By Michael Reddell 28/11/2016


Fidel Castro is dead. 

Sadly, the same can’t be said for the brutal regime that has controlled Cuba for 57 years now –  the regime that suppresses speech, religion, and the exercise of democratic freedoms that we take for granted; the regime that executed thousands of its political opponents and which, to this day, imprisons many of those brave enough to stand against it; the regime that suppresses free economic activity; the regime that actively tries to stop its own people leaving.

There have been plenty of awful Latin American regimes in the last 100 years or so, but fortunately most of the worst have now passed into history.  But not the Cuban regime.  I won’t rejoice in anyone’s death, but consider what type of man this was:  Fidel Castro had enthused about the idea of a nuclear attack on the United States, and had to be put in his place, in no uncertain terms, by Khrushchev.

Last week I happened to be reading Stephen Ambrose’s history of the Eisenhower presidency –  the last non-politician to become President of the United States.  Never having read that much about Cuba, I was surprised to learn that US government agencies –  and this at the height of the Cold War –  were genuinely uncertain what to make of Castro at first, were reluctant to conclude that he was a communist, and (in parts of the government at least) were initially reluctant to see him toppled, for fear that others, notably his brother (the current President of Cuba) would be worse.

Good times, bad times

But this blog is mostly about things economic.  I knew that pre-Castro Cuba had been a reasonably prosperous place by Latin American standards.  The southern countries (Chile, Argentina and Uruguay) were richer, and so was oil-abundant Venezuela.  But Cuba in the 1950s is estimated to have had real GDP per capita higher than, for example, that in Bolivia, Brazil, Paraguay, Honduras, El Salvador and Ecuador.   Most Cubans –  including Castro –  were descendants of Spanish migrants, and in the mid to late 1950s, real GDP per capita in Cuba is estimated to have been around 75 per cent of that in Spain.

What has happened since then?  Like all countries, Cuba has had its relatively good and relatively bad periods –  the latter, notably, after the fall of the Soviet Union.  And data sources for such a controlled economy aren’t that abundant, or probably that reliable.  However, Angus Maddison’s international database does have real GDP per capita estimates (all on a PPP basis) for Cuba from 1929 through to 2008 (the successor Conference Board database doesn’t include Cuba).

Here are estimates comparing real GDP per capita estimates for Cuba with those for other various other countries/groupings.  Here I’ve shown averages for (a) the thirty years prior to the Castro takeover, (b) the 1950s immediately prior to the takover, and (c) the forty years from 1968 to 2008.   And I’ve shown comparisons between Cuba and the United States, Spain, and New Zealand and also those with Maddison’s Western Europe measure and his measure for the eight largest Latin American countries for which there is annual data all the way back to 1929.

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Using these averages masks the shorter-term volatility, but in looking at the Castro period the picture wouldn’t be much different if, say, I’d used just the 2008 observation rather than the 40 year average.  The big decline in Cuba’s economic fortunes took place in the 10 years after Castro’s revolution.

Against all these countries/groupings, Cuba’s performance in the Castro period has been worse than it was previously –  dramatically so when compared to the Latin American grouping, Western Europe, or to Spain, the former colonial power.

Having said that, I was a little surprised that the deterioration had not been even more marked.  If the numbers are roughly reliable –  and that is a significant caveat – then in 2008, Cuba’s real GDP per capita was still higher than those in El Salvador, Honduras, Nicaragua, and Paraguay.

Looking around for something a little more up-to-date, I found the World Bank had data showing PPP-adjusted current price per capita GDP estimates for the period 1990 to the present.  In Cuba’s case, “the present” only being up to 2013.

This is how Cuba has done relative to New Zealand over that period.  I’ve just set both countries’ GDP per capita equal to 100 in 1990 and so shown the relative growth since then.

cuba 2.png

It is a little depressing.  1990 was just before the collapse of the Soviet Union, and you see the subsequent sharp fall in Cuba’s performance in the early 1990s.  But over the entire 23 years, on this measure, there has been no change in New Zealand’s performance relative to that of Cuba.

(Here is a link to a post that puts Cuba’s economic performance in a rather more gloomy overall light.  I think it is a little unfair to compare any country’s performance to world GDP over recent decades, given that China is a significant chunk of the world and China had –  and has – so much ground it had to make up after the self-destruction over much of the 20th century.)

Of course, one of the other salient features of Cuba’s experience since Castro took power was the emigration to the United States.  Cuba’s population in 1958 was around 6.8 million.  Current estimates are that the Cuban-American population is around 1.2 million.  That outflow –  which would, presumably have been much larger if the Cuban government had not put tight exit controls in place –  was large enough that Cuba’s population growth in the 50 years after the revolution was the second lowest of all the Latin American countries Maddison reports data for (only Uruguay –  with its own large scale emigration-  had a lower rate of population growth in that period).

Net emigration

New Zealand is, of course, another country that has experienced a large scale net emigration of our own citizens.   Since 1958, it is estimated that 975000 New Zealand citizens (net) have left New Zealand permanently (and in 1958 our population was only 2.3 million).

I don’t want to make much of the Cuba/New Zealand comparisons. They can be crass, and risk trivialising the appalling oppression, persecution, and suffering of the people of Cuba, many of whom had –  and have – no way of escape.  And I’m not sure I believe the Cuban GDP numbers anyway –  and I see Tyler Cowen also highlights that issue.

But, equally, it is too easy to come to simply take for granted the massive outflows of our own people over recent decades, and the disappointingly poor relative economic performance.  Freedom is a great blessing, as is democratic choice (and legitimate exit options likewise), but our democracy –  and decades of chosen leaders –  has kept on failing our people.  We really should have been able to do a great deal better.