Cuba Military Expenditure

Cuba’s defense budget shrank from 9.6 percent of gross domestic product (GDP) in 1985 to 2.8 percent of GDP in 1995. Over the past decade, it has remained under 4 percent of GDP. Cuba does not make public its defense spending, but expenditures on defense and internal security for 2005 were estimated at US$1.7 billion, compared with US$1.1 billion in 2003, US$900 million in 2002, US$789 million in 2001, and US$720 million in 1997. The 2003 estimate of US$1.1 billion was the equivalent of US$97 per head of population and US$23,157 per member of the armed forces. The army has become more self-reliant through greater involvement in the economy, particularly in agricultural food production, transport, and tourism (through the military-linked Gaviota Tourism Group, S.A.).

As of 2005, CIA estimated that the current exchange rate budget was $694 million. As of 2011 the CIA estimated that Cuba had a PPP GDP of $110,800,000,000, of which 3.8%, or $4,210,400,000, was devoted to the military. Purchasing power parity (PPP) exchange rates are the value of goods and services produced in the country valued at prices prevailing in the United States. This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries.

The national currency, consisting of 100 centavos. Between 1914 and 1971, the peso was exchanged at parity with the United States dollar. Since the early 1960s, the peso has not been exchanged freely in the international market. The Cuban Convertible Peso is the currency in Cuba (CU, CUB). The official exchange rate during the 1972-86 period averaged 1.23 (in pesos per United States dollar) and since 1987 has been reported by the Cuban National Bank to be 1.00. The exchange rate for the Cuban Convertible Peso was last updated on April 3, 2013 remained 1.00.

Since the 1960s, there has been an active black market for dollars in Cuba, with the black-market exchange rate fluctuating between six and fifteen pesos per United States dollar. In the 1990s, the value of the peso in the black market fell drastically. The unofficial exchange of the peso for the U.S. dollar has been estimated (in pesos per United States dollar) as follows: 1991, twenty; 1992, thirty-five; 1993, sixty;June 1994, 100; August 1994,150; December 1994, forty-five; July 1995, thirty; September 1995, twenty-five; July 1996, twenty-one; December 1996, twenty. In the late 1990s, the exchange rate in government-operated Casas de Cambio was twenty to twentytwo pesos for one United States dollar.