Despite improved relations with the United States, Cuba’s economy shrank for the first time in almost a quarter of a century in 2016. Cuba’s minister of economy said the crisis with its key trading partner Venezuela saw gross domestic product fall by 0.9 percent.
CGTN’s Michael Voss reports.
US-Cuba relations influences future Cuban tourism and economyDespite improved relations with the United States, Cuba's economy shrank for the first time in almost a quarter of a century in 2016. Cuba's minister of economy said the crisis with its key trading partner Venezuela saw gross domestic product fall by 0.9 percent. CGTN's Michael Voss reports.
Cuba’s tourist industry is in full swing. A record 4 million visitors came here in 2016, 13 percent more than the previous year, according to the Ministry of Tourism. It’s more than double the increase that the government had expected.
But just a few blocks away there is another Cuba that is struggling to make ends meet and despite the boost in tourism revenues.
The island’s economy went into recession last year and the government is warning of tough times ahead.
There are worries about shortages in the shops.
Subsidized oil supplies from Venezuela in return for Cuban doctors working there have been cut in half, while world prices for major exports like nickel and sugar are down. Cuba is also paying off large chunks of its foreign debt, further reducing liquidity.
The first small-scale joint venture factories are currently under construction in the Special Development Zone at Mariel but it’s a long way short of the two and a half billion dollars a year, which Cuba says it needs to kick-start the economy.
Addressing the recent National Assembly, Cuba’s President Raul Castro said foreign capital is needed but offered no new incentives to invest.
Tourism remains one of the few bright spots of the Cuban economy but even this lucrative business could be hit if relations with the United States start to deteriorate once Donald Trump becomes president.
Donald Trump has made differing statements on Cuba including threatening to reverse all of President Barack Obama’s initiatives.
Many Cubans are hoping that it’s Donald Trump, the businessman who takes power and sees the commercial benefits of maintaining relations with Cuba.
But even if that does prove the case, it may not be enough to pull Cuba’s economy out of recession.