Cuba — Economic Challenges

For the blog today, I thought I would incorporate some of the student reflections about one of our first speakers.  We had a terrific briefing on the economy from Guilio Ricci, an economics professor at the University of Havana.

From Max Rabkin:

Spending a week in Havana was an eye-opening experience for many reasons. I expected good food, friendly people and time-capsule-like architecture, and was not disappointed with any of those. However, I was most intrigued with how the country and the Castro government was handling the introduction of market reforms and resuming diplomatic relations with the United States.

Most fascinating was the talk with the economist from the University of Havana. I went into the trip expecting a heavy dose of Marxist-Leninist thought to permeate every discussion the group had, and although this was generally true, the economic lecture ended up being one of the fairest and provided the most realistic outlook for the Cuban economy and future enterprise prospects for the public.  What I found most interesting about the lecture was the fact that by 2030, 30% of the Cuban population was expected to be over the age of 65 and at retirement age. Additionally, I was unaware that the country had been exporting significantly less sugar than in previous years, and fully expected tourism to become their main industry going forward. The economist was rather candid with his observations that this combination of factors would likely result in some serious future difficulties for the Cuban economy. I honestly expected him to sugar-coat the difficulties more than he did, but he was quite frank with his concerns, and ended up being a pleasant surprise.

I also was really interested in how the country will merge that which it is really strong at — health care and education — with growing the GDP — which is very weak.   Cuba’s GDP is very low compared to other countries in the region while its level of education is very high. And the way to grow the economy, with such a smart labor force, is to open it more and more to the private sector where education and hard work will be rewarded.  And, as the economist noted, “while the CEO of a company should not earn the same as a worker, neither should the CEO be receiving 200 times the worker’s salary.”  This will be one of the greatest challenges for Cuba moving forward — balancing the best of capitalism while trying to avoid the evils.

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