Mar 012016
 

Last week I visited Cuba. I went with friends and family and we were all Havana great time. Unfortunately the hotel we stayed at, like most places around the area, doesn’t have Wi-Fi so I did not use the internet for a whole week. Last week’s blog posts were scheduled in advance.

I had a great time staying in Varadero and visiting Havana. I saw many old vintage style cars and hot rods. During my vacation I also learned a bit about the country’s economy.

16-03-cuba-varadero-beach

As one of the last communist countries in the world, Cuba is dominated by state-run enterprises and Marxist-Leninist ideologies. Most of the means of production are owned and operated by the Communist Party of Cuba. Naturally most Cubans who work are employed by the state.

Cuba’s economy uses 2 currencies; the CUP peso is worth about US $0.06, and the convertible CUC peso is pegged to the US dollar at a conversion rate of 1 to 1. The CUP is used by the country’s residences, and the CUC is only used by tourists and foreign visitors like myself.

A big part of Cuba’s economy is exporting sugar, tobacco, fish, fruits, coffee, potatoes, rum, and minerals such as nickel. In 2013 its nickel reserves were estimated at over 7% of the world’s total. Sherritt International, a Canadian company that I’m invested in, operates a large mining facility on the east side of Cuba.

16-03-havana-club-rum

The other large and growing industry in Cuba is tourism. Over 2.5 million tourists visit Cuba every year, predominantly from Ontario/Quebec Canada and Europe, generating more than US $2 billion of economic activity. Cuba’s own population is only about 11.2 million.

The average income in Cuba per person is about US $30 per month. Outside of tourist hot spots a Cuban denizen can expect to live comfortably on a monthly salary of just US $100 a month. 😀 Local Cubans don’t need a high income to survive because housing and transportation costs are relatively low and they all receive free education, health care, and food subsidies.

Although communism has its advantages it ultimately doesn’t work well in the long run. When a market isn’t allowed to be competitive it will fall behind other countries in terms of technology, infrastructure, and productivity. For example, most Cuban household still don’t have access to internet in 2016. Another problem with a planned economy is that it thwarts economic mobility. Income inequality is often cited as a major problem in North America. But at least children who are born into poverty in the U.S. still have a better chance to climb the social economic ladder than poor children in Cuba.

Cuba’s economic freedom score is 30, making it one of the world’s least free. By comparison, Canada’s economic freedom score is 78 and the United States scores 75. All foreign investors and entrepreneurs (except from Venezuela) are required to form joint ventures with the Cuban government. Cuba does trade with other countries but its average tariff rate is 10%, which deters foreign trade and investment. President Obama will visit Cuba in a few weeks, marking the first time in more than 80 years a sitting U.S. president will visit the country. 🙂 With more diplomatic talks and western influences I hope Raul Castro and the rest of the Cuban government will adopt more free market policies in their economy. And maybe next time when I visit, there will be Wi-Fi in my hotel. 😀

Visiting developing countries always makes me realize how lucky I am to live in Canada.

——————————————————————–
Random Useless Fact

Why Leo’s speech was so fluent when he won the Oscar.

16-03-leo-win-oscar-practice-speach

 

Leave a Reply

12 Comments on "Trip to Cuba"

Notify of
avatar
Anon
Guest
Anon

One great thing about the failed US invasion of Cuba is the resultant embargo which basically froze Cuba in a specific era, mainly the 1950’s. There’s a deep classic car/hot rod culture there, thanks to the crappy cars of the last 50 years being unavailable.

I met a visiting Cuban basketball team some years ago, it was amusing to see them wheeling all kinds of merchandise into their hotel room (including a big screen tv). They were also smart enough to bring boxes of Cuban cigars to sell, yes I bought a box.

FerdiS
Guest
FerdiS

Thanks for sharing! Sounds like an amazing experience. I wouldn’t mind visiting Cuba myself.

Fee
Guest
Fee

What a coincidence! One of my children is going to Havana with her class later this month, somewhere in between the royal visit of President Obama and the even-royaller visit of the Rolling Stones…good times!

DivHut
Guest

Great experience. I think visiting Cuba these days will give you a better sense of the communist style govt. than say visiting in 5 or ten years when it’s totally open. Reminds me of visiting eastern Europe in the late 80s or early 90s before many of the bloc nations became westernized like Hungary, Poland, Czech, Croatia, etc. etc. Thanks for sharing your trip.

P C
Guest

How does it feel to be totally disconnected? Wow $30/mo salary per person on average is next to nothing. Never thought it was that low. Cubans who work in the resorts have certainly hit the jackpot considering the other job opportunities in the market.

Mike
Guest
Mike

Looks like you had a great time.

wpDiscuz