Cuba’s economy was long held down by dictator Fidel Castro but his younger brother, Raul Castro, the new acting President of Cuba, has enacted some small reforms that are stepping stones toward economic improvement. He has legalized the sale of computers, DVD players and cell phones, allowed Cubans to stay at hotels previously reserved for tourists and, most recently, lifted the wage ceiling for employees in Cuba.
The wage restriction was a major damper on production in Cuba and one of the strongest sources of complaints from Cuban workers because they were paid the same regardless of how hard they worked. Naturally if employees can’t make more money the harder they work, there is little motivation for them to exceed the absolute minimum for productivity. The fact the Raul Castro has heard these complaints and is taking action is a great sign.
Cuba has been off limits for a long time for American investors, and there is much untapped potential in the country. For more insight about Cuba’s future investment potential, read my post: Fidel Castro Resigns: What’s Next For Cuba?
I look forward to more changes in Cuba’s economy and hope that it won’t be much longer until Cuba and the U.S. can reconcile their past differences.