Cuban boom said fueled by jump in foreign exchange
Wed Nov 29, 2006 1:21 PM ET
By Marc Frank
HAVANA, Nov 29 (Reuters) – Cuba’s foreign-exchange earnings swelled by
some $3 billion this year due mainly to a jump in service exports, a
government source with access to trade data said on Wednesday.
The communist-run country’s balance of payments will be in the black for
the third year running as a result, he said, without saying by how much.
“Increased nickel prices and pharmaceutical exports resulted in more
than a $500 million increase over last year’s $2 billion in exports, and
service revenues jumped by over $2.5 billion to around $7.5 billion,” he
told Reuters, asking his name not be used.
Cuba apparently has spent most of the increased revenue on
infrastructure and machinery. This includes $1 billion on an energy grid
and hundreds of millions of dollars on waterworks and transportation.
It also has boosted imports of food and some consumer goods.
Economy and Planning Minister Jose Luis Rodriguez recently said imports
were up by more than 27 percent this year over $7.5 billion in 2005.
Rodriguez said this week growth would be 12.5 percent this year, up from
11.8 percent in 2005, based on a locally devised formula that estimates
the market value of free social services and subsidized goods and
services and massive medical and other services exported mainly to
Cuba includes tourism and related activities, some communications, the
export of medical and other professional services and the training of
some foreigners in Cuba, such as Chinese Spanish-language students, as
Tourism has stagnated this year, so increased service revenues would be
from other sources.
Since the United States began more strictly enforcing its decades-old
trade embargo on the country in 2004, always scarce economic information
has become even harder to come by. Data, when provided, often differs
from official to official and report to report.
However, the trend is clear since Cuba signed an agreement with
Venezuela in late 2004 bartering and selling services for oil and also
began receiving more credit from China.
Cuba reported imports of $5.5 billion in 2004 and nontourism service
income of around $1.5 billion, compared with imports approaching $10
billion and nontourism service revenues of more than $5 billion this
year, Reuters estimates.
Cuba’s GDP fell 35 percent when the Soviet Union collapsed in 1991,
depriving it of massive subsidies and resulting in shortages of food,
energy, transportation and capital.