After more than 50 years of Cold War hostility, Washington and Havana began normalizing diplomatic ties this week. And while relations between the U.S. and Cuba may be thawing, there's still a lot about Cuba that most Americans don't know, especially regarding how the average Cuban works and lives. Here are some economic data points:
Earlier this year the Pew Research Center quoted official Cuban data saying the nation's GDP in 2013 was 77.2 billion Cuban pesos. Depending on what exchange rate you use, that could be anywhere from $77.2 billion U.S. (that's the official 1 peso = $1 U.S. rate) to $3.2 billion (using the internal rate of 24 regular pesos to 1 convertible peso).
But no matter how you count it, according to Pew, Cuba's economic growth has "slowed dramatically" over the past 15 or so years, following the end of the Cold War and the collapse of the Soviet Union, Havana's main economic benefactor.
Overseas tourism is a major source of revenue in Cuba, contributing nearly 10 percent to the island's GDP last year. A further loosening of relations between Washington and Havana could eventually reestablish Cuba as a prime vacation spot for Americans, boosting those tourism and GDP numbers. Cuba also gets overseas remittances from families and friends in the U.S., which were estimated at $3 billion last year.
The CIA World Factbook says 99.8 percent of the island's population over age of 15 can read and write. That compares to 96.4 percent in China and 99.7 percent in Russia. Some 30 million Americans, or 14 percent of the population, fall below basic literacy skills, according to recent National Center for Education Statistics data.
Cuba's biggest trading partners are Venezuela, the European Union (EU), China and Brazil. According to EU data, Cuba's major exports are refined fuel, sugar, tobacco, nickel and pharmaceuticals, while it imports large quantities of machinery, food and fuel. Havana also has a barter arrangement with Venezuela, in which Cuba gets Venezuelan oil in exchange for Cuban personnel. It has similar barter programs with Brazil and China.
Havana recently opened a "special economic zone" and shipping container terminal in the port of Mariel, but so far only five foreign companies -- two from Mexico, two from Belgium and one from Spain -- are allowed to operate there.
Despite decades of official embargo, the U.S. does indeed trade with Cuba, due to a modification made to the embargo back in 2000 that allows Cubans to make cash purchases of American medicines, medical devices and agricultural products. Pew reports the U.S. exported close to $300 million in products to Cuba last year, nearly all of that in foodstuffs.
International economic relations
The Brookings Institution says Russian President Vladimir Putin recently forgave $32 billion in Cuban debt dating back to Soviet times, and that Cuba still receives nearly 100,000 barrels of oil daily from its ally, Venezuela. The Cubans re-export some of that Venezuelan oil, and according to FiveThirtyEight.com it made $765 million from that crude last year. But falling oil prices on the global market are eating into that revenue, and with Venezuela's economy teetering on default, the future of those oil donations are uncertain.
Some U.S. companies are already making economic inroads in Cuba. Earlier this year Netflix (NFLX) announced it was offering its video subscription services to Cuban consumers, as Internet access in the country improves "and credit and debit cards become more widely available." That being said, less than 5 percent of Cubans are estimated to have Internet access.
The official, aggregated, gross per capita income in Cuba, according to Brookings Institution, is just over $5,500. But it also notes the average monthly take-home salary of most Cubans is around $20. Brookings analyst Richard Feinberg said that while little data is available regarding the average Cuban's income, indicators suggest that 40 percent of the nation's workforce falls into a "broadly defined" middle class, although consumer consumption rates remain low due to low government wages.
Cuba's health care system is considered world-class and is also a source of income for the government. Last year, the British medical journal The Lancet reported on Cuba's "medical diplomacy," with 40,000 Cuban doctors working around the world, many as part of energy and trade deals with Venezuela, Brazil and other nations.
Brazil, for example, pays $4,250 per month for Cuban doctors, with 90 percent of those funds going to the Cuban government. One analyst told The Lancet the Cuban doctors see their relatively small Brazilian paychecks "as a big salary, they can save money, buy consumer goods to sell, and they earn privileges at home."
Brookings also said following President Raúl Castro's economic reform program, which attempts to "preserve socialism while introducing new forms of market-based mechanisms," 90 percent of Cubans now own their homes. Cubans can also set up their own small businesses, form their own agricultural cooperatives and have cell phones.
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