HAVANA: Cuba’s decision to include free health care and other social services in calculating gross domestic product has resulted in a 15 per cent jump in the size of the country’s economy, according to restated figures released this week.
While the government first announced the change in 2003, not until this week was any data available to see by how much the Cuban formula, called the socially sustainable gross domestic product, increased GDP value.
The annual statistical abstract for 2004, released this week, adjusts previously reported GDP figures by more than 15 per cent.
Output in 2000 at current prices is now reported at 32.685 billion pesos instead of 28.206 billion pesos in previous abstracts, a more than 15 per cent difference.
The GDP figure for 2001 is now 33.820 billion pesos and for 2002 it changed to 36.089 billion pesos, compared with 29.557 billion pesos and 30.680 billion pesos respectively.
Cuba began including free social services, subsidies and other social benefits in its growth calculations in 2003, claiming the formula used worldwide to measure and compare economic performance was designed for market economies.
Officials gave no further details.
“Social services are freely rendered to the population. . . no profit or added value is attributed to these services,” a recent Central Bank report, seen by Reuters, said of the traditional GDP formula.
The bank said salary figures used in cost calculations did not reflect the “true purchasing power” of the average Cuban wage because they did not take into account subsidised services provided by the state.
Cubans earn about $15 a month on average, but President Fidel Castro’s government says low wages are compensated by free education and sports facilities, very low rent, subsidized utilities and universal free access to health care and medicine.
The UN Economic Commission on Latin America and the Caribbean, or ECLAC, has been in discussions with Cuba over the new formula, debating whether the country can still be included in comparative regional statistical tables or should be reported on separately, a source close to the talks said.
“The Castro government reported that Cuba’s economy grew by 5.0 per cent in 2004 but ECLAC (which uses official Cuban data) said it increased only 3.0 per cent, or 40 per cent less,” Paolo Spadoni, an expert on the Cuban economy at the University of Florida at Gainesville.
The same gap is expected this year. Cuban authorities predict 9 per cent growth for 2005, while ECLAC is forecasting only 5 per cent.
“If ECLAC continues to rely on the traditional GDP formula this means that nobody really knows the details of the new Cuban formula,” Spadoni added.
Anicia Garcia, head of Havana University’s Center for the Study of the Cuban Economy, said she understood the concerns, but she added: “Cuba has criticised the traditional formula for some time because it is designed fundamentally for market economies, which we are not.”