Cuba: Figuring Out Pieces of the Puzzle

Cuba is an unusual country for quite a few reasons:

  • The United States has had an embargo against Cuba since 1960, but there has recently been an announcement that the US will begin to normalize diplomatic relations.
  • The leader of Cuba between 1959 and 2008 was Fidel Castro. Fidel Castro is a controversial figure, with some viewing him is a dictator who nationalized property of foreign citizens without compensation. Citizens of Cuba seem to view him as more of as a Robin Hood figure, who helped the poor by bringing healthcare and education to all, equalizing wages, and building many concrete block homes for people who had only lived in huts previously.
  • If we compare Cuba to its nearest neighbors Haiti and Dominican Republic (both of which were also former sugar growing colonies of European countries), we find that Cuba is doing substantially better than the other two. In per capita CPI in Purchasing Parity Power equivalent, in 2011, Cuba’s average was $18,796, while Haiti’s was $1,578, and the Dominican Republic was $11,263. In terms of the Human Development Index (which measures such things as life expectancy and literacy), in 2013, Cuba received a rating of .815, which is considered “very high”. Dominican Republic received a rating of .700, which is considered “High.” Haiti received a rating of .471, which is considered “Low.”
  • Cuba is known for its permaculture programs (a form of organic gardening), which helped increase Cuba’s production of fruit and vegetables in the 1990s and early 2000s.
  • In spite of all of these apparently good outcomes of Cuba’s experimentation with equal sharing of wealth, in recent years Cuba seems to be moving away from the planned economy model, and much more of a “mixed economy,” with more entrepreneurship encouraged by individuals.
  • Since 1993, Cuba has had a two currency system. The goods that the common people could buy were in one set of stores, and were traded in one currency. Other goods were internationally traded, or were available to foreigners visiting Cuba. They traded in another currency. This system is being phased out. Goods are now being marked in both currencies and limitations on where Cubans can shop are being removed.

(OOPS! This was published before I intended it to be. I will update it in the near future.)

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About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.

36 thoughts on “Cuba: Figuring Out Pieces of the Puzzle

  1. The problem I see for Cuba going forward is that Cuba for the most part was self reliant even if it was poor by Western standards. All that will change with thawing relations with the West. It will see a spike in investments which will initially raise the standard of living for the poor. The trade off will be that they will become less self reliant and more reliant on the failed Western system which is failing apart.

    • If you read my new post, you will see that Cuba has not, in fact, been self-reliant. It has been digging itself into a bigger and bigger hole, by importing nearly everything (including part of its food), and exporting not much at all. It hasn’t been using debt to finance the building of new homes and some other things we would finance, but it still has been digging itself into a big hole.

    • Diminishing returns, and the resulting higher cost of water, however it “produced” and “distributed” is a problem that a lot of people don’t understand. Even if we could “fix” the California water problem with a large number of desalination plants and new pipelines, wages of California workers wouldn’t increase, because (except for the temporary building of the new infrastructure), there is really nothing new being added–we are just handling depletion in an expensive way that tends to shrink the rest of the economy. The outcome is likely to be a problem in repaying debt with interest.

  2. Oh and the US will soon be looking to Cuba for answer re: self sustaining populations. T-Rex will soon be stomping on everything and anything that moves.

    California 40 million
    Texas 27 million

    food, energy, water crisis, social, economic, financial chaos.

    • You haven’t seen anything yet. South Dakota is under extreme drought conditions too!
      That’s another major food producing area…food prices will skyrocket next year.

    • I agree. People can’t live where there is no water. It will lead to people leaving the state, and a reduction in real estate values.

  3. All that about Permaculture in Cuba is rubbish, as all the Cubans who had to work in that know.
    Cuba never stopped consuming oil, they had to pay for it, they used to get it for free from the Soviet Union. In effect the hardworking Russians were sustaining the very lazy Cubans (I am Spanish, by the way, I know Cuba and the Cubans very well, Spain is full of Cuban exiles / immigrants, most Cubans or millions of them can get Spanish citizenship easily, for several reasons).
    The Cubans, as we say laughing after going there on holiday, have discovered how to live without working !
    Those figures about Cubans being better off than the Dominicans are simply not true, better Cuba than Haiti yes, the whole world is better than Haiti -a country that has had the dubious advantage of being occupied several times by the USA.

    As to Cuba now going to be the playground of the West, you Americans show the total ignorance you have of the world. Cuba IS the playground of Europe, and millions of Europeans go there on holiday, lots of Spanish businessmen sell foodstuffs, spirits and wine for example to the hotels that cater for the tourists, and yes there’s a sharp trade in that, many Cubans supplement their meagre salaries with clever semi-legal practices.

    Speaking of the sex trade, which is a feature of Cuban life, the complaint of the jineteras (=girl riders) is that the Americans who went there before 1958 paid a lot better than the miserable Europeans now ! So yes, they will receive the men from Yuma with arms, ahem, open.
    (Yuma is their nickname for the USA, from a very famous western movie)
    Ah, the Cubans can not go to the beaches -a Cuban girl friend told me that, they are reserved for the tourists -it is not a democratic country you know.
    Which was good, as the repulsive capitalists would not contaminate the decent Cuban people with their way of life, and the eager young Cuban girls would not propose to every man they could see to marry her and take her away.

    Let’s talk about the Cuban market in partners. It is very frequent that Spanish men somewhat we could say, undesirable from a female’s point of view, ugly, old say, fat, clumsy, would go to Cuba and get a good young woman, marry her -a Spaniard of course always does the right thing, and anyway the woman can not leave the island without the Spanish passport from the man.
    I must say that the woman would keep her side of the bargain, well, at least for a year or two, then look for a better deal, divorce. This one my girlfriend I said before … but it would be too personal !

    And now we get to the Cuban men. The Spanish women do the same thing ! There’s equality of gender in Spain, you see. Those Spanish women who are not any longer in the marriage market but have a bit of money, either a bit old, divorced, or not so beautiful, thunder tights -jamonas- well, they go to Cuba and meet an artist or poet -Cuba is full of them, usually black men, tall, young, slender, strong, fun, a good dancer, with big white teeth, and, ah, big, ah, ah feet ! They marry the fellow and take him home to Spain. It may happen that the woman later may sport a black eye, because, eh, Cuban husbands, they have their ways, work is not their strong point, you see. I suppose that other Europeans do the same, I know that some Spanish men and women do it.

    It increases the happiness in the world, nothing wrong with it.

    I suggest that you browse the website Generación Y kept by Yoani Sánchez, a Cuban democratic opposition journalist [well known in Spain] who has suffered persecution and discrimination from the dictatorship and some of the mistaken ideas you have about the Special Period, how very well the Cubans are doing, the great Health Care in Cuba -rubbish, Communist propaganda that, the Spanish when they go there on holiday take even aspirins with them, not only that, in the Pharmacies in Spain there are boxes where you can put unused medicines and serve yourself, fill a suitcase with them and take it to Cuba, they don’t have any medicines. Ah, champion from Yuma, if you go to Cuba take a white doctor’s smock with you and give it to any clinic, they don’t have any.

    • Thanks for your insider’s view. I don’t really disagree with you.

      The “equal pay for everyone” approach is perfect for loafers. No one gets fired, no matter how little they do. There is no point in getting an advanced degree, because those who do get exactly as much pay as someone who dropped out of school and does virtually nothing. You really can’t run an economy with this approach–it doesn’t work. A self-organized capitalistic approach works much better, and at least encourages achievement.

      Marriage is something else that isn’t very stable under this system. We were told that in Cuba, new husbands tend to move in with the woman’s family, because of the lack of housing. The wife doesn’t really need the husband–the state will take care of her and her children. She can kick him out, or he can move on to a new partner, whenever he pleases.

      Marriage also is helpful for people wishing to leave the island, or wanting to import capital into the island. Our tour leader who is a US citizen told us that he had received three marriage proposals from Cuban women in the last year. The danger in accepting any of them and moving to Cuba is that they likely would take your money, and kick you out in a year or so. The Cuban law gives no recourse to non-Cuban citizens for this. He didn’t really talk about the reverse–moving to the United States. I can imagine the new wife moving on to new younger, better looking partner as soon as US citizenship had been obtained.

    • Thanks for the true confessions Armando. I had a socialist friend at work that visited your home many times back in the 1990’s here in the USA and flew via Canada.
      Yes, can’t wait for the Yuma’s open up the cruise ship trip to Havana from Florida.
      Hope you make it here with a one way ticket.

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