Economic trends
The Cuban economy continues to suffer from the consequences of the collapse of the Soviet bloc in 1991, as well as from the trade boycott imposed by the United States. In addition, despite its isolation, Cuba (already weakened by the passing of the hurricanes) was strongly affected by the global economic crisis due to the reduction in tourism revenues and the drop in the nickel price. The country saw its financial situation deteriorate and had to face difficulties due to a lack of solvency and liquid assets. Estimated at 1.4% in 2009, its growth has also remained under 2% in 2010.
Despite the hopes raised by the retirement of Fidel Castro in 2006, the situation in Cuba has hardly evolved. The state control over the economy and the persistent restraints on free trade constitute severe obstacles to the commercial and economic development of Cuba. The country has a significant budgetary deficit (3.8%) and it is paralyzed by structural problems. The president, Raul Castro, has reaffirmed his intentions of modernizing the Cuban economy model by a series of measures: the introduction of more discipline on budget management; give priority to investments that can generate foreign currency; reform the banking system to control credits; suppress the subventions; unify the currency that circulates in the country (Cuban Peso and convertible Peso); close non-profitable public companies; favor private companies; and develop exports.
In spite of a low unemployment rate (1.7% in 2009) the living standards of the Cuban population remains always very low, it is today, lower than the living standards of the 1990s.
Main branches of industry
The main sector of activity in Cuba is the services sector which represents almost three fourths of the GDP and employs 60% of the active population. The importance of this sector is strongly related to the development of tourism.
Industry represents about a fourth of the GDP and employs 20% of the population. It is concentrated in agricultural products and the production of cement and agricultural machinery. Cuba also has significant mining resources. The export of nickel represents the main source of income into the country. Cuba also has other minerals such as gold and copper and is conducting prospective activities concerning hydrocarbon.
Agriculture represents about 4% of the GDP and employs 20% of the population. Its main productions are sugar and sugar cane (12.5 billion tons of sugar cane are produced every year), they take one third of the cultivated land. This sector suffered heavily from the hurricanes that hit the island in 2008.
International trade
The embargo upheld by the United States has restricted Cuba's foreign trade. The European Union represents about half of the country's foreign trade. Cuba's three main export partners are: China, Canada and Spain. The island mainly exports sugar, nickel, tobacco, medicines and fishing products. The country's top three suppliers are Venezuela, China and Spain. Cuba mainly imports mineral fuels and oil, machinery, electric & electronic equipment, cereals, and vehicles. The balance of commodities in Cuba is structurally in deficit, but the income produced by the export of services (mainly into Venezuela) has allowed the country to have a positive trade balance.
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Last updates: January 2012
