Castro's Economic Woes

Sunday, December 29, 2013
An excerpt from Vicente Morin Aguado's "Raul Castro's Questionable Optimism" in The Havana Times:

The essential economic data addressed [by Raul Castro at last week's National Assembly] was the following:

- During 2013, the Cuban economy grew by 2.7%, as opposed to the 3.6% predicted.

- In 2014, the economy is expected to grow by only 2.2 %

- Such unimpressive figures, we are told again, are primarily owed to a drop in hard currency export revenues, particularly to the deficit in tourism revenues.

- Another negative element is the expected drop, next year, of the prices of sugar and nickel, two of Cuba’s major exports.

I want to focus on a number of considerations surrounding these predictions before commenting on Raul Castro’s remarks.

For average Cubans, a yearly growth of 2% is tantamount to nothing or next to nothing, which might not be the same thing but is close enough. The two-currency system, coupled with the arbitrary prices that characterize the country’s State accounting system, make the figures quoted even more dubious.