1. NS4540 Winter Term 2017 Cuba Up-Date 2016
Federal Reserve Bank of Chicago, Strong Dollar Weak Dollar

2. Cuba Up-date 2016 II Seventh Congress of Communist Party, April 2016
Economy was main focus
Just as in 2011 when Castro launched the updating of Cuba’s Soviet Era economic model
Sought to replace it with a Cuban version of market socialism
Three economic documents produced
Review of economic performance since 2011
A plan for , and
A broad national development plan looking out to 2030
William LeoGrande, Cuba’s Communists Face Contradiction of Economic Reform vs. Ideology WPR, April 22, 2016

3. Cuba Up-date 2016 I Performance review was disheartening
Only 21 of the 313 economic guidelines adopted in 2011 have been fully implemented
Castro attributed this to “the burden of an outdated mentality” and “an attitude of inertia.”
Annual GDP growth rate from just 2.8% not enough Castro conceded to improve standard of living for most people
Tourism and export of medical services were bright spots with tourism growing 17% in 2015
However agricultural production lagged despite the expansion of market incentives for farmers
Cuba still imports 60% of its food at a cost of $2 billion annually when it should be exporting food
Private sector lacking seeds, fertilizer, pesticides and equipment

4. Cuba Up-date 2016 III
Process of rationalizing state enterprises which still produce about ¾ of Cuba’s GDP slow
Hampered by managers not encouraging initiative and entrepreneurship
Castro vowed to push ahead announcing Cuba would legalize small and medium-sized private businesses and
Continue devolving small state enterprises and cooperatives
Only strategic sectors of the economy “decisive for national development” would remain in the state sector

5. Cuba Up-date 2016 IV
On the questions of how to stimulate growth and manage relations with the U.S. – Dilemmas
Cuba’s leadership faces tensions between economic imperatives and political necessity
Cuba wants normal relations with the U.S. to increase trade, tourism and investment – all key to improving growth
With engagement comes political risk that Cubans may become less tolerant of
poor economic performance – blamed for many years on the U.S. Embargo
State’s restrictions on civil liberties – blamed on need for unity in face of U.S. aggression

6. Cuba Up-date 2016 V
Contradiction between economic dynamics and political needs evident in current problem of rising food prices
With private farmers able to sell produce to hotels full of tourists, supply of food in free farmer’s markets shrank earlier in driving prices up
Economic logic would dictate higher prices would stimulate greater production in long term but that was a political risk government unwilling to take
Forced farmers to sell more of their produce through state distribution systems at controlled price
Pleased consumers, but undercut incentives for farmers to raise production

7. Cuba Up-date 2016 VI
In addition with economic transformation underway income distribution is worsening
Major challenge to the Communist Party
Sustainable and prosperous socialism requires economic change but
Near-term dislocations that change produces are undermining political supports for reform process both in elite circles and on streets.