04 September 2007

Next to Last

The Heritage Foundation just came out with its 2007 Index of Economic freedom.

Cuba beat out only North Korea.

Cuba's economy is 29.7 percent free, according to our 2007 assessment, which makes it the world's 156th freest economy. Its overall score is 2.5 percentage points lower than last year, partially reflecting new methodological detail. Cuba is ranked 29th out of 29 countries in the Americas, and its overall score is so low that it is less than half of the regional average.

It's hard to imagine that the same Cubans that succeed and prosper against the odds here in the United States live in the second least economically free country in the world.

Some Observations:

Trade Freedom - 60.2%

Cuba's weighted average tariff rate was 9.9 percent in 2004. Procedures for the allocation of hard currency and centralizing of imports have resulted in delays and bottlenecks, and customs corruption is common. Consequently, an additional 20 percent is deducted from Cuba's trade freedom score to account for these non-tariff barriers.

Trade freedom? Excuse me but Cuban citizens cannot trade; only the government can trade.So the average tariff benefits the regime and its corrupt leaders-60.2% seems like a generous score .

Fiscal Freedom - 62.8%

Cuba has a high income tax rate and a moderate corporate tax rate. The top income tax rate is 50 percent, and the top corporate tax rate is 35 percent.

Wait! Top income tax rate at 50%?!?. So if I make $15 a month as an Accountant in Havana working at Sol Melia, and the regime receives $750 a month for my services are you telling me that the $735 they pocket isn't really a 98% tax rate that they keep in order to be able to indoctrinate my kids with their "free" education and access to free medical diagnosis ? (because health care includes medicines and treatment which are hard to come by in Cuba)

Monetary Freedom - 65.8%

Inflation in Cuba is moderate, averaging 5 percent between 2003 and 2005. Relatively moderate prices explain most of the monetary freedom score. The government determines prices for most goods and services and subsidizes much of the economy (although the retail sector has some private and black market activity that is not government-controlled). Consequently, an additional 20 percent is deducted from Cuba's monetary freedom score to adjust for measures that distort domestic prices.

OK, so the regime fixes prices and supply with the money they make by not paying a fair wage and in order to survive, Cubans have to get access by hook or crook to Convertible Pesos- the other currency- to buy in the black market where the cost of goods are set by supply and demand yet this doesn't equal into the inflation calculation?

Conclusion: Economic freedom doesn't exist in Cuba. What exists is economic slavery to the Castro regime.

1 comment:

Tio Remus said...

Internet Freedom is worth a mention, too,
like these Reporters Without Border reports:
http://www.rsf.org/country-47.php3?id_mot=109 !(Annual report 2007)

http://www.rsf.org/IMG/pdf/rapport_gb_md_1.pdf !
(Special report Oct 2006)

A funny news item exposing Cuban internet propaganda can be found at:
! Bill Woodcock of Packet Clearing House response to Cuba's Juan Fernandez (Commission of Electronic Commerce)