FiveThirtyEight: US Ban on Travel to Cuba Might Actually Help Cuba’s Economy

In June, President Donald Trump enacted a series of policies indicating a tougher attitude toward the Communist government in Cuba, including Treasury Department audits of travelers to Cuba. Critics suggest such policies could harm the island nation’s economy. The financial reality is more complicated, argues Andrea Jones-Rooy for FiveThirtyEight. “Because the resorts are often financed by expatriates, tourism dollars flow to hotel owners abroad rather than filtering out into the local economy.” Indeed, Cuba’s economy contracted in 2016 despite strong tourist activity. Economists note that integrating tourism as one part of a diverse economy is key to sustainable economic growth, since disease and environmental damage can exacerbate the industry’s already volatile nature. Thus, an unintended effect of Trump’s policy is that “the lost revenue may give Cuba an incentive to develop other economic sectors” that build a robust and thriving middle class. – YaleGlobal