Leadership and Democracy LabWestern Social Science

Introduction to Tourism in Cuba

Contributors: Erica Berry, Rhea Kuma, Kelsey Lai

Team Leader: Emily Dolan

 

With a history of economic and political challenges, the tourism industry in Cuba has suffered. However, in recent years, tourism in Cuba has begun to grow, a result of a change in political policies. Tourism is one of the main sources of revenue for the country, and common risks are rooted in relations between Cuba and other countries. 

 Political Situation

Cuba is a one-party Communist state, with a totalitarian government that controls most of public life in Cuba. In the early twentieth century Cuba was governed by a series of corrupt and ineffective administrations that changed often. Most recently, Raul Castro has been in power, and there have been a series of political and economic reforms, such as the liberalization of foreign travel restrictions and legalization of the purchase and sale of private property in 2011. While there has always been corruption within the Castro governments, socialism has been the stable form of government since 1959 in Cuba, with little indication this will change soon. This is in part because the Cuban government silences dissent and protest, and limits freedom of speech and civil liberties.

Cuba, in terms of stability, is facing an uncertain period which can be linked to upcoming elections that are meant to select a new President, economic difficulties, government restriction of freedom of the press, and unstable relations with the US. The World Bank provides data on Cuba’s level of stability from 1996 to 2015; countries are ranked on a scale that ranges from -2.5 for the least stable countries to 2.5 for the most stable countries. On average Cuba was given the value of 0.32 points indicating that it is neither unstable nor stable.

The one-party communist state is headed by its President Raul Castro, who will leave once a successor is chosen in February 2018, after serving two terms.  However, he is still expected to head the only legal party in Cuba, the Communist Party. Municipal elections, the first step towards selecting a new President, was set to take place in October. Due to Hurricane Irma, elections have been pushed back until November. As municipal elections are the way for Cuban citizens to participate directly in their government, Cuba has been seeing an unprecedented amount of candidates.

Traditional media is run by the state and is used as a tool for the government to express its political goals and shut out critics. Although independent press is considered illegal, there has been an increase of independent press outlets established in 2016. Journalists from these independent outlets include citizen journalists and independent bloggers.

Diplomatic engagement with countries like the US has been tense. In 2016, former President Barack Obama made an official state visit to Cuba for the first time in over 80 years. By re-opening diplomatic relations with Cuba, and lifting travel and business restrictions, the US seeks to weaken the socialist regime. Under President Donald Trump, relations have become strained again, as he blamed Cuba for mysterious sonic attacks that have left US diplomats sick. Earlier in October, the US expelled 15 Cuban diplomats after the US told non-essential US diplomats from its Havana embassy to go back home following the attacks.

 Economic Situation

 The Cuban economy is governed by principles of socialism and has struggled throughout the years. The GDP over the last three years has both grown and decreased, at 1%, 4%, and -0.9% in 2014, 2015, and 2016, respectively. Though Cuba is socialist, in recent years there have been movements towards economic changes. In 2011, the government held the first Cuban Communist Party Congress in over 13 years, and recently Cuba has seen an update to their economic model, allowing private ownership and sale of real estate and new vehicles. Regardless of these economic reforms, the state is still extremely prevalent, and it is estimated that in 2012 the government was the source of over three quarters of Cuba’s economic activity. It is important to note that a large portion of Cuba’s economy is imports, with 29.9% of imports coming from China. Ultimately, although there have been a number of positive changes made to the Cuban economy, there are still a number of economic barriers in place.

 Tourism Outlook

 Tourism in Cuba is a booming industry that is expected to experience sustained long-term growth. The industry has experienced steady growth since 1995. In the span of one year the number of tourists increased from 3.5 million in 2015 to 4 million in 2016, representing growth of 13%. This is augmented by the Obama administration loosening restrictions on American travel to the island. In 2016 tourism contributed $8.9 billion to Cuba’s GDP, which is a 9.6% share of total GDP, and provided 461, 900 jobs. In 2017 it is expected that the contribution of travel and tourism to Cuba’s GDP will grow by 2.8%. Tourism in Cuba has the possibility to generate over $10 million in exchange revenues in 2017, an amount that is twice the amount generated by all of Cuba’s merchandise exports. As such, tourism is the most dynamic part of Cuba’s economy, with an opportunity for growth.