Private businesses[edit]
Owners of small private restaurants (paladares) originally could seat no more than 12 people[75] and can only employ family members. Set monthly fees must be paid regardless of income earned and frequent inspections yield stiff fines when any of the many self-employment regulations are violated.
As of 2012, more than 150,000 farmers had signed up to lease land from the government for bonus crops. Before, home-owners were only allowed to swap; once buying and selling were allowed, prices rose.[45]
In cities, "urban agriculture" farms small parcels. Growing organopónicos (organic gardens) in the private sector has been attractive to city-dwelling small producers who sell their products where they produce them, avoiding taxes and enjoying a measure of government help from the Ministry of Agriculture (MINAGRI) in the form of seed houses and advisers.
Poverty[edit]
Typical wages range from 400 non-convertible Cuban pesos a month, for a factory worker, to 700 per month for a doctor, or a range of around 17–30 US dollars per month. However, the Human Development Index of Cuba still ranks much higher than the vast majority of Latin American nations.[76] After Cuba lost Soviet subsidies in 1991, malnutrition resulted in an outbreak of diseases.[77] Despite this, the poverty level reported by the government is one of the lowest in the developing world, ranking 6th out of 108 countries, 4th in Latin America and 48th among all countries.[78] Pensions are among the smallest in the Americas at $9.50/month. In 2009, Raúl Castro increased minimum pensions by 2 dollars, which he said was to recompense for those who have "dedicated a great part of their lives to working... and who remain firm in defense of socialism".[79]
Public facilities[edit]
- La Bodega – For Cuban nationals only. Redeems coupons for rice, sugar, oil, matches and sells other foodstuffs including rum.[45]
- La Coppelia – A government-owned facility offering ice cream, juice and sweets.
- Paladar – A type of small, privately owned restaurant facility.
- La Farmacia – Low-priced medicine, with the lowest costs anywhere in the world.
- Etecsa – National telephone service provider.
- La Feria – A weekly market (Sunday market-type) owned by the government.
- Cervecería Bucanero – A beverage manufacturer, providing both alcoholic and non-alcoholic beverages.
- Ciego Montero – The main soft-drink and beverage distributor.
Connection with Venezuela[edit]
The relationship cultivated between Cuba and Venezuela in recent years resulted in agreements in which Venezuela provides cheap oil in exchange for Cuban "missions" of doctors to bolster the Venezuelan health care system. Cuba has the second-highest per capita number of physicians in the world (behind Italy). The country sends tens of thousands of doctors to other countries as aid, as well as to obtain favorable trade terms.[80] In nominal terms, the Venezuelan subsidy is higher than whatever subsidy the Soviet Union gave to Cuba,[81] with the Cuban state receiving cheap oil and the Cuban economy receiving around $6 billion annually. According to Mesa-Lago, a Cuban-born US economist. "If this help stops, industry is paralysed, transportation is paralysed and you'll see the effects in everything from electricity to sugar mills," he said.[82]
From an economic standpoint, Cuba relies much more on Venezuela than Venezuela does on Cuba. As of 2012, Venezuela accounted for 20.8% of Cuba's GDP while Cuba only accounted for roughly 4% of Venezuela's.[83] Because of this reliance, the most recent economic Crisis in Venezuela (2012-present), with inflation nearing 800% and GDP shrinking by 19% in 2016, Cuba is not receiving their amount of payment and heavily subsidized oil. Further budget cuts are in the plans for 2018 marking a third straight year.[84]
Economic freedom[edit]
In 2014 Cuba's economic freedom score was 28.7, making its economy one of the world's least free. Its overall score was 0.2 point higher than last year, with deteriorations in trade freedom, fiscal freedom, monetary freedom and freedom from corruption counterbalanced by an improvement in business freedom. Cuba ranked least free of 29 countries in the South and Central America/Caribbean region and its overall score was significantly lower than the regional average. Over the 20-year history of the Index, Cuba's economic freedom remained stagnant near the bottom of the “repressed” category. Its overall score improvement was less than 1 point over the past two decades, with score gains in fiscal freedom and freedom from corruption offset by double-digit declines in business freedom and investment freedom.
Despite some progress in restructuring the state sector since 2010, the private sector remained constrained by heavy regulations and tight state controls. The Heritage Foundation states that open-market policies were not in place to spur growth in trade and investment and the lack of competition continued to stifle dynamic economic expansion. A watered-down reform package endorsed by the Party trimmed the number of state workers and expanded the list of approved professions, but many details of the reform remained obscure.[74]
Taxes and revenues[edit]
As of 2009, Cuba had $47.08 billion in revenues and $50.34 billion in expenditures with 34.6% of GDP in public debt, an account balance of $513 million and $4.647 billion in reserves of foreign exchange and gold.[2] Government spending is around 67 percent of GDP and public debt is around 35 percent of the domestic economy. Despite reforms, the government continues to play a large role in the economy.[74]
The top individual income tax rate is 50 percent. The top corporate tax rate is 30 percent (35 percent for wholly foreign-owned companies). Other taxes include a tax on
