Economic life in Cuba

the Caribbean near Cienfuegos

The country side is beautiful and green.  Flying in, we could see miles of fields, some not tilled.  This used to be an area of sugar cane plantations and sugar refining factories.  But, no more.  There is very little sugar cane, so the huge plantations are now either fallow or broken up into cooperative farms growing tobacco, bananas, corn, other grains, melons, root crops and other vegetables.  Cattle and goats graze on some of the fallow land. 

decaying sugar warehouses in Rafael Freyre

About 2 years ago, recognizing that the island was not producing enough food to feed itself, the government allowed farmers to have plots of “private” land—land a family could farm for its own benefit, but not own.  The leases run for 10 years and everyone wonders what will happen at the end of the 10 year period.  Will the families be able to continue farming their land?  A portion of the harvest must be sold to the government at fixed prices.  The rest can be sold in the markets at a higher price with the farming family keeping those proceeds.  This has increased production.  While these farmers' markets have fresher and more abundant food, few people can afford to use them on a regular basis, if at all.

home in Vinales Valley west of Havana

The fall of the Soviet Union, the sugar daddy of Cuba for decades, is referred to as “the crisis”.  That’s when the huge subsidies the Soviet Union provided to its client state 90 miles from the U.S. stopped and the Cuban economy went into near collapse.  Today, there is a little more opportunity for private enterprise, as in restaurants in family homes called “paladars”, the “private” farms, many tiny shops and carts that are private family businesses, and rooms for rent in family homes.  But, not much else.  Cuba is very dependent on Venezuela for its electricity since most power is generated by oil-fired power plants.  There is a small amount of wind and hydro-electric energy.  Now that Venezuela is, itself, on the economic ropes, this huge subsidy is at great risk.  I’m sure that’s one primary reason Cuba wanted to open up to the U.S.

Cuba has always had a good medical education and bio-tech research industry.  In fact, one company whose board I served on, testing a cancer drug, had just negotiated with Cuba to do much of its research and testing when it became clear the drug didn’t work.  But, Cuba continues to have very good education in the areas of medicine, chemistry and other sciences.  This is at risk, however, since many professors have gone overseas to teach, while many others have moved to the tourist industry, where they can earn tips.

tobacco field

One big downside of the crisis is the need to bring in more foreign exchange.  As a result, Cuba has contracted to send many of its doctors overseas to earn money for the country.  The doctors get paid more than they do in Cuba, but the foreign host country’s payments go to the Cuban government which then pays the doctors.  One person told us a family member who is a physician is working in South America, earning $260 per month--much more than in Cuba--and living in one room with two other doctors.  That country, he told us, is paying the Cuban government $7000 for her services.

While the free Cuban health care system was once very good, it is now less available, with lower quality, for the average Cuban.  All health care is through public clinics and hospitals.  These now have fewer doctors because so many are working overseas.

row of vintage cars in Holguin 

Likewise with the Cuban education system.  The professors of yesteryear, many of whom were educated abroad and had global experience, have now retired and been replaced by their students who have a lesser level of experience in the world.  So, the level of education has been somewhat diminished.   Plus, many of the educators and professionals have left for the U.S. and other countries where they can make more money.

woman playing with her dog outside her home