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Cuba Economy

    Economy—overview: The state plays the primary role in the economy and controls practically all foreign trade. The government has undertaken several reforms in recent years to stem excess liquidity, increase labor incentives, and alleviate serious shortages of food, consumer goods, and services. The liberalized agricultural markets introduced in October 1994, at which state and private farmers sell above-quota production at unrestricted prices, have broadened legal consumption alternatives and reduced black market prices. 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 yearend 1998. New taxes introduced in 1996 helped drive down the number of self-employed workers from 208,000 in January 1996 to 155,000 by July 1998. 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. Export earnings declined 22% in 1998, to $1.4 billion, the result of lower sugar export volume and lower world prices for nickel and sugar. Import expenditures also fell 15% to $3.0 billion, in part due to lower world oil prices. Tourism and remittances play a key role in foreign currency earnings. Living standards for the average Cuban remain at a depressed level compared with 1990.

    GDP: purchasing power parity—$17.3 billion (1998 est.)

    GDP—real growth rate: 1.2% (1998 est.)

    GDP—per capita: purchasing power parity—$1,560 (1998 est.)

    GDP—composition by sector:
    agriculture: 7.4%
    industry: 36.5%
    services: 56.1% (1997 est.)

    Population below poverty line: NA%

    Household income or consumption by percentage share:
    lowest 10%: NA%
    highest 10%: NA%

    Inflation rate (consumer prices): NA%

    Labor force: 4.5 million economically active population (1996 est.)
    note: state sector 76%, non-state sector 24% (1996 est.)

    Labor force—by occupation: services and government 30%, industry 22%, agriculture 20%, commerce 11%, construction 10%, transportation and communications 7% (June 1990)

    Unemployment rate: 6.8% (1997 est.)

    Budget:
    revenues: $12.3 billion
    expenditures: $13 billion , including capital expenditures of $NA (1998 est.)

    Industries: sugar, petroleum, food, tobacco, textiles, chemicals, paper and wood products, metals (particularly nickel), cement, fertilizers, consumer goods, agricultural machinery

    Industrial production growth rate: 6% (1995 est.)

    Electricity—production: 14.1 billion kWh (1997)

    Electricity—production by source:
    fossil fuel: 98.96%
    hydro: 1.04%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 14.1 billion kWh (1997)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 0 kWh (1996)

    Agriculture—products: sugarcane, tobacco, citrus, coffee, rice, potatoes, beans; livestock

    Exports: $1.4 billion (f.o.b., 1998 est.)

    Exports—commodities: sugar, nickel, tobacco, shellfish, medical products, citrus, coffee

    Exports—partners: Russia 27%, Canada 18%, Spain 8% (1998 est.)

    Imports: $3 billion (c.i.f., 1998 est.)

    Imports—commodities: petroleum, food, machinery, chemicals

    Imports—partners: Spain 17%, France 9%, Canada 9% (1998 est.)

    Debt—external: $10.1 billion (convertible currency, 1997); another $20 billion owed to Russia (1997)

    Economic aid—recipient: $46 million (1997 est.)

    Currency: 1 Cuban peso (Cu$) = 100 centavos

    Exchange rates: Cuban pesos (Cu$) per US$1—1.0000 (nonconvertible, official rate, linked to the US dollar)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)