HAVANA: After registering impressive economic growth in 2005, Cuba now faces the challenge of devoting greater resources to improving the population’s quality of life, but without disregarding the need to fully develop the country’s productive base, economists say.

The government’s announcement that Cuba’s gross domestic product (GDP) had grown by 11.8 per cent in 2005 came as a surprise to a good many Cubans, who had just lived through a year of hardships provoked by a severe energy crisis, a continuing drought, several hurricanes and the stepping up of US sanctions against this socialist Caribbean island nation.

Cuba experienced high growth and finished the year with a balance of payments surplus of 800 million dollars, but in order to translate this into development, the country needs to expand its productive base to create more jobs and provide better salaries, said an economic researcher who spoke with IPS on the condition of anonymity.

He pointed to projects in the biotechnology sector — in which Cuba has achieved significant advances — which are being carried out by joint ventures with China, Iran and Malaysia.

“These programmes signify sustainable development,” said the researcher, adding that the challenge now is to create more industries to replace imports with domestically produced goods. “If everything goes towards consumption, then we will fill our bellies, but the growth will not translate into development that could improve public transportation, agricultural production, and the food, clothing and footwear industries, to mention just a few sectors whose expansion would result in greater individual well-being,” commented the economist.

Foodstuffs and fuel account for a large part of Cuba’s imports, which increased by 36.4 per cent in 2005. A total of 1.7 billion dollars was spent on food purchases abroad, according to figures from the state-run food importing company Alimport. Cuba’s GDP growth of 11.8 per cent outstripped that of Venezuela, a major oil producer that leads the Latin American region in GDP growth with nine per cent, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

Cuba’s economic growth last year even surpassed that of China, one of the world’s most dynamic economies, whose GDP has increased by an average of nine per cent annually for the last decade. One of the reasons for these impressive results is the fact that the Cuban government began in 2004 to include expenditures on social services like education and health in its GDP calculations. These sectors are normally excluded, because they do not generate revenues, but Havana devotes considerable resources to providing these services free of charge to all of the country’s 11.2 million inhabitants.

Moreover, this year’s GDP calculation included a sizeable amount for the “export of social services to a number of countries,” particularly Venezuela, commented sources from ECLAC. ECLAC did not include Cuba in its preliminary report on economic growth in the region, because it is still evaluating the Caribbean island’s results in accordance with the calculation methods normally used by the regional UN agency.

Statistics aside, Cuban families ushered in 2006 with high hopes that the country’s electric power generation crisis will finally come to an end, and that within six or seven months, frequent lengthy power cuts will be a thing of the past, as the government has pledged.

Castro estimates that by mid-2006, Cuba “will have more than enough electricity,” thanks to major investments in expanding electric power generation infrastructure. The government is also counting on successful results from such initiatives.—Dawn/IPS News Service