Cuba last year devalued its currency by 18 percent and fell behind in debt payments of $500 million to private banks and firms in France, Spain, Japan, Canada, Chile and Venezuela. (This does not include the repayment of government trade credits to France for the last four years and the principal on foreign debt of $35 billion.) With export prices down in nickel, sugar and tobacco, along with a fall in tourism and remittances from abroad, Cuba will remain an economic basket case. Doing business in countries that violate labor rights is not considered good business practice.
In Cuba, workers in foreign joint ventures are paid $400 to $500 a month, except that the Cuban government contracts the workers and pays them 400 to 500 pesos, or $20 a month, instead. Exploitation of child labor is officially tolerated, and it is commonplace to find children as young as 8 who are working. Finally, liberalizing exports to Cuba will produce a revenue windfall for customs brokerages, wholesale, distribution and retail stores -- all government-operated. This will provide increased money for Mr. Castro's intelligence and security services and neighborhood vigilante organizations, further postponing democracy and economic freedom in Cuba.
There are a score of countries in the Caribbean Basin that embrace free markets, political democracy and institutional reforms, thereby offering far greater opportunities than Cuba.***
Cuban Economic Downturn Deepens Island's Hardship - Duh, it's the communism. *** HAVANA (Reuters) - Communist Cuba's economy has been battered by falling tourism, low export prices and shortages of oil that will make life harder on the Caribbean island, experts and business sources said on Monday.
President Fidel Castro's government plans to shut down almost half of Cuba's inefficient sugar mills, which cannot compete at today's rock-bottom world price of about 5 U.S. cents a pound. The drastic measure will leave tens of thousands of Cubans out of work in Cuba's largest industry, which for decades was the backbone of its socialist revolution.
Cuba's pressing need for hard currency to pay for essential imports of food and oil led the government to jack up prices for consumer goods sold in dollar shops by up to 30 percent. The price hikes angered Cubans, most of whom earn local pesos but need dollars to buy a fan, a refrigerator or other basic consumer goods in the state-run shops.
"It is going to be a very hot summer in Havana, which can only mean more push for migration and more social tension," said Damian Fernandez, an expert on Cuba at Miami's Florida International University. ***