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High level of economic growth
predicted for 2007
• Export of goods and services
confirmed as the principal commercial activity
BY
NAVIL GARCIA ALFONSO —Granma International staff
writer—
THE
Cuban economy has experienced sustained growth since
1995, the year in which the abrupt fall of
indicators, due to the disappearance of the
socialist camp, came to a halt.
During this period, an astute governmental policy,
which included a reorientation of the economy, led
to the recovery of the country’s trade balance to
the point that Cuba had the highest growth indices
in Latin America for 2006.
According to a statement by José Luis Rodríguez,
minister of economy and planning, during the recent
International Conference on Globalization and
Problems of Development in Havana, an increase of
10% in the Gross Domestic Product is expected this
year.
This, the most significant economic and social
results in recent years, is due to significant
structural changes in economic policy and the
improvement of commercial activities in search of
higher profits at lower cost.
Reorienting the economy toward a service-based one
occurred to replace the weak role played by
sugarcane production in the last stage. In 2006
services represented 76% of the GDP while in 1989
they stood at just 55%.
In
fact, that economic sector accounts for nearly three
quarters of all exports and receives 68% of total
investments.
The
minister affirmed that the panorama has changed
appreciatively, and that the traditional tendency to
give priority to the export of goods has been
reversed. Services are currently the island’s
principal export product, and their perfection will
consolidate Cuba’s position on the international
market.
Another transformation has been a geographical
reorientation of the country’s international trade,
which in 1989 was centered on Europe with 88%. Latin
America only enjoyed 6% of the island’s trade. In
2005, these figures were 30% for Latin America and
35% for Europe.
Political and economic integration with various
countries in the region, especially with Venezuela,
Cuba’s leading trade partner, has played a major
role in that change. Other agreements have been
established with Bolivia, Brazil, Argentina and
Nicaragua.
China remains in second place, providing the country
with considerable technology.
Trade relations with these nations and the expansion
of foreign credit have allowed the country to
develop an energy program that has eliminated
bothersome black-outs caused by lack of available
electricity.
At
the same time, other ventures have been undertaken
such as hydraulic projects, reinforcement of food
availability and a national housing construction and
reparation plan; transportation is also expected to
gradually improve.
Some key products of the Cuban economy like nickel,
oil, tobacco, tourism and biotechnology are
continuing to do well.
However, agriculture and livestock farming have
shown poor results due to hurricanes and droughts,
but also to the inefficiency of the production chain
and the commercialization of the domestic market.
Along with the economic recovery —said the minister—
significant improvements have occurred in the most
important social indicators that had been affected
by the crisis since the first half of the last
decade.
"This new focus has allowed for maximum results with
minimum resources, maintaining social solidarity and
assuring development via the creation of
indispensable human capital, which requires an
economy based on knowledge," he added.
In
that context, education has become salaried work, in
an effort to recycle temporarily unemployed members
of society and create highly skilled workers.
In
Cuba the GDP cannot be calculated without including
social advances as a significant part of the
economy. Productive activities guarantee the indices
of well being necessary to maintain society.
The year 2006 closed with an infant mortality rate
of 5.3 per 1,000 live births and life expectancy
reached 76 years. Illiteracy remained at 0.2% and
the average education level was ninth grade.
Likewise, pensions increased and more than 110,000
housing units were built.
Unemployment last year stood at 1.9%.
Recuadro:
PROSPECTS FOR 2007
The minister of economy and planning predicted a 10%
growth rate with advances in all productive areas
including the recovery of the farming sector.
Special attention is to be given to the production
of food, the export of goods and services, and
tourism development. Regarding transportation, one
of the most troubled sectors due to the shortage of
vehicles, spare parts, fuel, and the deterioration
of roads, will begin to receive direct investments
in order to alleviate these difficulties.
Important agreements have been signed with China for
the reanimation of cargo and passenger
transportation, with the import of buses and trains.
Recently 14 economic agreements were signed with
Venezuela totaling a value of $100 billion which
includes investments in important areas such as oil
extraction in Cuban waters of the Gulf of Mexico, a
joint venture for the exploitation of nickel, and
the development of Venezuelan tourism to Cuba.
Energy and fuel conservation will be one of the
country’s principal sources of wealth; what is more,
for this, the minister stated, an increase in
economic efficiency and work productivity is needed.
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