Trumps Ban On Travel To Cuba Might Actually Help Cubas Economy
JUL. 27, 2017 AT 6:00 AM
By Andrea Jones-Rooy
Filed under Cuba Embargo
When President Trump announced last month that he would re-impose strict limitations on Americans’ travel to Cuba, he said the policy would put pressure on the island nation’s communist government. Many critics, however, said the real victims of the policy would be the Cuban people. The logic of this argument is simple: By cutting off the recent influx of American tourists, who had flocked to the island after President Barack Obama eased travel restrictions during his second term, Trump’s policies could harm the many privately owned small businesses that sprung up to serve them. In turn, these small business owners will be less able to purchase from other businesses on the island, further hurting Cuba’s fledgling private enterprises.
But in reality, the cause and effect may not be so simple. Recent research suggests not only that tourism does not necessarily lead to economic growth, but also that it can in some cases make a country worse off. That suggests that restricting the flow of American tourists might not hurt Cuba — and could even help.
Economists broadly agree that in the short term, tourism brings money into a country that would not otherwise be there. But tourism is not a magic bullet. In other Caribbean nations, for example, there is a clear correlation between tourism and economic growth: Countries with more tourism are wealthier, on average, than those with less. But if tourism alone were enough to turn a weak economy into a strong one, the Caribbean would be far wealthier than it is. In reality, roughly a third of the region’s population lives below the poverty line.
More:
https://fivethirtyeight.com/features/trumps-ban-on-travel-to-cuba-might-actually-help-cubas-economy/
