Cuba’s Economy: Elisha

Cigars Kitchen Bar CarsIn the 1990s, Cuba’s economy went through a structural change. Instead of primary goods, Cuba now focuses on services such as tourism and healthcare. We learned on our first day in Cuba that the country was a late-comer to the tourism market, but they seem to have caught up quickly. Everywhere we went, including quick shops on the side of the road, we saw dozens of souvenir t-shirts, hats, keychains, and the like, as well as craft items. However, the items did not vary from place to place. It was the same for things like soda and bottled water, as well. I only saw one or two brands of water. I often wondered whether privatization of businesses will eventually lead to more brand choice.
In 2008, President Raul Castro announced that Cuba’s problem is its economy. The economy is growing, but not enough. Among the reasons include a lack of investment, technology, and employee incentives. I anticipate reading the actual language of the new foreign investment law. Cuba’s people are so hopeful and I think they will be able to grow at a faster rate and eventually meet their full potential with help from investors. Since 2011, Cuba has attempted to downsize its government with the idea that small business is good. Now, small businesses are popping up everywhere in Cuba. One of my favorite parts of the trip was visiting Bella Habana and hearing the owner’s story of how he opened his own restaurant. Perhaps with new privately owned businesses, the economy will grow more in the near future. I also look forward to seeing whether foreign investment will affect the tax rate for Cuban businesses.
Due to the scarcity of supplies and products necessary for starting businesses, many entrepreneurs bring items back from Miami. I noticed numerous people having items like blenders, televisions, and other appliances and electronics wrapped in plastic at the airport in Miami on our way to Havana. Cuban-Americans in Miami, as well as other U.S. cities, are a great influence on American policy and the Cuban people have hope that with enough of that influence, the U.S. will lift the economic embargo, which would be tremendous for Cuba. The embargo puts quite a damper on Cuba’s economy because it puts pressure on other countries to refrain from doing business with Cuba.

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