The Twenty Seventh Annual Meeting of the Association for the Study of the Cuban Economy (ASCE) was held, as usual, in late July in Miami. But it was a bit different this year; most participants--paper presenters, discussants, and audience members--seemed to agree that significant "reforms" of the Cuban economy would not only be limited in the next few years, but because of the slow and partial implementation of those that have occurred, inequality was increasing. But even more conclusive was the general belief that not only could no major changes be expected until the dictatorial regime was changed, although as forces beyond the dictatorship's control, now unleashed, continue steadily there may be some hope in the further future for a more open and prosperous Cuba. I'm not betting on that yet.
It is the gravity of Cuba's present economic/social situation that leads to this conclusion; the situation is so bad, so extreme, that it is difficult to believe the present regime could--let alone want to--ameliorate this mess. In spite of a boom in US visitors (both Cuban-Americans and other Americans) as well as a clear expansion of private restaurants, B&B's, and other services stemming from President Obama's 2014 opening measures, Cuba's GDP fell last year and may continue to fall this year. Export and import of goods has fallen. Liberalizing reforms in agriculture have been reversed. No action has been taken to unify the perverse dual exchange rate. Petroleum imports from Venezuela have almost been halved; Cuba had to buy some oil from Russia recently but paid cash for the purchase. Housing construction has faltered; emphasis is now placed on upgrading some of Old Havana's deteriorated buildings to please tourists. The medical system used by most Cubans is in a state of chaos; hospitals are being closed and consolidated. Equally discouraging, the quality and resources dedicated to education have greatly deteriorated.
The external factors that Cuba confronts also lead to pessimism, at least in the short term. Venezuela's political turmoil means its highly subsidized oil deliveries to Cuba will not increase; they will likely continue to decline. President Trump's minor adjustments to the Obama actions will not lead to a continued boom of US tourists; at worst it may well lead to a decline in non-Cuban-American tourists as the 12 reasons to justify visiting the island are more carefully monitored and payment to military-owned hotels and services is restricted. Russia, now under EU and US sanctions and with a declining economy, is in no position to bail out Cuba, and China seems more interested in commercial activities than grant assistance.
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