terms the different rates of economic growth of the US and Cuban economy.
Foreign aid expanded later in the 1970s to the point where some 8000 Cubans worked in overseas assignments. Cubans built housing, roads, airports, schools, and other facilities in Angola, Ethiopia, Laos, Guinea, Tanzania, and other countries. By the end of 1985, 35,000 Cuban workers had helped build projects in some 20 Asian, African and Latin American countries.
In 1986 Cuba defaulted on its $10.9 billion debt to the Paris Club. In 1987 Cuba stopped paying entirely on the $10.9 billion Paris Club debts. In 2002 Cuba defaulted on $750 million in Japanese debts.
Some have attributed Cuban economic growth to Soviet subsidies. However, comparative economic data from 1989 showed that the amount of Soviet aid was in line with the amount of Western aid to many Latin American countries.
The prostitution of children with lax penalization and human trafficking for profit is reported in Cuba as a source country for the global black market industry.  Cuba has been ranked in the lowest global rating of Tier 3 which is defined for a government's failure to meet minimum standards to prevent trafficking and are not making significant efforts to do so.
The Cuban economy is still recovering from a decline in gross domestic product of at least 35% between 1989 and 1993 due to the loss of 80% of its trading partners[clarification needed] and Soviet subsidies. This loss of subsidies coincided with a collapse in world sugar prices. Sugar had done well from 1985-1990 and crashed precipitously in 1990-1991 and did not recover for five years. Cuba had been insulated from world sugar prices by Soviet price guarantees.
This era was referred to as the "Special Period in Peacetime" later shortened to "Special Period". A Canadian Medical Association Journal paper claimed that "The famine in Cuba during the Special Period was caused by political and economic factors similar to the ones that caused a famine in North Korea in the mid-1990s, on the grounds that both countries were run by authoritarian regimes that denied ordinary people the food to which they were entitled when the public food distribution collapsed, and priority was given to the elite classes and the military." Other reports painted an equally dismal picture, describing Cubans having to resort to eating anything they could find, from Havana Zoo animals to domestic cats. But although the collapse of centrally planned economies in the Soviet Union and other countries of the Eastern bloc meant that Cuba experienced severe economic difficulties, which led to a drop in calories per day from 3052 in 1989 to 2600 in 2006, mortality rates show a remarkably slight impact on public health thanks to the priority given by the government to maintaining a social safety net.
The government undertook several reforms to stem excess liquidity, increase labor incentives, and alleviate serious shortages of food, consumer goods, and services. To alleviate the economic crisis, the government introduced a few market-oriented reforms including opening to tourism, allowing foreign investment, legalizing the U.S. dollar, and authorizing self-employment for some 150 occupations. (This policy was later partially reversed, so that while the U.S. dollar is no longer accepted in businesses, it remains legal for Cubans to hold the currency.) These measures resulted in modest economic growth. The liberalized agricultural markets introduced in October 1994, at which state and private farmers sell above-quota production at free market prices, have broadened legal consumption alternatives and reduced black market prices. Another (less visible) cause of the economic decline was the decrease in the world demand and world price for sugar, gradually replaced by corn syrup, 30% cheaper, after 1985.
Government efforts to lower subsidies to unprofitable enterprises and to shrink the money supply caused the semi-official exchange rate for the Cuban peso to move from a peak of 120 to the dollar in the summer of 1994 to 21 to the dollar by year-end 1999. Living conditions in 1999 remained well below the 1989 level.
Havana announced in 1995 that GDP declined by 35% during 1989-93, the result of lost Soviet aid and domestic inefficiencies. The drop in GDP apparently halted in 1994, when Cuba reported 0.7% growth, followed by increases of 2.5% in 1995 and 7.8% in 1996. Growth slowed again in 1997 and 1998 to 2.5% and 1.2% respectively. One of the key reasons given was the failure to notice that sugar production had become dramatically uneconomic. Reflecting on the Special period Cuban president Fidel Castro later admitted that many mistakes had been made, "The country had many economists and it is not my intention to criticize them, but I would like to ask why we hadn’t discovered earlier that maintaining our levels of sugar production would be impossible. The Soviet Union had collapsed, oil was costing $40 a barrel, sugar prices were at basement levels, so why did we not rationalize the industry?"
Due to the continued growth of tourism, growth began in 1999 with a 6.2% increase in GDP. Growth in recent years has picked up significantly, with a growth in GDP of 11.8% in 2005 according to official Cuban information. In 2007 the Cuban economy grew by 7.5%, below the expected 10%, but higher than the Latin American average rate of growth. Accordingly, the cumulative growth in GDP since 2004 stood at 42.5%. [clarification needed]
Overview on the post-revolution economic performance
Cuban-born US economist Carmelo Mesa-Lago has published an account on the ″Economic and Social Balance of 50 Years of Cuban Revolution″. According to Mesa-Lago, Cuba’s performance has been overwhelmingly negative with regard to the economic indicators. Cuba’s position fell within the region for 87% of those indicators and for the rest of the 13% it remained the same. According to him Cuba ranked third in the region in 1958 in terms of GDP per capita, surpassed only by Venezuela and Uruguay. It had descended to 9th, 11th or 12th place in the region by 2007. At the same time, Cuba's social indicators showed a more positive development.
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In 2011, "The new economic reforms were introduced, effectively creating a new economic system, referred by some as the "New Cuban Economy" Since then, over four hundred thousand 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. People may also purchase licenses to work as a mule driver, palm tree trimmer, well-digger, button covered, and "dandy"—gentleman in traditional elegant white suit and hat. In effect, the economic system now operates much more like a market system, however unlike a true market system, it still maintains nationalized companies for the distribution of all essential amenities (water, power, ...), and other essential services to ensure a healthy population (i.e. free schooling, ...).
Imports are twice exports, and doctors earn £15 per month, so families supplement incomes with extra jobs, and the resultant increased taxes may shore up the economy. In the last decade, half the country's sugar mills have closed down, and tourists can now ride factory steam locomotives. More than 150,000 farmers have signed up to lease land from the government for bonus crops. Before, home-owners were only allowed to swap; now buying and selling has created a real-estate boom. A new Havana fast-food burger pizza restaurant, La Pachanga, started in the owner's home, serves 1,000 meals on a Saturday at £3, the weekly government wage.
In 2008, Raúl Castro's administration hinted that the purchase of computers, DVD players and microwaves would become legal. However, monthly wages remain less than 20 U.S. dollars. Mobile phones, which have been restricted to Cubans working for foreign companies and government officials, have become legalized. The new program could put phones in the hands of hundreds of thousands of Cubans.
In 2010, Fidel Castro, in agreement with Raúl Castro's reformist sentiment, admitted that the Cuban model based on the old Soviet model of centralized planning was no longer sustainable for the Cuban economy. While both leaders remain committed to dialectical materialism, they are encouraging the creation of a co-operative variant of socialism where the state plays a less active role in the economy, and the formation of worker-owned co-operatives and self-employed enterprises is being encouraged.
To remedy Cuba's economic structural distortions and inefficiencies, the government has reformed the Cuban model as the Sixth Congress approved expansion of the internal market and access to global markets on April 18, 2011. They anticipate full implementation by 2015. This is considered an updating of the Cuban socialist model, although is commonly referred to as economic reforms. A comprehensive list compiled through an examination of articles from Carmelo Mesa-Lago, Jorge Dominguez, Omar Perez Villanueva, Vidal Alejandro, Philip Peters and the Economist outlining the main policy guidelines is as follows:
- Budget expenditure adjustments (education, healthcare, sports, culture)
- Change in the structure of employment; reduce inflated payrolls and increase work in the non-state sector.
- Legalizing of 201 different personal business licenses
- Fallow state land in usufruct to leased residents to plow
- Incentives for non-state employment, as a re-launch of self-employed work
- Proposals for creation of non-agricultural cooperatives
- Hiring of labor by self-employed (cuentapropistas)
- Legalization of sale and private ownership of homes and cars as of October 2011
- Greater autonomy for state firms
- Search for food self-sufficiency, gradual elimination of universal rationing and change to targeting poorest population
- Possibility to rent state-run enterprises to self-employed, among them state restaurants
- Separation of state and business functions
- Tax policy update
- Easing travel restrictions for Cubans
- Strategies for external debt restructuring
On December 20, 2011 a new credit policy allowed Cuban banks to finance entrepreneurs and individuals wishing to make major purchases to do home improvements in addition to farmers. "Cuban banks have long provided loans to farm cooperatives, they have offered credit to new recipients of farmland in usufruct since 2008, and in 2011 they began making loans to individuals for business and other purposes", (Peters 2012, 21).
Raul Castro signed law 313 in September 2013 in order to create a special economic zone in the port city of Mariel, the first in the country. While this was also criticised in the general direction of criticism SEZ's have received, it was also a different economic model for the country.
On 22 October 2013 as part of Raul Castro's latest reform they plan to unify the currencies, thereby ending the dual currency system.
As of 2011, 96% of electricity was being produced by burning fossil fuels . Solar panels have been introduced in some of the rural areas to reduce blackouts, brownouts, and use of kerosene . Citizens were encouraged to swap old inefficient lamps with newer models to reduce consumption. A power tariff imposed economically punitive measurements on inefficient use of power.
Rationing in Cuba refers to the system of food distribution known in Cuba as the Libreta de Abastecimiento ("Supplies booklet") with coupon booklets. Despite rumors, as of 2012, ration books at bodegas still supplement families with rice, oil, sugar, and matches, above government average wage £15 monthly. The government also sells licenses for entrepreneurs to increase tax revenue.
After the 1959 Cuban Revolution, citizens were not required to pay a personal income tax (their salaries being regarded as net of any taxes). However, from 1996, the State started to impose income taxes on self-employed Cubans.
Cuba imports up to 80% of the food it rations to the public.  After coming to power, Raúl Castro, Fidel Castro's brother, has ridiculed the bureaucracy that shackles 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 even suffered from starvation during the Special Period.
In total, industrial production accounted for almost 37% of the Cuban GDP, or US$6.9 billion, and employs 24% of the population, or 2,671,440 people, in 1996. A rally in sugar prices since 2009, has stimulated new investment and development of sugar processing.
More recently Cuba's world-class biotechnology and pharmaceutical industry is gaining in its importance to the economy. It has been claimed that soon it will become Cuba's main source of foreign exchange. Among the products sold internationally are vaccines against various viral and bacterial pathogens, and promising anti-cancer vaccines are undergoing exhaustive clinical trials. Some Cuban scientists, like V. Verez-Bencomo, have been awarded international prizes for their contributions in biotechnology and Sugar Cane. Cuban vaccines are sold, among other countries, in Russia, China, India and several Latin American countries. For example, the drug Heberprot-P has been developed as a cure for diabetic foot ulcer and has had success in many Third-World Markets.
Tourism in Cuba
In the mid-1990s tourism surpassed sugar, long the mainstay of the Cuban economy, as the primary source of foreign exchange. Tourism figures prominently in the Cuban Government's plans for development, and a top official cast it as the "heart of the economy". Havana devotes significant resources to building new tourist facilities and renovating historic structures for use in the tourism sector. Cuban officials estimate roughly 1.6 million tourists visited Cuba in 1999 with 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.
The rapid growth of tourism has had widespread social and economic repercussions in Cuba. This has led to speculation of the emergence of a two-tier economy and the fostering of a state of tourist apartheid on the island. This situation was exacerbated by the influx of dollars into the Cuban economy during the 1990s, potentially creating a dual economy based on the dollar (the currency of tourists) on the one hand, and the peso on the other. Scarce imported goods - and even some of local manufacture, such as rum and coffee- could be had at dollars-only stores, but were hard to find or unavailable at peso prices. As a result, Cubans who earned only in the peso economy, outside the tourist sector, were at an economic disadvantage. Those with dollar incomes based upon the service industry began to live more comfortably. This widened the gulf between Cubans' material standards of living, in conflict with the Cuban Government's long term socialist policies.
Cuba has a very poorly developed retail sector. There are a few large shopping centers in Havana (Sept. 2012) but the prices are the same as in the USA. The commercial districts that existed before the revolution are largely shut down. Those that remain carry few and poorly made products that are priced in dollars and are too expensive for the average Cuban to purchase. The majority of the stores are small dollar stores, bodegas, agro-mercados (farmers' markets) and street stands.
Typical wages range from 400 non-convertible Cuban pesos a month, for a factory worker, to 700 per month for a doctor, or a range of around 17-30 U.S. dollars per month. However, the Human Development Index of Cuba still ranks much higher than the vast majority of Latin American nations. After Cuba lost subsidies in 1991, malnutrition resulted in an outbreak of diseases and general hunger. Despite this, the poverty level reported by the government is one of the lowest in the developing world, ranking 6th out of 108 countries, 4th in Latin America, and 48th among all countries. Pensions are among the smallest in the Americas at $9.50. In 2009, Raúl Castro increased minimum pensions by 2 dollars, which he said was to recompense for those who have "dedicated a great part of their lives to working... and who remain firm in defense of socialism".
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. (for example, British West Indies, United States Virgin Islands, French outer-territories, and so on). Cuba's primary import partner is Venezuela. The second largest trade partner is Canada, with a 22% share of the Cuban export market.
Since the Special Period, Cuba has actively courted foreign investment. All would be foreign investors are required to form joint ventures with the Cuban government. The sole exception to this rule are Venezuelans, who are allowed to hold 100% ownership in businesses due to an economic agreement between Cuba and Venezuela. Cuban officials said in early 1998 that there were a total of 332 joint ventures. Many of these are loans or contracts for management, supplies, or services normally not considered equity investment in Western economies. Investors are constrained by the U.S.-Cuban Liberty and Democratic Solidarity Act which provides sanctions for those who "traffic" in property expropriated from U.S. citizens.
In 1994 the Cuban Government made it legal for its people to possess and use the U.S. dollar. From then until 2004, the dollar became a major currency. To capture the hard currency flowing into the island through tourism and remittances - estimated at $500–800 million annually - the government set up state-run "dollar stores" throughout Cuba that sold 'luxury' food, household, and clothing items, compared with basic necessities, which were bought using the Cuban peso. As such, a gap in the standard of living developed between those with access to dollars and those without. Jobs that could earn dollar salaries or tips from foreign businesses and tourists became highly desirable. It was common to meet doctors, engineers, scientists, and other professionals working in restaurants or as taxicab drivers.
However, in response to stricter economic sanctions by the US, and because the authorities were pleased with Cuba's economic recovery, the Cuban government decided in October 2004 to remove the American dollar from circulation. In its place, the Cuban convertible peso is now used, which although not internationally traded, has a value pegged to that of the dollar. As a source of additional revenue, a 10% surcharge is levied for conversions from US dollars to the convertible peso; this surcharge does not apply to other currencies, so it acts as an encouragement for tourists to bring currencies like Euros, pounds sterling or Canadian dollars into Cuba. Indeed, an increasing number of tourist zones now also accept Euros.
Owners of small private restaurants (paladares) can seat no more than 12 people and can only employ family members to help with the work. Set monthly fees must be paid regardless of income earned and frequent inspections yield stiff fines when any of the many self-employment regulations are violated.
As of 2012, >150K farmers have signed up to lease land from the government for bonus crops. Before, home-owners were only allowed to swap; now buying and selling has created a real-estate boom. A new Havana fast-food burger pizza restaurant, La Pachanga, started in the owner's home, serves 1K meals on a Saturday at £3, the weekly government wage.
In cities, "urban agriculture" uses small parcels of land. Growing organopónicos (organic gardens) in the private sector has been attractive to city dwelling small producers who get to sell their products in the same place where they produce them, avoiding taxes and enjoying a measure of government help from the Ministry of Agriculture (MINAGRI) in the form of seed houses and advisers.
- La Bodega – For Cuban nationals only. Redeems coupons for rice, sugar, oil, matches, and sells other foodstuffs including rum.
- La Copelia – A government-owned facility offering ice cream, juice, and sweets.
- Paladar – A type of small, privately owned restaurant facility with no more than 12 seats.
- La Farmacia – Low-priced medicine, with the lowest costs anywhere in the world.
- Etecsa – National telephone service provider.
- La Feria – A weekly market (Sunday market-type) owned by the government.
- Cervecería Bucanero – A beverage manufacturer, providing both alcoholic and non-alcoholic beverages.
- Ciego Montero – The main soft-drink and beverage distributor.
Connection with Venezuela
The relationship cultivated between Cuba and Venezuela in recent years has resulted in agreements in which Venezuela provides cheap oil in exchange for Cuban "missions" of doctors to bolster the Venezuelan health care system. Cuba, with the second-highest per capita number of physicians in the world (behind Italy), sends tens of thousands of doctors to other countries as aid, as well as to obtain favorable economic terms of trade. In nominal terms, the Venezuelan subsidy is higher than whatever subsidy the Soviet Union gave to Cuba, with the Cuban state receiving very cheap oil and the Cuban economy receiving around $6 billion in total annually. According to Carmelo Mesa-Lago, a Cuban-born US economist. "If this help stops, industry is paralysed, transportation is paralysed and you'll see the effects in everything from electricity to sugar mills," he said.
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In a 2007 estimate, Cuba produces 16.89 billion kWh and consumes 13.93 billion kWh with no kWh of exports or imports. In a 1998 estimate, 89.52% of its energy production is fossil fuel, 0.65% is hydroelectric, 0% is nuclear, and 9.83% is other production. In both 2007 and 2008 estimates, the country produces 62,100 bbl/d of oil and consumes 176,000 bbl/d with 0 bbl/d of exports and 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.
The country, in a 2008 estimate, produces and consumes 400 million cu m of natural gas, with no cu m of exports or imports and 70.79 billion cu m of provided reserves. In terms of agriculture, Cuba produces sugarcane, tobacco, citrus, coffee, rice, potatoes, beans, and livestock. As of 2009, Cuba has $47.08 billion in revenues and $50.34 billion in expenditures with 34.6% of GDP in public debt, an account balance of $513 million, and $4.647 billion in reserves of foreign exchange and gold.
Cuba’s economic freedom score is 28.7, making its economy one of the world’s least free. Its overall score is 0.2 point higher than last year, with deteriorations in trade freedom, fiscal freedom, monetary freedom, and freedom from corruption counterbalanced by an improvement in business freedom. Cuba is ranked least free of 29 countries in the South and Central America/Caribbean region, and its overall score is significantly lower than the regional average. Over the 20-year history of the Index, Cuba’s economic freedom has been stagnant near the bottom of the “repressed” category. Its overall score improvement has been less than 1 point over the past two decades, with score gains in fiscal freedom and freedom from corruption offset by double-digit declines in business freedom and investment freedom. Despite some progress in restructuring the state sector since 2010, the private sector remains constrained by heavy regulations and tight state controls. Open-market policies are not in place to spur growth in trade and investment, and the lack of competition continues to stifle dynamic economic expansion. A watered-down reform package endorsed by the Cuban Communist Party has trimmed the number of state workers and expanded the list of approved professions, but many details of the reform remain obscure.
The top individual income tax rate is 50 percent. The top corporate tax rate is 30 percent (35 percent for wholly foreign-owned companies). Other taxes include a tax on property transfers and a sales tax. The overall tax burden is 24.4 percent of GDP. Government spending is around 67 percent of GDP, and public debt is around 35 percent of the domestic economy. Despite reforms, the government continues to play a large role in the economy.
Cuba’s average tariff rate is 10 percent. The country’s planned economy deters foreign trade and investment. The financial sector remains heavily regulated, and access to credit for entrepreneurial activity is seriously impeded by the shallowness of the financial market. The state maintains strict capital and exchange controls.
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- Cuba's Economic Struggles from the Dean Peter Krogh Foreign Affairs Digital Archives
- The Road not taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective, Marianne Ward (Loyola College) and John Devereux (Queens College CUNY)
- ARCHIBOLD, RANDAL. Inequality Becomes More Visible in Cuba as the Economy Shifts (February 2015), The New York Times
- Cave, Danien. Raúl Castro Thanks U.S., but Reaffirms Communist Rule in Cuba (December 2014), The New York Times. "Mr. Castro prioritized economics. He acknowledged that Cuban state workers needed better salaries and said Cuba would accelerate economic changes in the coming year, including an end to its dual-currency system. But he said the changes needed to be gradual to create a system of “prosperous and sustainable communism.”"
- Centro de Estudios de la Economía Cubana