From Planning to Market: A Framework for Cuba

Abstract

The measures introduced by Raúl Castro since 2008 and the most recent US-Cuba policy change indicate that Cuba is shifting from a planned and highly centralised state socialist economic model toward one in which economic actors and markets become main drivers of the economy. The examples of Asian and Central and Eastern European socialist countries suggest four distinguished pathways for such transition. The question is which one may provide a feasible model for Cuba. Based on the country's economic and population structure, this study places the Cuban case within the framework of socialist economic transitions and explores some policy implications.

Cuba, the centrally planned cigar, and its rivals

“…State control of cigar production begins with decisions of the Ministry of the Economy and Planning, in conjunction with the Ministry of Agriculture, on the allocation of land for cultivation . While Cuban agricultural reforms, especially since the end of the Soviet period, have given more autonomy to private farmers on growing and harvesting their crops, the Ministry of the Economy determines which crops to prioritise, based on recent domestic consumption, import patterns, available production capacity and planned foreign exchange availability (Font & Jancsics, ; Wong & Fernandez Dominguez, ; Wright, ). Major considerations in the allocation decisions include national goals for various categories of food production, and the goals for output of cash crops for export, such as bananas, citrus fruits and tobacco, including provisions for the Cuban tourism industry.…”

“…New agricultural reforms, combined with food shortages caused by the 2008 hurricanes, led to a new round of government‐directed domestic food production, with sharp increases in the cultivation of certain citrus and tropical fruits, possibly for export markets and the domestic tourist industry (FAO, ; Mesa‐Lago & Perez‐Lopez, ). Despite government intervention and incentives, however, the Cuban food sector remains weak (Font & Jancsics, ).…”

Tourism Research in Cuba: Gaps in Knowledge and Challenges for Sustainable Tourism

“…The Ministry of Tourism also plans to more than double the number of international-quality rooms by 2030 (from 50,000 to 108,000) to accommodate the projected 10 million international arrivals, plus an additional 5 million projected to arrive as cruise passengers [13]. These ambitious plans have been questioned [2,13], with concern regarding key barriers to tourism development, including burdensome bureaucracy (e.g., restrictions on private enterprise growth), the US embargo (e.g., restricted supply chain network), governmental price regulation (e.g., dual currency system), and high taxation, as well as a lack of capital and financial infrastructure (e.g., geographically limited transportation system and internet access, constraints on loans and foreign investment) [14][15][16][17]. Despite these challenges, scholars widely agree that Cuba urgently needs to adopt sustainable tourism principles and practices if the industry is to be successfully harnessed as a means to achieve national development goals.…”

“…The research is almost exclusively based on secondary data and speculative scenarios of future development, with a number of scholars underscoring the dearth of empirical studies on tourism development in Cuba [2,13,15,21,22]. Even on a regional scale, there is a notable absence of tourism research that focuses on a Latin American or Caribbean context [14], as well as nations within a transitioning economy [16,23,24]. Despite this growth, visitor expenditures have continuously declined since the 1990s, with low repeat visitors (return rates), which is in direct contrast to other Caribbean and Latin American destinations.…”

Tourism Initiatives Developed through Collaboration with Foreign Organizations: The Emergence of Responsible Practices in Cuba

“…Despite these potentials, some factors can hamper the tourism developmental process, such as the poor condition of the infrastructure, the challenging entrepreneurial climate and the lack of experience in relation to operating in a complex service sector (de Holan & Philipps, 1997;Font & Jancsics, 2016;Hingtgen et al, 2015;Simon, 1995). Moreover, some elements characterizing the Cuban tourism sector can compromise the potential benefits, in particular: the low return visit rates, the high dependence on low-cost packages and a small market (Babb, 2011;Elliott & Neirotti 2008;Sanchez & Adams, 2008;Taylor & McGlynn, 2009).…”