How It Is
Cuba, with an annual GDP of US$110 billion, is running a massive trade deficit and a foreign debt topping $19 billion as of 2009. The economy, which is in freefall, is kept afloat with substantial aid from Venezuela, which supplies Cuba with oil (US$3.1 billion in 2008) and financial aid. Brazil, China, and Russia have also substantially increased their investments.
The economy suffered a devastating blow in 2008, when a series of hurricanes caused an estimated US$10 billion in damage. Raúl Castro initiated belt-tightening, including restrictions on remittances of profits by foreign corporations doing business in Cuba. Key ministers have been replaced with disciplinarians charged with bringing military-style efficiency to the economy. Several economic entities and ministries have been disbanded or merged. A new salary bonus system that rewards productivity was introduced.
© Christopher P. Baker from Moon Cuba, 5th Edition