The Miami Herald
August 3, 2001

Cuban economy below '89 level

 Per capita income was 1,476 pesos in 2000, down 25 percent from 1989's 1,976 pesos per person.


 Still adjusting from the shock of the collapse of the Soviet Union, the Cuban economy is far behind where it was in 1989 -- even though it grew 5.6 percent in 2000.

 So says Carmelo Mesa-Lago, an economist at the University of Pittsburgh who compiles data based on official Cuban government sources.

 In a report to the 11th annual meeting of the Association for the Study of the Cuban Economy, Mesa stated that a basic figure of the economy -- gross domestic product per capita -- has grown gradually since hitting bottom in 1993.

 Per capita income climbed to 1,476 pesos in 2000, up slightly from 1,405 in 1999 -- but still down 25 percent from 1989's 1,976 pesos per person.

 About 300 economists, bankers and policymakers from the United States, Latin America and Europe are attending the conference at the Biltmore Hotel.


 Though most were accustomed to hearing negative reports about the Cuban economy, many were surprised by Mesa-Lago's figures on education, which has traditionally been one of the Castro government's strong points.

 Mesa-Lago reported that university enrollment has plummeted -- from 242,000 in 1989 to 102,000 in 1998. Attendance rebounded just slightly in 1999, the last year for which Mesa-Lago has figures, climbing to 107,000.

 The reason is that, as Castro has shifted to a tourism economy, said Mesa-Lago, the value of education has declined dramatically.

 "Do you want to be an engineer earning pesos, or a taxi driver earning dollars? . . . I don't know of any other nation in Latin America that has such such a high period of decline in education over the past 10 years.''


 Mesa-Lago, who is also an economics professor at Florida International University, acknowledged that some of the government's statistics were open to question,
 particularly because the Castro regime rarely reports on what's happening in the burgeoning private sector, where Cubans gain dollars legally or illegally.

 "The private sector in Cuba is like an iceberg,'' he said. "We see very little.''

 Still, said Luis Locay, an economist at the University of Miami, "Mesa-Lago's figures are the best we get each year about what's happening in Cuba.''

 The Cuban economy is not all gloom.

 Tourism has soared 977 percent in the past 11 years, reaching $1.8 billion. Nickel mining has climbed steadily, to 71,000 metric tons in 2000, up 51 percent from 1989. Oil production has risen 234 percent, to 2.4 million metric tons. Even so, Cuba must still import 77 percent of the oil it consumes.


 The traditional powerhouse, sugar, showed a modest increase last year, climbing from 3.8 million metric tons in 1999 to four million metric tons in 2000 -- still way below the 8.1 million metric tons produced by the harvest of 1989.

 Another serious problem is foreign trade.

 After losing the support of the Soviet Union, exports fell from 5.4 billion pesos in 1989 to 1.7 billion pesos in 2000. That led to a trade deficit last year of 3.2 billion pesos.

 That's an "historic deficit for Cuba,'' said Mesa-Lago. Since losing the generosity of the old Soviet Union, Cuba has amassed an external debt that now stands at $11 billion.

 "These loans will reach a point of no return,'' the Cuban-American economist stated. "But I don't know where that is.''

                                    © 2001