Date
6 December 2016
Cuba’s literacy rate is almost 100 percent. About 50 percent of young people are able to attend college. Photo: authenticubatours.com
Cuba’s literacy rate is almost 100 percent. About 50 percent of young people are able to attend college. Photo: authenticubatours.com

Why is Cuba considered a utopia?

Cuba’s former president, Fidel Castro, died on Nov. 25 at the age of 90. 

The iconic leader had been seriously ill for years, and his younger brother and successor, President Raul Castro, has been running the country since eight years ago.

Some may have the impression that Cuba is a poor communist country, somewhat like North Korea. That thinking couldn’t be more wrong.

In fact, Cuba’s nominal GDP per capita was US$7,300 last year — making it a middle-income country — close to China’s US$7,600 but far above North Korea’s US$700, Vietnam’s US$2,100 and the Philippines’ US$2,900.

If we adjust the number with purchasing power parity, Cuba’s GDP per capita would be US$21,000, surpassing that of China and largely on par with European nations like Turkey and Croatia.

Cuba owes much of its economic success to Raul Castro, who has introduced a series of market-oriented reforms since 2008.

The country’s GDP has grown more than 40 percent in eight years. The jobless rate is less than 3 percent and the poverty rate is under 1.5 percent.

Consumer prices have largely remained stable all these years.

Meanwhile, the literacy rate is 99.7 percent and average life expectancy is 79.1.

Cubans were living a comfortable life even before the economic reform thanks to a “cradle to grave” welfare system covering life essentials like housing, education and healthcare.

More than 90 percent of Cubans own their homes as subsidized by the government.

The nation has 47 universities; about 120,000 people enroll each year.

Cuba’s healthcare system is widely admired. Local residents enjoy free and high-standard medical care.

Many developed nations and even the World Health Organization have come to Cuba to find out why its healthcare system is so successful.

So what made this so-called “Cuba miracle” possible?

The truth is Cuba exports a large amount of sugar, coffee, seafood, minerals and cigar.

With tourism income, there is already enough for everyone in this country of 11 million people.

Cuba still adopts the single-party dictatorship like mainland China. And Fidel Castro held power for 49 years before handing the reins to his younger brother in 2008.

However, the two brothers have managed to maintain the revolutionary spirit over the course of nearly 60 years, governing the country with the best interests of the public in mind.

Cuba’s civil servants are well known for high efficiency and integrity.

Nevertheless, this communist utopia is also changing under the impact of globalization and internet technology.

Fidel Castro once admitted that “the Cuban model doesn’t even work for us anymore, let alone export it to other nations.”

Young Cubans are no longer satisfied with a simple life.

They crave stuff like iPhones and Nike sneakers. Internet penetration rate exceeds 30 percent and tech giants like Google and Facebook have tapped into the Cuban market.

It’s believed Castro’s death could give Raul Castro more space to pursue economic reform.

While Cuba’s economy may keep expanding, the good old Cuba may one day become a distant memory.

This article appeared in the Hong Kong Economic Journal on Nov.28

Translation by Julie Zhu

[Chinese version 中文版]

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RT/RA

Hong Kong Economic Journal columnist

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