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    Cuba’s opening to the world has a problem much closer to home than
    Donald Trump
    Christopher Woody

    Donald Trump’s denunciations of Obama’s opening to Cuba while on the
    presidential campaign trail and his continued insistence on getting a
    “better deal” with the long isolated island nation have stirred worry
    that the president-elect will halt or undo Cuba’s rapprochement with the US.

    It remains unclear what kind of policy toward Cuba Trump will pursue,
    but Cuba’s work toward expanding its economy and engaging with the world
    faces an obstacle that is much closer than Washington.

    Cuba’s centrally planned economy has long been stunted by its relative
    isolation from the rest of the world, and the country has relied on its
    partners to support its citizens.

    “The economy of Cuba would’ve collapsed under its own weight long ago,
    as a consequence of population growth and an economy that couldn’t
    really accommodate that growth, had it not been for the state-sponsors —
    first the Soviet Union and then Venezuela — and now both of those are
    essentially out of the picture.” John Weeks, a professor of geography at
    the San Diego State University, said on a recent late-November edition
    of the Understanding Latin American Politics podcast.

    Cuba pursued some reforms in the 1990s, when the collapse of the Soviet
    Union severed the lifeline of the support that Havana had received from
    Moscow for much of the Cold War. With Hugo Chavez’s rise to power in
    Venezuela in the 2000s, the island nation again found an ideological and
    economic partner.

    But as Venezuela’s own economic woes have plunged it into crisis, Cuba
    has once more seen a vital ally fade. Improving relations with the US
    helped boost remittances and the tourism sector, bringing growth of
    close to 3% on average between 2011 and 2015, but Cuba’s economy is
    still largely tied to Venezuela’s.

    Raul Castro, who took over for his late brother, Fidel, in the
    mid-2000s, told Cuba’s National Assembly that the country’s economy
    shrunk 0.9% in 2016. That decline came in tandem with Venezuela’s, and
    it marked the first time since 1993 that official figures showed a fall
    in GDP.

    “Restrictions in cash and in the provision of fuel” — which Venezuela
    has long provided to Cuba and others in the region — “worsened in the
    second half” of the year, Castro said in late December.

    “Financial tensions and challenges that might intensify again in certain
    circumstances will persist, but we hope that gross domestic product
    (GDP) will grow moderately, by around 2 percent (in 2017),” the Cuban
    president added.

    Mayda Molina, left, an official of the Institute of the Cuban Civil
    Aviation, Eduardo Rodriguez, Cuba’s vice minister of Transport, and
    Alfredo Cordero, right, president of the Institute of the Cuban Civil
    Aviation, attend a news conference in Havana, August 29, 2016. Thomson

    In his remarks, Castro stressed that the country was “not going, and
    will not go, toward capitalism.” But he also called for a more welcoming
    attitude to foreign investment and for more local production to replace
    imports the country could no longer bring in.

    But any effort to support the economy with local production or to expand
    it with foreign investment is likely to be hamstrung by a significant
    and deep-seated issue: Cuba’s anemic population growth.

    “So Cuba faces what we might call … a very certain future of disaster
    if something doesn’t happen, because the population has reached a peak
    of about 11 million. UN demographers project that it’s going to go
    down,” said Weeks, who is the director of the International Population
    Center at SDSU.

    “The population size is going to go down, because the population is
    aging, and the birth rate had been below replacement level for quite a
    while,” Weeks added.

    Cuba’s birthrate fell to about 10 per 1,000 people in 2010, part of a
    long-term decline that has continued in the years since.

    Moreover, according to UN data, a considerable number of Cubans fall
    into the 40- to 55-years old age range, and about one-quarter of Cubans
    are older than 55. All of which means the country is poised to see a
    considerable number of elderly people in the coming years, just as
    declining birthrates draw down the working-age population.

    Paradoxically, Cuba’s population problem has to some extent been
    exacerbated by improving relations with the US. A wave of migrants have
    left the island over the last two years, many of them concerned that
    preferential immigration policies toward Cubans arriving the US would
    end with a new era of engagement between Washington and Havana.

    Cubans who’ve remained have shifted heavily into the country’s tourism
    sector, drawn by pay that exceeds the state-controlled salaries many
    other industries received.

    Entrepreneurship in that sector has surged (though that rising tide has
    not benefited all Cubans). And both remittances and the growing private
    sector have been bright spots for Cuba.

    The government has required proficiency in English for high-school and
    university students — a break from the Cold War policy that mandated
    Russian instruction.

    The Castro government has also loosened other labor policies to spur hiring.

    Some Cubans are optimistic about what’s to come, but, despite the
    government’s piecemeal reforms, young Cubans continue to see brighter
    futures elsewhere.

    “It’s very stagnant here,” Bryan Ponce, a 17-year-old accounting
    student, told journalist Tim MacGabhann in early 2016. “My plan is to
    get out of here as soon as I can, anyway.”

    “I work 14 hours a day as a porter at a hospital, and I can’t do
    anything.” Gabriel Iglesias, 19, told MacGabhann. “As soon as I can
    afford to, I’m leaving Cuba — I don’t care where.”

    With the country’s economic contraction, attitudes like that are sure to
    persist among Cuba’s youth, especially if the Castro government pursues
    painful policies in response economic struggles.

    Castro, in his remarks to the National Assembly, said achieving GDP
    growth in the coming year would require three steps: “guarantee exports
    and their opportune collection, increase national production to
    substitute imports, reduce all dispensable expenses and use available
    resources rationally and efficiently.”

    On the first point, as noted by UNC Charlotte professor Greg Weeks,
    “opportune collection” is unlikely to be forthcoming from Venezuela. And
    “reducing all dispensable expenses” is a phrase that may suggest
    unwelcome policies like rationing or other steps to limit domestic

    “So it’s not sure exactly what Raul is going to do, but he’s got to do
    something,” said John Weeks, of SDSU, “because the Cuban economy and its
    demographics paint a picture that, unless people come in, particularly
    American investors come in and rebuild the island, it’s going to crash.”

    Source: Cuba economic political opening demographic problems – Business
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