The recently published book by Richard E. Feinberg provides a good opportunity to revisit the economic prospects of Cuba. In the book's title the question is omitted, so it echoes the official slogan that the Cuban government has been using to signal that something has changed. The content of the book, however, does include much to warrant a question mark.
Cuba: Open for Business provides a useful foundation for thinking about what the future of Cuba could be like and about the pitfalls to navigate. It is a well-crafted up-to-date review of the challenges and opportunities that faces the country and of some of the dynamics at play in Cuba and in the relationship between the US and Cuba. However, the very skimpy Appendix on "Basics Facts" makes it clear how little solid information the author was able to garner -which probably explains why its analysis is for the most part confined to the realm of anecdote. In the final analysis, the book begs more questions than it actually raises and offers less fact-based analysis than will be needed to forge constructive, creative avenues for exploring the options that Cuba's leaders need to consider if the country is to realize its potential.
It is not clear what it will take for the Cuban government to shift away from an implicit denial of the fundamentally serious economic situation and start looking at realistic options. Political considerations seem to be one major reasons of the official mental blockade (more pernicious even that the economic blockade?) that afflicts the island. But as examples across the world--Vietnam to mention one--show, it is possible to revitalize an economy by resorting to market mechanisms without it necessarily implying political regime changes.
The dire--and very peculiar--situation of the Cuban economy is best characterized by its sources of foreign exchange. Although official statistics do not provide enough data for a detailed analysis, the basic facts are clear. The main sources of foreign exchange are: the provision of services abroad by Cuban medical personnel under state-to-state contracts; the remittances and gift parcels sent by expatriate Cubans; and tourism. Commodity exports used to be a fourth significant source but no longer ... low commodity prices for Cuban minerals and the combined effect of lower world prices and reduced oil shipments from Venezuela (part of which Cuba used to resell) have stymied that source.
Medical services--with the state, rather than the health professionals, keeping the lion's share of the revenue--and remittances and gifts hardly seem a solid foundation for future economic growth. Tourism--given the need for major facility upgrades and new hotels--will be quite foreign exchange intensive for years to come, so unlikely to be the engine of economic growth and net earner of foreign exchange that Cuban hopes for ... plus the weak and decaying infrastructure could well take a toll on the tourist experience in Cuba--denting hopes for the lucrative repeat visits.
The official strategy that appears to envision an economy dominated by state enterprises and complemented by tightly controlled foreign investment fails to address the fundamental weaknesses of the Cuban economy. Only unleashing market forces and entrepreneurial dynamics--beyond the current scope allowed through the 'cuentapropista' phenomenon offers a chance for the change of gears that the Cuban economy desperately needs.
Exploring the options for doing that and facing the reality of the certain failure "non-business as usual" is an urgent matter. But it needs to be done with a combination of creativity, imagination and with courageous pragmatism. All of those things are in abundant supply in Cuba--though maybe less so in official circles. Scenarios of the future integration of Cuba in the global economy would be a good way launching that exploration. Let's find a way to make them happen and hope that kind of exercise will help overcome all the blockades afflicting Cuba.