Cuba Industry

Cuban industry mainly produces food, tobacco products (cigars), machinery and chemical products. Cuba has invested heavily in medical research and manufactures both pharmaceuticals and medical equipment for export.

Prior to the collapse of communism in Eastern Europe in the early 1990s, Cuba had a more diverse industrial sector, but many factories had to close when the barter trade with the Eastern Bloc ceased. The Cuban industrial goods were of too low quality to be able to compete on the world market. In addition, many factories were forced to close as oil supplies from the Soviet Union slowed.

To reverse the downward trend, the government in the 1990s tried to make industries more efficient by dividing larger companies into several smaller ones, cutting back the number of employees and to some extent opening up the industrial sector to private investors.

• According to ABBREVIATIONFINDER, CU stands for the country of Cuba in geography.

In some areas, especially those linked to the tourism sector, there was some recovery but uneven supply of energy, too little capital and weak domestic demand continued to hamper the development of the industry.

Through an agreement with Venezuela, Cuba gained access to cheap oil from the year 2000, which laid the foundation for a new industry branch: oil refining. A modern refinery has been built in the city of Cienfuegos and made Cuba an exporter of oil products, some of which is shipped to Venezuela.

Foreign trade

After the turn of the millennium, Venezuela became the country’s most important trading partner but this role has now been taken over by China. The most important export goods are nickel and other metals.

Cuba’s imports are far greater than the country’s exports and thus there are large deficits in both the trade balance (trade in goods) and the current account (trade in goods and services). The deficit is covered, among other things, by aid and by the money that Cubans abroad send home to their relatives.

Prior to the 1990s, Cuba traded almost exclusively with countries in Eastern Europe. The trade was to a large extent pure barter. When this system collapsed (see Modern History), Cuba must seek new trading partners and new forms of its foreign trade.

Cuba signed new trade agreements with several former Soviet republics, but they could not cover the fallout of eastern trade. Therefore, Cuba sought to establish new trade relations with the West, with Latin America and Asian countries.

Since the beginning of the 2000s, Venezuela has supplied Cuba with cheap oil in exchange for Havana sending doctors and teachers in return. Cuba also refines some of the crude oil imported from Venezuela and re-exports the products in the form of gasoline, fuel, lubricant and more. From 2014, however, trade between countries declined sharply as a result of the accelerating economic crisis in Venezuela. Until 2016, Venezuela was Cuba’s largest trading partner, but the following year China took over that role. China primarily buys nickel and pharmaceuticals from Cuba, which in turn imports Chinese machinery and electrical appliances.

Due to the US blockade that has been in effect since the 1960s, trade with the US is limited. Food and medicine have since been exempted from the sanctions, and when Barack Obama was US president, the rules softened up a bit. In 2015, for example, US companies were allowed to export mobile phones and software to computers to Cuba.

Sugar’s role as the country’s most important export commodity has been taken over by nickel, which usually accounts for just over half of Cuba’s export of goods. Other important export goods are tobacco, pharmaceuticals, seafood and citrus fruits. Imports mainly comprise machinery, vehicles, fuel and food. The slow development in the agricultural sector has meant that Cuba still imports 80 percent of the food consumed in the country.

FACTS – FOREIGN TRADE

Commodity trade’s share of GDP

14 percent (2017)

Main export goods

nickel, tobacco, sugar, medical products, seafood, citrus fruits

Largest trading partner

Spain, Canada, Netherlands, China, Venezuela

Tourism

Tourism is one of the country’s most important sources of income in foreign currency. What mainly attracts foreigners is the fine Cuban beaches, but many also travel to Cuba to get to know the country’s social condition or to experience Cuban cultural life, not least the music.

Most tourists come from Canada. Second place comes Western Europeans. Following the approach between Cuba and the United States in 2014–2015 (see Foreign Policy and Defense), the United States eased restrictions on travel to Cuba and the number of US visitors increased significantly.

For the government, increased growth in the tourism industry is of paramount importance. There is a special police force whose task is to monitor the tourists and make sure they feel safe.

Sources for this text: europaworld.com, www.munzinger.de

FACTS – TOURISM

Number of foreign visitors per year

3,968,000 (2016)

tourist revenue

3069,000,000 US dollars (2016)

2010

December

The majority of released prisoners are in exile

At the end of the year, 40 of the 52 released prisoners were released and exiled in Spanish exile. Twelve are still incarcerated because they refuse to leave Cuba.

August

The number of government jobs should decrease

Castro says the state should begin to address the large surplus of labor in the public sector where 95 percent of all unemployed Cubans have employment. Public employees who are underemployed should be forced to look for other jobs, Castro says. According to the plans, one million government jobs (one fifth of the total number) will disappear by 2013‒2014.

July

52 dissidents are released

After a meeting with senior church representatives and a Spanish mediator, the government decides to release 52 of the 75 prisoners arrested in a 2003 assault on dissidents (see Modern History). The rest of those arrested had already been released. Spain promises to receive those released.

April

A number of businesses are privatized

In one experiment, the government assigns smaller hairdressing salons to employees who are given the right to manage their own businesses. Instead of being paid by the state, a hairdresser can now charge customers and pay taxes on their income. Later, the business expanded to include cafes, fast food outlets and other small-scale activities such as carpentry and locksmiths.

State Anti-Corruption Campaign

The government launches a comprehensive campaign against state corruption. 750 state-owned companies have their accounts audited.

February

Hunger striking prisoner dies

A political prisoner, Orlando Zapato Tamayo, dies after hunger strike for 85 days. The death upsets the outside world that condemns the government of Cuba.