weighted score 2.9 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Cuba
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Cuba as a sourcing destination.
Labour cost competitiveness
8
Extremely low wages (state-set average ~USD 30-40/month). However, this reflects state economic control and dysfunction rather than genuine market-based cost competitiveness.
Supply base depth
2
Extremely narrow manufacturing base. Only biotech/pharma has genuine depth and technical capability. Sugar, tobacco, nickel/cobalt are commodity-level. No industrial supply chain clusters.
Logistics & infrastructure
2
Chronic energy shortages with frequent blackouts. Port infrastructure dated except Mariel zone. Fuel rationing. Road and rail infrastructure severely degraded by decades of underinvestment.
Workforce skills
5
Highly educated population (near 100% literacy). Strong medical and biotech talent. Engineering and technical skills present but constrained by state allocation system and emigration.
Scalability
3
US embargo severely limits scaling potential. State-controlled economy restricts private sector growth. Small domestic market (~11 million). Energy and input shortages constrain production expansion.
Ease of doing business
1
US embargo creates the most restrictive trade environment globally. State-controlled economy. No independent judiciary. Foreign investment requires government approval. Single-party state.
Trade access & tariffs
1
US comprehensive embargo — strictest sanctions regime globally. EU PDCA but no FTA — MFN tariffs apply. Helms-Burton Act creates secondary sanctions risk for third-country companies.
Sustainability baseline
1
Low emissions per capita by default (limited industrial activity). But aging thermoelectric plants, fuel shortages, and no meaningful renewable energy deployment. Environmental data limited.
Innovation & IP
3
Genuine biotech innovation capacity (vaccines, monoclonal antibodies). But innovation is state-directed and concentrated in a single sector. Broader innovation ecosystem non-existent due to economic isolation.
Quality standards
3
Biotech/pharma quality internationally competitive (WHO prequalification for vaccines). Cigar quality premium. Other sectors commodity-standard or below. Limited third-party audit access.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage trajectory
- Cuba's state-controlled economy sets wages centrally. Average state salary is approximately USD 30-40/month. The 2021 monetary reform (Tarea Ordenamiento) increased nominal wages but inflation eroded gains. Labour costs are extremely low but reflect state control rather than market competitiveness.
- Total cost of ownership
- Despite extremely low wages, total cost of ownership is elevated by US embargo restrictions, limited input availability, chronic shortages of fuel and raw materials, and absence of normal trade finance mechanisms. Supply reliability is a major cost driver.
- Labour market dynamics
- Cuba has a highly educated workforce — particularly strong in medical/biotech sectors. Literacy rate near 100%. However, the state controls labour allocation and independent employment was largely prohibited until 2021 MSME reforms.
- Cost-sensitive categories
- Biotech/pharmaceutical exports (vaccines, generics), sugar, tobacco (cigars), nickel, and cobalt are the main export categories. Labour cost is not the binding constraint — access, sanctions, and supply reliability are.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Manufacturing breadth
- Cuba's manufacturing base is extremely narrow and state-controlled. Pharmaceutical/biotech is the standout sector with genuine technical capability in vaccines, monoclonal antibodies, and generics. Sugar processing, tobacco, and nickel/cobalt mining are the other main industrial sectors.
- Port infrastructure
- Mariel Special Development Zone (opened 2014) is Cuba's most modern port and industrial facility, developed with Brazilian investment. Havana port handles general cargo. Overall port infrastructure is dated but functional for current trade volumes.
- Energy infrastructure
- Cuba faces chronic energy shortages. Power grid relies heavily on aging thermoelectric plants and imported fuel (historically from Venezuela). Rolling blackouts are frequent, especially during summer months. Solar and wind capacity minimal.
- Risk note
- Infrastructure is severely constrained by decades of underinvestment under the US embargo. The Mariel zone represents a modernisation effort but overall industrial infrastructure remains far below regional standards.
Trade Access & Business Environment
Trade Access & Business Environment
- US embargo
- The US has maintained a comprehensive embargo on Cuba since 1962 — the strictest and longest-running sanctions regime globally. The embargo prohibits most US trade, investment, and financial transactions with Cuba. Third-country companies face secondary sanctions risk under the Helms-Burton Act (Title III).
- EU relationship
- The EU-Cuba Political Dialogue and Cooperation Agreement (PDCA) entered into force in 2017. The EU does not impose comprehensive sanctions on Cuba but maintains its Common Position framework. No EU-Cuba FTA — MFN tariffs apply.
- MSME reforms
- Cuba legalised micro, small, and medium enterprises (MSMEs) in 2021. Over 10,000 MSMEs have been registered. This represents the most significant private sector opening since the revolution but the state still controls the commanding heights of the economy.
- Regulatory environment
- Single-party state (Communist Party of Cuba). No independent judiciary. Foreign investment requires government joint venture approval in most sectors. Regulatory framework opaque and subject to abrupt policy change.
Innovation, IP & Quality
Innovation, IP & Quality
- Biotech excellence
- Cuba's biotech sector is a genuine area of strength. BioCubaFarma produces vaccines (including Abdala and Soberana COVID-19 vaccines), monoclonal antibodies (Nimotuzumab for cancer treatment), and generics. Cuba has produced more biotech patents per capita than most developing countries.
- Medical sector
- Cuba's medical training system is world-renowned. Cuba exports medical services (doctors deployed globally) as a major revenue source. Medical device and pharmaceutical quality standards in the biotech sector are internationally competitive.
- IP environment
- Cuba is a member of WIPO and has IP legislation. Enforcement is through state mechanisms. For foreign partners, the main IP risk is the state-controlled nature of all commercial relationships rather than traditional IP theft.
- Quality standards
- Pharmaceutical/biotech quality is high by developing country standards — WHO prequalification achieved for several vaccines. Tobacco (cigar) quality is globally premium. Sugar and nickel quality is commodity-standard.