Castronomics, From Fidel to Li'l Brother Raul

♠ Posted by Emmanuel in at 1/13/2011 12:01:00 AM
What must this island nation do to work around the long-running US embargo against it? First came the foreign exchange-bringing tourists. Then came the Venezuelan doctors-for-oil deal. Vile consumerist filth like DVD players and cell phones came along shortly thereafter. Let's just say that since assuming leadership from his quite ill brother, erstwhile "Maximum Leader" Fidel, Raul Castro has set about dismantling Soviet-style central planning. Oh, the irony. To keep the revolution going, you must soft-pedal its more socialist elements.

Anyway, the good news as far as Cuba is concerned is that its trade surplus reportedly doubled in 2010 as Raul moves to consolidate the process of reforms he set into motion:
Cuba racked up a $3.9 billion trade surplus last year as President Raul Castro's efforts to cut imports and earn more abroad bore fruit for a second consecutive year, the government's statistics office reported on Friday. The surplus was nearly twice the $2 billion reported in 2009 -- good news for Cuba but only a first step toward getting its debt-ridden economy out of the woods.

The country has been struggling with severe financial problems since 2008, when hurricanes, the international financial crisis and internal inefficiencies left it without funds to pay its bills. The National Statistics Office reported on its web page,, that exports increased 12.9 percent to $13.6 billion in 2010, led by the selling of services at $9.4 billion. Imports fell 3.3 percent to $9 billion.

Higher prices for Cuba's main exports -- nickel, petroleum derivatives and medical and other technical services -- likely accounted for most of the increase, while revenues from tourism and communications were also reportedly up.

Some 75 percent of Cuban exports come from services such as tourism, communications and the export of doctors and other professionals to oil-rich countries such as Venezuela, Angola, Algeria and Qatar, which pay for the services on a sliding scale linked to oil prices. Prices for oil increased significantly in 2010, as they did for Cuban exports nickel and sugar.
Meanwhile, Raul the reformer is still at it. Heck, if retaining government employees that can't be paid for is a measure of socialism, then many parts of the United States are more communistic than Cuba circa early 2011:
Raul Castro has hammered away at the need for Cuba to get its economic house in order and pay its bills since taking over as president from his brother Fidel in 2008. The country's growing debt and service payments are a key reason for Castro's push to overhaul Cuba's Soviet-style economy, according to government insiders.

The reforms, to be discussed at a Communist Party congress in April, include drastic budget cuts and layoffs and ending most state subsidies. They also would grant state-run companies more autonomy and encourage more small private businesses, foreign investment, cooperatives and other "non-state" forms of running enterprises.
The revolution will continue...if fuelled with foreign exchange, that is.