Who is stealing the money in Cuba?
I was doing some small and simple calculation with statistical information from Cuba given by the Cuban government and found something very interesting.
If you go to the Cuban government site http://www.one.cu/aec2007/esp/07_tabla_cuadro.htm
there you will find Average monthly salary in state-owned and mixed entities for each type of economic activity.
The table data is for the year 2007 the last year that appears on the records
| Agricultura caza silvicultura y pesca | 420 |
| Explotación de minas y canteras | 544 |
| Industrias manufactureras | 433 |
| Electricidad gas y agua | 508 |
| Construcción | 497 |
| Comercio restaurantes y hoteles | 353 |
| Transportes almacenamiento y comunicaciones | 418 |
| Establecimientos financieros seguros bienes | 493 |
| Servicios comunales sociales y personales | 398 |
This data will allow us to compute 447 pesos as the average salary paid by the cuban goverment in Cuba. If we assume an exchage rate of 23 cuba pesos per american dollar then that will give us a median salary of 19.44 dollars per month for a total of 233.32 dollars per year.
Now the reported GDP per capita for Cuba is about 4500 dollars see http://indexmundi.com/g/r.aspx?c=sp&v=67 and also see http://en.wikipedia.org/wiki/Cuba were the GDP per capita is 4800.
The GDP per capita should be about the same as the average salary and is normally computed as the GDP of the country divide by number of people producing in the country.
So what is so estrange?
Assume the more conservative figure of 4500 GDP per capita we can see that is not equal to 233.32 dollars in fact there are 4266 dollars missing in the average payment for any median Cuban.
Where is that money?
Is the revolution or revolutionary government stealing the money?
Or is that the cost of the so call “free” education and “free” health care? or other supposed gratuities mention by the revolution leaders as triumphs of the revolution?
If those things are free as they claim then where is the money?
March 23, 2009 at 9:30 pm
It’s an interesting problem to analyze or question to ask. There are a number of issues. One, there is no transparency in the accounting methods used by the Cuban government. Two, the methods (indicators) used to calculate productivity are not synonymous with methods used in the United States (ie GDP). The US government has had a field day manipulating GDP for it’s own political benefit – the Cuban government does or doesn’t release statistics that do that same for it. So, by the standards the Cubans use to calculate ‘growth’ the statistics released are most likely accurate. But growth in Cuba and growth in the US don’t mean the same thing.
One example: It is repeatedly reported in the world press (and sometimes in the United States) that the Cubans have maintained a low infant mortality rating. It is then repeated (and reprinted) that the Cubans even beat the United States in infant mortality.
Now, in the 60′s-80′s it is true that the Cubans did make progress in overall health care numbers – but in the 90′s everything changed.
Now the statistics the Cubans quote today are “true”, but it is true according to the methodology the Cubans use against the methodology the Americans use. For example, the Cubans will routinely “not count” a baby born who is less than 9 pounds (not the internationally recognized number). In order to get that weight, they will drain the urine or remove fluid from the lungs (this is not ‘standard UN statistical procedure’).
But since the issue of infant mortality has such a large political consequence, the doctors know what to do, even if it means giving the nurse the nod to move the weight scale or just write down a number that works (because infants born below a certain weight are considered to premature to be counted in the statistic).
So, according to these Cuban Communist Party methods – health care the prenatal care in Cuba is in fact, fantastic. If you want to use the same methodology that is used in the rest of the ‘world’, a number of authorities (Cuban) put infant mortality at double the US rate. The same with HIV.
So, in regards to money, when the smoke clears, the purchasing power of the Cuban peso (which has been destroyed) stands in direct relationship to the productivity of the state controlled enterprises whose costs are denominated in that currency.
Which means (long story short), a band of rabid monkeys hooked on ecstacy has a better chance of running a banana stand at a profit than the CCP.
Anyways, its a longer conversation I am sure – I’ll look forward to any of your posts on Cuba.
March 24, 2009 at 6:27 am
Mark, I agree that any government for their own benefit may fudged statistical information pertaining to the country in the case of Cuba it is very possible that they change economical information intentionally or unintentionally.
While I lived there I remember seen in the newscast about almost all enterprises production being satisfied at 120 percent and 140 % while we all could appreciate this could not be possible since whatever that enterprise was supposed to produce we have a scarcity of.
The things they can not fudge are the salaries they paid since we can go around and ask a few Cubans and take an statistical sample and compute it and they can not lie about the rate of exchange between peso and dollar.
The GDP per capita that is a quantity that can be estimated they themself because of their normal fudging with number may not probably know themself the actual numbers. We could still figure something out seen the standard of living in Cuba and comparing with similar countries.
The actual GDP per Capita if we follow the calculations above in my post should be about 233 dollars. That will place Cubans at the bottom of the list of GDP per Capita in the world just above the Palestinian and the Gaza Strip. (Notice those are war zone places)
If you look at pictures of Cuba Many of them look like from a war zone. So it does match our expectations!
It seems to me their own government have being at war with their own citizens. I believe this is an unintended consequence of their policy of trying to control everything in Cuba.
I visited your blog I will also be reading your post!