Wednesday, October 24, 2018

Cuba's Sugar Problem

For the first time, Cuba is importing sugar in large quantities. That fact on its own is not automatically problematic if the economy is so diverse that other sectors are picking up the slack. But they're not. Cuba is a net food importer and remains dependent on agricultural goods (and thus weather).

With the new constitution, there is talk of bringing in foreign investors, which for Cuba is akin to Mexico bringing foreigners into the oil industry. These are sectors that are deeply tied to nationalism and sovereignty, both nationalized from U.S. companies. Handing them back is an admission of state-run failure.

Sugar remains Cuba's leading export, at 31% of total exports in 2016, followed by rolled tobacco (22%) and hard liquor (8.8%). There is even "human or animal blood" in there at 2.1%. Cuba imports just about everything so no one product dominates: poultry meat is first at 2.7%. Meanwhile, the country is saddled with debt, faces Venezuela's collapse, is dealing with severe hurricanes, as always has the embargo, and of course a state-run economy that cannot sustain itself. Taken together, the Castros have handed only a shell of an economy to their successors.


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