Cuban Business & Tourism

Spending these two weeks in Cuba has given us not only an amazing opportunity to experience Havana and the Cuban countryside, but also an incredible experience getting to learn a little about the Cuban culture, history, and economy (largely from our fantastic bilingual guides on both our health care and biking trips!).

We’ve been intrigued to learn about the changes made by the Cuban government to their economic policies over the past 10 years.  Since the 1959 Revolution, virtually all business have been owned & operated by the government, which in turn offers a full range of social services to everyone, including free health care, education, child care, & even food rations (the picture is one of their ration cards & the small bodegas where Cubans get their staples).

Following the imposition of the US embargo in 1961, Cuba developed close ties to Russia and benefited heavily from Russian economic and trade support – a relationship interestingly mirrored in the predominance of the Russian Embassy building (arguably the scariest looking embassy building ever!).

Russian Embassy in Havana

Following the collapse of the USSR in 1989, that support suddenly disappeared, and the Cuban economy plummeted, marking the start of what was dubbed the “Special Period” from ~1990-2006, a period of severe economic austerity & belt-tightening (figuratively and literally – it’s estimated that the average Cuban lost 25% of their body weight during those years!).

Recognizing a need for new economic drivers, the government relaxed its attitude towards tourism and private business around 2008, and launched efforts to attract tourists to its historic cities and beaches.  The effort has apparently paid off, with 2M visitors in 2015, 3.5M last year, and an estimated 5M projected for 2017 – a growth that is apparent with the huge number of tour buses and tourists we saw in every Cuban city square (Canadian, UK, and German tourists being the most frequent) .

Cuba’s launch into tourism was coupled with a relaxation of their rules on private business, with ownership of private businesses first allowed by the government in 2008.  Those businesses are small mostly related to tourism, with an explosive growth in the number of “paladares” (restaurants build in private homes) and “casa particulares” (rooms for rent in private homes)…

but also includes tiny businesses on the streets selling everything from fresh fruit to freshly butchered meat! (and of course, corner flea markets – stunning, I know, that Lee managed to find one)

The government still owns all major businesses, hotels, tour buses, and tour companies, but one definitely gets the feeling that change is in the air.  Having seen how starved the country is for resources, I’m all for bringing more resources into the country but will be intrigued to see how they manage the change in a way that maintains their strong socialist values.

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