Undeterred by the global catastrophe unleashed by its attacks on Iran, the U.S. government announced yet further economic actions against Cuba last week.
Since its military intervention in Venezuela, the U.S. has illegally blocked oil shipments from any country to Cuba. That has caused electricity blackouts, blocked tourism (including by the one million Canadians who visit there each year), caused immeasurable economic damage, and now endangers the lives of dialysis patients and others.
Now the U.S. is blackmailing other Latin American countries to expel Cuban medical experts who have long worked abroad –where they generate needed foreign earnings for Cuba, as well as supporting health care services in poorer countries. And Donald Trump revealed his ultimate imperial ambitions bluntly: “I do believe I’ll be… having the honour of taking Cuba… I could do anything I want with it.”
As Cuba struggles to survive, U.S. Secretary of State Marco Rubio (who has long advocated overthrowing its government) gloated that the suffering is due to the country’s internal economic failures: “The bottom line is their economy doesn’t work – it’s a nonfunctional economy.”
The U.S. has maintained an economic blockade against Cuba for over 60 years. During his first term, Trump tightened restrictions on private companies trading with Cuba (reversing partial liberalization that occurred under Barack Obama). Those restrictions include leveraging America’s position at the centre of global finance to impose huge penalties on global banks and other companies (even those without a direct presence in the U.S.) which dared to continue business in Cuba.
Not surprisingly, these new illegal U.S. attacks have caused a desperate crisis in Cuba. It’s beyond parody for the leaders of this U.S. imperial excursion to justify this continued sabotage of Cuba on circular grounds that Cuba’s economy “doesn’t work.”
But apart from the self-fulfilling arrogance of Rubio’s claim, his claim that Cuba’s economy “doesn’t work” deserves further investigation. Obviously, the latest U.S. actions have deeply disrupted everything in the Cuban economy. From a longer-term perspective, however, Rubio’s judgment is invalid – because an economy’s success must be judged by more than the value of its GDP.
Even under the 60-year blockade, if economic success is measured instead by the concrete conditions of human life, Cuba’s economy worked surprisingly well. Its record in achieving very high literacy, life expectancy, health outcomes, and other welfare benchmarks is well-known.
One concrete measure of this success is provided by the UN’s Human Development Index (HDI): an annual grading of countries according to three major criteria of human well-being: health (measured by life expectancy), knowledge (measured by average education), and material living standards. The latter is proxied in the UN report by gross national income (GNI) per person, a measure similar to GDP per capita.
In the most recent UN report (based on 2023 data), Cuba’s GNI score is low: just $8400 US per person. (This likely understates Cuba’s true economic output, due to challenges in evaluating output in a non-market economy.) However, overall human development in Cuba is pulled up by its world-class health and education performance. Its life expectancy (78.1 years) is just one year less than the U.S. (which boasts nine times the GNI per capita).
The appropriate comparator for Cuba is not the U.S., but other countries in the Caribbean and Central America (see table). With the exception of a few tiny tax havens, most countries in this region are poor – some desperately so – the result of geography, colonial history, climate, and resource endowment.
How to Tell if an Economy “Works” HDI Score HDI Rank GNI/capita ($US) Life Expectancy Average Education HDI-GNI Rank Canada 0.939 16 $54,688 82.6 13.9 9 US 0.938 17 $73,650 79.3 13.9 -7 Cuba 0.762 97 $8,415 78.1 10.6 30 Other Caribbean & Central America (19)a 0.756 95 $17,971 73.7 9.4 -1 St. Lucia 0.748 103 $20,900 72.7 8.6 -29 Source: Calculations from UN Human Development Report, Table 1.Includes 12 other Caribbean and 7 Central American states; unweighted average.
Cuba ranks in the middle of this group in the UN’s HDI scorecard. Its HDI score is slightly higher than the average of other countries in the region. Yet its GNI per capita (which makes up one-third of the HDI score) is less than half the regional average. Cuba’s superior health and education outcomes lift its overall human development above the regional average. The average Cuban is expected to live 4.4 years longer, and has received 1.2 years more education, than typical of other residents in the Caribbean and Central America.
The UN report also highlights another interesting metric: the difference between a country’s GNI score and its HDI score. If a country ranks higher according to human development than GNI, that number is positive: its success in converting material production into human well-being moves it up the human development rankings. If a country does relatively poorly in converting output into well-being, that number is negative: it slips down the human development rankings, because its GDP is not reflected in proportionate improvements in human welfare.
It turns out that Cuba ranks 30 steps higher by HDI, than by GNI. Only one other country in the world (tiny Tonga in the South Pacific, which ranks 39 steps higher by HDI than GNI) overperforms more by this measure than Cuba. In other words, Cuba does better than almost any other country in the world at translating economic output into human well-being, despite the U.S. attacks.
An instructive contrast is provided by St. Lucia, a Caribbean tax haven with a heavy presence of foreign banks and other tax-avoiding businesses. St. Lucia ranks 103rd in the world according to HDI, 29 places lower than its ranking by GNI (which is inflated by offshore profits flowing in to evade taxes at home). Marco Rubio surely believes that St. Lucia’s economy “works”: its GNI per capita is 2.5 times Cuba’s. Yet the typical St. Lucian lives poorer, dies five years sooner, and received two years less schooling than the average Cuban. So whose economy actually “works”?
Measured by how well material production translates into human well-being, Cuba’s economy “works” even better than America’s. America’s HDI ranking is seven spots lower than its GNI ranking. Yes, its GDP is huge and growing. Recently that growth has been solely due to huge profits and huge capital investments (mostly in massive data centres) by a tiny group of mega-technology companies. Little of that wealth trickles down to the average American.
As a result, the U.S. has significantly worse human development than its economic output would imply. Where human welfare is concerned, what you do with your economic output is just as important as how much you produce.
This insight is important for Canada, too. We rank nine spots better than our GNI would imply, putting us above the U.S. (despite 25 per cent lower GNI per capita). Hysterical right-wing complaints that Canada is now “poorer” than Alabama (a place where people die eight years sooner, poverty is rife, employment is weaker, and median wages are 20 per cent lower) ignore this vital point. Looking north, Trump and Rubio have tried to justify their attacks on Canada, too, on false grounds that our economy doesn’t “work”. This ignores the failure of the U.S. economy to meet the basic needs of so many of its people, despite its immense productive potential.
If anything, the UN rankings understate Cuba’s social achievements. While the UN gives it only a one-third weight, the use of GNI per capita as a proxy for material living standards is still fraught. It has several well-known problems: such as what it includes (eg. profit income not received by most people), what it doesn’t (eg. unpaid caring and community work), how it is distributed (per capita averages are distorted by very high incomes received by a small elite), and how it is measured (currency exchange rates are especially misleading for non-market economies like Cuba). With a better measure of the material standard of living for the typical (or median) person in each country, Cuba would rank higher.
And, of course, Cuba’s performance on all fronts has been badly damaged by decades of U.S. aggression. Imagine what its education and health outcomes could look like if it was allowed to develop in peace. As recently as 2015, before Trump’s first term (and his tighter sanctions), Cuba ranked 67th in the world according to HDI, 47 places higher than its ranking by GNI.
Any acknowledgment of Cuba’s education, health, cultural, and other human achievements elicits immediate denunciations from critics about its human rights and democratic situation. There’s lots to debate on that score – but Cuba is hardly unique in that regard. And America’s credibility in complaining about democratic failures elsewhere is collapsing with the rapid rise of authoritarianism at home.
Apart from being another good reason (among many) to condemn what the U.S. is doing to Cuba, critiquing Rubio’s claims constitutes an important pedagogical moment. It sparks us to contest how we understand the purpose of the economy (its ultimate goal is to meet human needs), and how we measure its performance.
Meanwhile, our own federal government’s shameful failure to condemn the U.S. oil blockade, and to clearly reject Trump’s ‘Donroe Doctrine’ (whether applied to Cuba, Venezuela, or Canada), does more than contradict Mr. Carney’s lofty words at Davos about “principled pragmatism.” Ottawa’s acquiescence to Rubio also effectively ratifies a very distorted and elitist conception of economics, and distracts us from its ultimate purpose: lifting the living standards of people.
Several Canadian solidarity campaigns are organizing material aid shipments to Cuba to support the island in the face of the U.S. blockade, including the Canadian Network on Cubaand CoDevelopment Canada. Please support them.
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