HAVANA (capital) 2.137 million (2015)
- Conventional long form
- Republic of Cuba
- Conventional short form
- Local long form
- Republica de Cuba
- Local short form
- Geographic coordinates
- 23 07 N, 82 21 W
- Time difference
- UTC-5 (same time as Washington, DC, during Standard Time)
- Daylight saving time
- +1hr, begins second Sunday in March; ends first Sunday in November; note - Cuba has been known to alter the schedule of DST on short notice in an attempt to conserve electricity for lighting
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
The government continues to balance the need for loosening its socialist economic system against a desire for firm political control. In April 2011, the government held the first Cuban Communist Party Congress in almost 13 years, during which leaders approved a plan for wide-ranging economic changes. Since then, the government has slowly and incrementally implemented limited economic reforms, including allowing Cubans to buy electronic appliances and cell phones, stay in hotels, and buy and sell used cars. The government has cut state sector jobs as part of the reform process, and it has opened up some retail services to "self-employment," leading to the rise of so-called "cuentapropistas" or entrepreneurs. Approximately 476,000 Cuban workers are currently registered as self-employed.
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 12,591,200,000
- Exports of goods and services
- US$ 14,941,000,000
- Total Merchandise Trade
- FDI, net inflows
- US$ 110,000,000
- Commercial Service Exports
sugar, tobacco, citrus, coffee, rice, potatoes, beans; livestock
petroleum, nickel, cobalt, pharmaceuticals, tobacco, construction, steel, cement, agricultural machinery, sugar
- petroleum, nickel, medical products, sugar, tobacco, fish, citrus, coffee
- Canada 17.7%, Venezuela 13.8%, China 13%, Netherlands 6.4%, Spain 5.4%, Belize 4.7% (2015)
- petroleum, food, machinery and equipment, chemicals
- China 21.3%, Venezuela 17.7%, Spain 12.1%, Brazil 5.8%, Canada 4.4%, Italy 4.2%, Mexico 4% (2015)
- Country Risk Rating
- The highest-risk political and economic situation and the most difficult business environment. Corporate default is likely.
- Business Climate Rating
- The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.
- Restoration of U.S.-Cuban relations
- High-quality medical sector
- Tourism and mining (nickel, cobalt) sectors and agricultural potential (sugar, tobacco)
- Skilled and low-cost workforce
- Relatively satisfactory social indicators
- Low crime rate and good control of corruption
- Vulnerability to external factors (climate, raw material prices, Venezuelan aid)
- Low levels of investment and infrastructure weaknesses
- Rationed economy, price controls, black market
- Low productivity of public and agriculture sectors
Cuba into recession in 2016 mainly due to a slowdown in foreign trade: Reduced exports of goods reflecting the decline in raw material prices, for nickel, sugar and oil in particular. Exports of oil derivatives (approximately 50% of exports) suffered both as a result of lower prices and volumes exported, following the reduction in oil shipments from Venezuela: Cuba re-exports some of the refined products obtained from the Venezuelan crude oil, acquired at an extremely competitive price, with the revenue from the reselling used to boost the country’s currency reserves. In 2017, foreign trade is likely to suffer as a result of reduced oil shipments because of the rapidly worsening economic situation in Venezuela. This could also impact on Cuba’s ability to respond to its own domestic demand. The Cuban government could therefore extend the energy rationing introduced in 2016 to counter energy shortages and thus dampen growth within the emerging non-state sector of SMEs, and private investment within the tourist industry (a high energy use sector). The existing tourism infrastructure should nevertheless benefit from increase tourist numbers, mainly North American, thanks to the relaxation of some US sanctions. Household consumption is likely to feel the positive knock-ons from the tourist sector, with increased employment and an increase in remittances from workers abroad, mainly located in the United States. Inflation is expected to remain within the average of recent years, at around 5% given that most prices and wages are controlled by the State.
Government finances should improve as a result of the gradual implementation of structural economic reforms. These reforms are aimed in particular at reducing the dominance of the State in favor of the private sector. The State remains the country’s biggest employer: Almost 70% of the active population are public employees. Most public sector spending will therefore be current expenditure, namely on wages and pensions, as well as subsidies (electricity, health, education, etc.). Government revenues are mainly derived from the exporting of services (essentially health personnel), goods (sugar, oil derivatives) and tourism. The Cuban government is therefore hoping that the development of the private sector economy, and in particular the tourist industry, will boost the tax revenues needed to balance the public accounts (only earnings from non-state owned activities are taxable). The Cuban public debt is expected to decrease with the repayment of the (mostly restructured) debt. However, the plan to merge the two Cuban currencies, the convertible peso (CUC) aligned with the dollar (for tourists and worker remittances) and the domestic peso (CUP with an exchange rate of 1 CUC to 24 CUP) used for wages and locally produced goods, remains tentative.
In terms of foreign trade, Cuba is highly dependent on its exports of services (tourism and medical services) and goods (mainly oil derivatives) and is extremely reliant on food and energy imports. The Cuban government has indicated its desire to increase purchases of imported goods with the aim of preparing for the gradual opening of the country. The growth in imports will be subject to continued close monitoring by the government in order to avoid the emergence of a current account deficit. The possibility that the Cuban government could introduce barriers on imports to protect its currency reserves cannot however be ruled out given the decline in shipments of Venezuelan oil, a percentage of which is in turn re-exported by Cuba. This policy could however delay any boost in local investments and production in the short term. Import restrictions, combined with increased remittances from workers abroad to the island and with the growth in tourist revenues should help ensure a current account surplus in 2017.
The continuing improvement in relations between Cuba and the United States does not seem to have been called into doubt by the new US President. The United States is expected to continue loosening the economic and trade sanctions it imposed on Cuba, but so far no timetable has been identified for the removal of the embargo and only the US Congress can repeal this. Cuba needs to continue developing links with countries in the region, in Europe and with China in particular. The ideological convergence between Cuba and Venezuela would suggest that oil shipments to the island, at lower levels, are likely to continue. In domestic terms, the Cuban political system is dominated by a single party, the Communist Party of Cuba (PCC). The next elections for the national and provincial assemblies will be held in 2018. The National Assembly will then elect the next President of Cuba. Raul Castro introduced a limit of two consecutive terms of office as President and is therefore due to stand down. He seems to have already made use of his presidential position to promote a new generation of leaders, essentially technocrats with proven experience in leadership roles within the structure of the Communist Party.