……………… IN THEORY, tourism could replace sugar as Cuba's chief source of hard currency-indeed, it has already done so. But tourism by itself will never produce anything like the level of prosperity Cuba enjoyed under the U.S. economic umbrella from 1901 to 1959 or even during the term of its membership in the Soviet commonwealth of nations from 1960 to 1991, when positive trade balances were secured and underwritten by a politico-military alliance.
There are several reasons for this. Since so little of value is produced on the island, most of what the tourist industry needs to sustain itself-including food-has to be imported. This is itself not an unusual situation in the Caribbean: according to official figures, Barbados, for example, manages to retain a mere nineteen cents out of every dollar entering that country. Although Cuba claims to keep 22 cents, that seems unlikely: in contrast to Barbados, it does not possess a small business class or a significant private agricultural sector to supply at least some goods and services. And even if the Cuban figure were correct, the island would have to gross more than $30 billion a year in order to replicate its former annual Soviet subsidy of $6 billion-a flatly impossible task. Mexico, which possesses a far more sophisticated infrastructure and boasts a vastly greater menu of attractions than Cuba, grosses $10 billion from tourism in a good year.
While the tourist industry has unquestionably provided a much-needed source of economic oxygen for the regime, it has also introduced new distortions into Cuban life. To anyone visiting the island, the most striking of these is the geometric growth in prostitution of both sexes. Another is the invidious comparisons that Cubans are now in a position to make between their own situation and that of ordinary tourists not only from European countries but from nearby Latin nations like Mexico, El Salvador, Nicaragua, and the Dominican Republic, not to mention the thousands of Cuban-Americans who are permitted under U.S. law to visit their families once a year. (Many, ignoring U.S. restrictions, visit as often as they like by traveling through third countries.) At the same time, Cuba's vaunted health-care system, which foreign visitors never fail to praise (often without actually bothering to visit a clinic or hospital), has been completely reoriented toward offering sophisticated services, including plastic surgery, to foreigners who can pay in dollars. Not surprisingly, clinics servicing ordinary Cubans often lack medicines, bandages, syringes, and other basics. (1.)
Since tourism-the only dynamic sector of the economy-can provide employment for only a tiny percentage of the Cuban work force, it has threatened to create a kind of worker's aristocracy (to use a Marxist term). The regime claims to have mitigated this danger by requiring all foreign enterprises, including many hotels and other tourist services, to hire personnel from a pool provided by the government, to which the foreign employers must also consign wages. The government then typically pays these workers at a rate of about a tenth of what they would earn in a free-market economy, with the remainder being transferred to what it calls prestaciones socials - that is, social services like free education, free health care, etc. It requires quite a stretch of the imagination to believe that the full 90 percent is being allocated to good works and that the Communist party, the army, and the police are not first taking their own hefty shares.