The post-Castro era is here and everyone is wondering what is in store for Cuba. The country has been struggling financially for the past two decades. The U.S embargo was a significant contributor to this harsh reality, and it still is. There is also the fact that the country has challenges with international relations since most potential investors have had to approach its government with caution. However, Cuba is a beautiful country with beautiful hardworking people. Despite the challenges it has been facing, there is a ray of hope, especially considering some recent events that have taken place in the country. It is not an easy journey, but with the right mindset and moves, Cuba can recover and surprise the world.
The Steep Climb
Cuba has a steep climb to a growing economy. To begin with, a recent post from brooking.edu indicates that the country has a fiscal deficit beyond 12% coupled with a trade deficit that cannot be ignored, which is partially an effect of the current Venezuela crisis. Furthermore, its dual currency system presents a challenge of its own. Most countries have a challenge with just a mono-currency system, but Cuba has two currencies. It makes it difficult for its currencies to gain value. There is also the U.S embargo that was meant to undermine the Castro regime. It was a move that seemed right at the time it was introduced, but rather, it adversely affected the country’s economy and gave it an excuse for not performing well in that sector. Moreover, the country also has to deal with investment barriers, particularly when it comes to international relations. I have already mentioned the U.S embargo; other hindrances of this nature include bureaucratic restrictions, constraints on eligibility for foreign direct investment, and non-involvement with international financial institutions. These investment barriers have discouraged investors who could make the most difference for the country’s economy. These are just some of the challenges that Cuba has been dealing with. However, the country seems to know the position it is in and has taken some measures to alter its fate.
Source: Lera Blog