After years of forced recession by US embargoes, Cuba is about to emerge as a powerful trading partner and global tourism magnet
When Christopher Columbus sailed into Cuba in 1492, Cuba became a Spanish colony which it remained until Cuba gained formal independence in 1902. After a succession of despotic leaders, in 1959 it became governed as a socialist state. Years of being politically and economically isolated by the United States have kept Cuba relatively poor, but it has gradually gained access to foreign commerce and travel. Internal economic reforms are starting to modernize Cuba's economy and the recent thawing of US politics will make Cuba a hive of investment, growth and tourism over the next decades.
But its not all good news for American tourists. In an absolutely stupid - can only happen in America - draconian ruling by Congress in 2000, Americans are allowed to travel to Cuba but forbidden to go to the beach! I wonder sometimes what part of their anatomy these politicians keep their brains.
In 2008, Cuba was struck by three powerful hurricanes, leaving over 200,000 homeless, and US$5 billion of property damage. Remnants of that destruction can still be seen today.
The take home salary for most Cubans is around $20 a month. 40 percent of the Cuban labor force falls within a broad middle class, but consumption remains depressed due to low wages.
- Less than five percent of Cubans have access to the Internet
- A high percentage of Cubans and Cuban-Americans in the United States live in Florida; 18 percent of Miami residents identify as Cuban.
- 90 percent of Cubans own their own homes.
- Cuba’s population, now just over 11 million, is shrinking and rapidly aging. Cuba is closing primary schools and opening homes for the elderly, closing pediatric wards and opening geriatric wards.
- Cuba has a colossally well-trained work force. It is probably the best, most well-trained workforce at the cheapest labor-market price that any international investor could find anywhere in the world.
- The export of healthcare services, sending physicians, nurses, and healthcare technicians to countries like Venezuela and Brazil is a major export for Cuba Cubans seem to have a brain naturally switched on to science and healthcare.
- There are about 500,000 Cubans with self-employment licenses, though most are small four person operations as the tax goes up if employing more than four people.
There is only small income tax in Cuba. There is no corporate tax in Cuba. There is no value added tax in Cuba. There is no sales tax in Cuba. But there is a tax on the number of your employees.
If Cuba's ruling leaders lift constraints on investment, create incentives, and reform its tax, Cuba could really boom.