Cuba Economic Structure

The state plays an important role in Cuba’s economic structure, with virtually all production and foreign trade controlled by it. The Cuban government is trying hard to maintain full political control while launching several reforms to rid the country of food, consumer goods and electricity shortages. Cuba’s low farm output makes it highly dependant on imports but it has a strong force of medical professionals, whose services are highly in demand in other nations. The country’s dual currency system has resulted in severe inequality amongst its people.

The state plays an important role in Cuba’s economic structure, with virtually all production and foreign trade controlled by it. The Cuban government is trying hard to maintain full political control while launching several reforms to rid the country of food, consumer goods and electricity shortages. Cuba’s low farm output makes it highly dependant on imports but it has a strong force of medical professionals, whose services are highly in demand in other nations. The country’s dual currency system has resulted in severe inequality amongst its people. Cuba’s economic growth declined to 1.4% in 2009 and its future pace is likely to be determined by the pace and success of reforms.[br]

Cuba Economic Structure: Major Contributors

Over 70% of Cuba’s Gross Domestic Product or GDP is generated by the country’s service sector. State owned services companies and the tourism sector, which form the mainstay of Cuba’s services segment, employ nearly 60% of the country’s population.

 

Cuba’s agriculture sector is very weak, which is evident in the country’s weak farm output levels. The major agricultural products of Cuba are sugar, tobacco, citrus, coffee, rice, potatoes, beans and livestock. The agriculture segment employs around 20% of Cuba’s population but contributes only 4% of its GDP.

 

Cuban industry employs nearly 20% of the country’s population and contributes a nearly similar proportion to the country’s GDP. The major industrial units in Cuba manufacture

sugar, petroleum, tobacco, construction, nickel, steel, cement, agricultural machinery and pharmaceuticals. The country’s industrial production growth rate declined by 2.8% in   2009 due to low productivity levels and below-capacity production. However, the country’s world class biotechnology and pharmaceutical industry is expected to play an important role in its future growth.

 

The Cuban government is the biggest employer and employs nearly 78% of the country’s population, with the remaining 22% being employed by the non-state sector or being self employed.[br]

 

Cuba Economic Structure: Reforms

 

Cuba’s current government has taken up reforms that involve allowing limited expansion of private enterprises through grant of licenses to food vendors, barbers and several other small businesses. However, several restrictions on investment by foreign enterprises remain. Improved productivity levels are expected to reduce Cuba’s dependence on imports and put its balance of trade in a favorable position. The country’s strong relationship with Venezuela enables it to continue to import oil on favorable terms.