Today, Cuba says 'goodbye' to Castro's governance, the dynasty led the country for 59 years.
Yulia Makarova will tell us what the new economy on the Island of Freedom will be and whether there will be any changes in it.
Cuba without Castro is like 'Cuba Libre' without rum, but it will happen. The new leader of the Island of Freedom will probably be Miguel Díaz-Canel, the First VP of the State Council and the Politburo of the CPC member. Right now, Cuba's economy is rather contradictory. Havana says the GDP has grown by 1.5%. According to the UN ECLAC, it's only grown by 0.5%. But, according to independent experts' estimates, the country's economy has been in decline over the past 3 years. It's hard to fairly evaluate this situation. The country doesn't cooperate with the leading world organizations. No statistics is available.
The first thing the new leader will have to do is unify the currency. Currently, there are two payment systems: in national pesos, and in convertible pesos (1 peso equals $1). Further ahead are modernizations of transport and energy infrastructure, canceling plastic cards, development of private businesses, and attracting foreign investors. To facilitate the latter, Mariel Special Development Zone was established in 2014. It has tax exemptions, one-window service for document processing, and free money transfers. However, only 26 projects totaling $1 billion have been approved so far, that's not enough.
Tatyana Mashkova, the Vice-Chairman of the Russia-Cuba Business Council: "Cuba currently has Mariel Special Development Zone which attracts specialists from various countries, Brazilians are already there, Russia is on its way. Right now, they're discussing a new enterprise for manufacturing composite materials. Russian investors are very active in Cuba right now".
Another obstacle to overcome is Venezuela's financial difficulties. The Island of Freedom used to receive discounted oil from Hugo Chavez and Nicolas Maduro. However, after Washington had imposed sanctions against Caracas, the deliveries stopped. Even though Raul Castro had significantly decreased the debt, the issue still stands. Cuba had lived on loan from other countries for many years. Russia had eventually written off 90% of the debt, the Paris Club — 2/3 of the debt. Cuba will still have to pay the remaining debt off. The obtained advances are invested in the island's investment projects. However, their social sphere is great, with high-quality education and healthcare systems.
Igor Pshenichnikov, a RISS expert: "They are creating quality systems right now, people aren't starving, they don't have to choose between sending their child to school, paying for healthcare, or buying food. They have no troubles with education, healthcare, or provisions".
Cuba mostly lives on import, they don't have much to show for their exports: nickel, some fish, vegetables, tropical fruits, medical supplies, sugar, and, of course, cigars. However, half of their income is from tourism. 4,700,000 foreign tourists, including over 1,000,000 Americans, which is three times more than before, had visited Cuba last year. This year, Cuba expects over 5,000,000 travelers. The largest US airlines plan to increase the number of flights.
Things have been looking up since January 2015. The US has simplified financial operations and allowed owning business in Cuba. Trips to the Cuban island are allowed, the US telecommunication companies have expanded to the Cuban market. However, the new administration did a U-turn. Trump has called the normalization of relations deal between Obama and Raul Castro 'horrible' and canceled it. However, experts think that the US won't leave Cuba completely, it's not beneficial for them.
Inna Andronova, an International Relations Faculty professor in PFUR: "I don't think that the US has permanently postponed its return to Cuba. If this does happen, China may take its place very quickly. Right now, China is Cuba's largest trading partner. China accounts for 30% of the entire Cuban imports".
Considering the Chinese factor, experts think that Russia should enforce its Cuban presence. They already have our locomotives and cars — the new KamAzes and Ladas, along with Chines brands. The Rosneft and Zarubezhneft oil processing companies already work on the island. Farmers plan to supply their wheat there. And last, but not least, Russian tourists also go there, 100,000 of them per year.
