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CUBA
A stellar year for economy
Lucila Horta
1/25/2007
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Energy policy and investment led to record growth.

Cuba’s gross domestic product grew 12.5 percent in 2006, the country’s largest economic growth since the revolution 48 years ago. The Economic Commission for Latin America and the Caribbean (ECLAC) said it was the highest growth in the region, followed only by giant economies as Venezuela and Argentina.

According to ECLAC, Cuba’s stellar economic year was the result of "the notable increase in the sale of professional services abroad, especially health care, and the expansion of the nickel and medicine exports."

"We are a country with a high percentage of highly qualified professionals, and our education system allows that this category [of workers] is constantly increasing. It’s in In the [service] sector where there are many growth opportunities because of the workforce’s high skill level which allows for the quick assimilation of the most advanced technologies and the development of research in important fields," said the Cuban Foreign Trade Minister Raúl de la Nuez in an interview with the Cuban weekly Opciones.

Cuba produces some 76,000 metric tons of nickel per year on average, and 50 percent of it is purchased by China. The price of the metal rose 160 percent in 2006, compared to 2005. Foreign sales from Cuba’s biotechnology sector jumped 90 percent (LP, Feb. 8, 2006).

ECLAC says that Cuba’s goods and services exports totaled US$10.4 billion in 2006, a 45-percent increase compared to 2005. Imports to Cuba increased 30 percent, totaling $10.3 billion.

Cuban Economy Minister José Luis Rodríguez says that this growth is the result of an enormous effort by the Cuban people to strengthen the so-called "Energy Revolution" and increase investment in production and basic services.

Cuba overhauled its electricity-generating system in 2006, meaning important investment increases in technology to use gas along with oil, for both individual use and for power generation.

Cuba produced 3.9 million metric tons of oil and gas last year, seven times its production in 1990, and half of what the country consumes, a savings of US$260 million, Vice President Carlos Lage said. Cuba consumes 180,000 barrels of oil per day, and produces 80,000 just for electricity generation (LP, Aug. 25, 2004).

The country will continue drilling in its 30 oil fields, which are run by a mix of national and foreign companies. In the western part of the country alone, the country plans to drill another 12 oil fields, which are expected to yield 2.2 metric tons of crude per year.

Cuban officials doled out 29 million electricity-saving appliances to the population as part of a new energy strategy that has helped prevent blackouts and to save fuel.

The government also opened a wind-power plant on the Isla de la Juventud, the second such establishment after Turiguanó, in the Ciego Ávila province, which opened in 1999 (LP, June 28, 2006).

Another factor that ECLAC highlights in its report is a budget surplus, which has allowed for an increase in international reserves and a "slight decline" in the country’s external debt.

Cuba has also formed an energy triangle with Venezuela, which has agreed to supply the island with 500,000 metric tons of coal for a thermoelectric plant and a stainless steel mill, whose construction China will participate in.

China already invested US$500 million for the extraction and processing of nickel-cobalt, through a plan to double production. Even though China imports more sugar and medicine than any other products, the two countries have agreements in the tourism and science and technology sectors, among others.

Some of this surplus was allocated for social programs and needs.

Approximately 110,000 houses were constructed in 2006, nearly three times as many as in 2005, Rodríguez, the economy minister, told Cuba’s National Assembly.

The government says it will designate 43 percent of its gross domestic product in 2007 for social spending, 22.6 percent on health and education, or four times the Latin American average.


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