Under President Barack Obama, the new administration is seeking to open up the embargo against communist Cuba in what may help ease problems in its economy and subsequent close end fund (CEF).
Obama is allowing U.S. telecommunications firms to provide services to Cuba and is lifting restrictions on family ties, according to Reuters UK. Now, Cuban-Americans may freely travel to Cuba and sent remittance money back to family members.
Will the influx of tourism, money and visitors make it a place for investing? Foreign investors could look for a possible end to hostilities between the United States and Cuba, along with an eventual beneficial economic relationship.
Back in the 1990s, Cuba’s government initiated measures in resuming economic growth, sectoral diversification, inclusion into world markets and some corrections in internal economic imbalances, reports Elda Molina Diaz for MRZine. In the first few years, GDP contracted. After 1994, GDP continued to grow on average 4.3% up to the year 2000, and then 6.3% up till 2006.
What’s going on over there? Spending on education, health care and social security continued to rise and helped reduce unemployment for the last three years to just around 1.9%. Exports and imports of goods and services have been increasing. Services is now the major industry, accounting for around 70% in 2005. Agriculture counts for 4% and industry counts for 23%.
As stated by the CIA World Factbook, the average Cuban’s standard of living still remains lower than before the 1990s downturn. In 2008, Cuba’s GDP increased 4.3%. Cuba’s main trade partners include Venezuela, China, Spain, Canada and the United States.
Currently, there is no Cuba ETF or one in registration, but there is a closed-end fund (CEF). Should we start thinking about a Cuban ETF in the future?
- Herzfeld Caribbean Basin Fund (CUBA): up 34.5% year-to-date
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.