Saturday, August 12, 2006

Cuba's past and future populations

For most of its post-Columbian history, Cuba has had a relatively small population, numbering barely more than a quarter-million people by 1792 and only reaching the total of one million people in the 1840s. During the first three centuries of Spanish rule, Cuba was neglected in preference to the much richer mainland; in the final century of Spanish rule, a Cuba that was now one of Spain's major colonies prospered thanks to an open economy dominated by its sugar plantations. Cuba's white population was bolstered first by the immigration of French refugees from the future Haiti then by substantial immigration from metropolitan Spain, complementing a very large Afro-Cuban population and the substantial Chinese Cuban community created, like the other Asian immigrant communities in the 19th century Caribbean, to replace the labour that enslaved Africans were once forced to provide.

The incessant wars of independence in the late 19th century slowed Cuba's growth somewhat. After Cuba became independent, the 1899 census recorded a total population of 1.57 million people, 89% of whom were born in Cuba. This Cuba was still at a very early

Abel F. Losada Alvarez' 2000 paper "Demographic change and economic growth in Cuba (1898-1958)" (PDF format) provides an excellent outline of the first six decades of independent Cuba's demographic history.

Let us bear in mind that most works on economic growth in developing countries locate the development threshold, demographically speaking, at a life expectancy between 50 and 55 years of age and a net reproduction rate between 2.0 and 1.75. In 1953, Cuba was already on its way to the so-called "modern population growth", with a life expectancy slightly over 60 for both sexes and a NRR of around 1.75.

In the 1950-1955 period, Cuba was clearly outside the "Strategic Growth Territory" of Latin America at that point, in an intermediate position between the Western European "territory" of the thirties and that of the whole of Latin America around 1985-90. These stages of demographic development have been conformed by the confluence of modernization factors and elements which have conditioned the rhythm and variety of this modernization.

Alvarez suggests that Cuba's population was helped along in its "demographic modernization" by the immigration of more than a million people in the three decades after independence, including 735 thousand immigrants from Spain. These Spanish immigrants, mostly from the regions of Galicia and Asturias in the northwest of Spain and from the insular Canary Islands, had already adopted for themselves many of the contraceptive and other behaviours typical of populations advanced on the demographic transition and communicated them to Cubans. Other factors--the growth of a culture of mass media and mass consumption aided by the nearness of the United States, Cuba's increasing urbanization, and a rapidly rising standard of living--played their standard role. By the time of the Cuban Revolution, despite continued high rates of net immigration from Spain and the Caribbean as well as a high birth rate, Cuba's population was starting to stabilize.

Cuba's Communization changed these trends substantially. After a brief post-revolutionary baby boom, Cuba went through an accelerated transition, TFRs dropping below replacement levels in 1978. At the same time, Cuba abruptly became a country of mass emigration; to date, more than a million Cubans have emigrated in successive waves, most to the United States where these have formed a famously coherent Cuban-American community in exile. Cuba's population growth has continued throughout the forty-seven years of Castro's rule and is still relatively young by the standards of First World countries, but with sustained sub-replacement fertility rates and continued high rates of emigration it is fast tapering off.

How is the Cuban population likely to evolve in the coming years? Sergio Díaz-Briquets' "Cuba's future Economic Crisis: The Ageing Population and the Social Safety Net" paints an alarming picture. As a result of Cuba's particular demographic trends, Cuba's "median age has risen from 23.4 years in 1960 to 32.9 in 2000; it is projected to increase to 43.1 by 2025, rising even further by 2050, the end of the projection period." This rapid aging will have serious effects on the Cuban work force.

In 2002, when the country had 1.6 million elderly, the [Potential Support Ratio] in Cuba was 7, a relatively favorable ratio. By 2050, as the number of elderly is projected to reach 3.7 million, with a relatively unchanged overall population size, the PSR is expected to decline to 2 potential workers per retiree.

By comparison, in 2050 the Dominican Republic is expected to have a PSR of 4 and Chile and the United States PSRs of 3. The problem of underfunded retirement and pension systems that bedevils First World countries will be catastrophic for Cuba, in Díaz-Briquets' words possibly "imperil[ling] the country’s economic development since financing pension and health care programs will consume a disproportionate share of national resources. Paying for elderly services will be a major drag on the economy, placing a heavy tax burden on individuals and businesses. The tax burden may even be so onerous as to make Cuba less than attractive as an international investment destination."

Cuba's substantial economic underperformance, taking Cuba from a position alongside the richest countries of Latin America and southern Europe to one closer to the poorer countries of the Caribbean and Central America, thus might never be remedied. Indeed, it almost certainly will worsen Cuba's population prospects. Leaving aside the obvious economic incentives for potential emigrants from Cuba, Luis Locay argues in his papers "Schooling vs. Human Capital: How Prepared is Cuba's Labor Force to Function in a Market Economy?" (PDF format) and "The Future of Cuba's Labor Market: Prospects and Recommendations" (PDF format) that Cuba's well-educated labor force is inefficiently deployed, with the professional sectors of the Cuban economy having far too many workers for their own good. Locay concludes in his second paper that "[t]he current occupational and skill distributions of Cuba’s labor force are probably quite different from what they will be in a future market-oriented economy. Considerable retooling will be necessary. This not only will be costly, but also means that Cuba’s relatively high levels of education and large stock of professional talent overstate the earning capacity of the island’s labor force." A population with basic expectations that aren't likely to be met in its country is certain to produce a good number of emigrants.

Students of Cuba's likely post-Castro transition have looked around the world for likely models. People interested in Cuba's population prospects might be best served by looking at the example of Bulgaria, where the country's population has fallen through the emigration of something like one million Bulgarians--a ninth of the 1990 population--between 1990 and 2005. Presently standing at 7.7 million, Bulgaria's population is commonly projected to fall by another third to 4.8 million by 2050, thanks to lowest-low fertility and massive emigration. Bulgaria is by some measures three times as wealthy as Cuba, though; disparities between the living standards of Bulgaria and Greece are much smaller than those prevailing between Cuba on the one hand and the United States or Spain on the other. Moldova's experience might be worth keeping in mind.

Most of the estimates made of Cuba's future population expect the island nation's population to remain more or less stable until 2050 at around 11 million people. It's safe to say that these estimates are almost certainly overcounts. For the time being, I feel comfortable in predicting that after Castro, the Cuban diaspora will grow very strongly indeed.


Georgi Angelov said...

There seems to have som emistake in the data on Bulgaria. The population fell by 1 million, but the emigration was not 1 million. More than half of the population decrease is result of negative natural increase. Therefore, emigration is much lower than 1 million.

Edward said...

Hi Georgi,

"There seems to have some emistake in the data on Bulgaria."

Well I'm not sure that it is a msitake as much as no-one really knowing. Certainly a lot of Burgarians of Turkish origin (ie non-Pomac muslims), left at the end of the 80s (nearly a million perhaps), but many of them subsequently returned.

Then there was another wave after the financial crash of 1997/98, certainly a lot of migrants have left Bulgaria subsequent to that date. The issue really is how much of this is temporary work-related migration, and how much is long term and permanent. I guess we don't know.

Many of those who work outside may still be registered as residents in order to maintain voting rights, so the official population may be greater than the actual, and the migrants may now number one million. It is hard to say.

Obviously Bulgaria is losing population in both directions - from natural decline and from migration, and the two seem to operate a negative feedback mechanism where one serves to make the other worse.

What is the long term future of Bulgaria? This is the big unknown, but obvioulsy things don't look good since it is hard to see how this can stabilise.

Georgi Angelov said...

I don't see things gloomy for Bulgaria.
- Life expectancy is increasing.
- Birth rate is increasing as well as the number of newborn children and total fertility rate.
- Infant mortality rate is going down.
- Number of marriages is increasing.
- The number of first grade pupils is up.
Of course, there are many old people and therefore the mortality rate is high. But that is a passing phenomenon.
I had a cousin in London and another in Vienna - they are both back in Bulgaria now and are working here. I expect more returning as the economy continues to improve.
The real per capita economic growth in 2005 was more than 6 percent; the unemployment is record low after 17 years of transition; in the last six years the economy created more than 300 thousand new jobs. We enjoy more than 8 concecutive years of increasing economic growth.

All of these make me pretty sure demography of Bulgaria is going to be OK.

Edward said...

Hi again Georgi, and thanks for taking the trouble to come back. Strangely enough I have some loose connection with the Bulgarian situation since a couple of years ago I carried out a bit of qualitative research interviewing Bulgarian migrants here in Spain, in a small village in Valencia. I had a young Bulgarian anthropologist as a temporary research assistant. I met some very nice people.

This was a small rural village of 5,000 inhabitants, 1,000 of whom were Bulgarian migrants. I was curious about how all this process worked.

Now I would like to say I appreciate your optimism, but unfortunately sometimes optimism just isn't enough.

Bulgaria is surely going to benefit a lot from EU membership, and I am glad Bulgaria will be joining. But let's not underestimate the difficulties.

For sure the level of economic growth can be very rapid, since you will definitely get an EU coupling boost, the issue is just how sustainable that will be in the long run with your demographic profile.

You are soon going to run out of young qualified people as the economic base expands rapidly, especially if after EU accession other EU countries give easy access for the young and qualified to move and work legally (the Polish example might be instructive here). I understand that you have quite a tradition in IT engineers, for eg (even to the extent that the Indian IT industry would like to use Bulgaria as an outsourcing plaform for Europe), but many of these can easily be snapped up for work elsewhere.

In one sense the situation is not that different from many of the other 'transition societies', but there are special difficulties after the massive shock you had in the late 90s.

It seems to me that having viable pensions is going to be a problem, since your pension system was virtually destroyed in the crash.

Fertility as you say is rising slightly, but from a TFR of 1.2 to one of 1.3 (ie still only just above half the replacement rate). Life expectancy at 72 as you say is low by European standards but it is rising. This is obviously good news, but given the massive break in your population pyramid this increase does make the looming dependency problem even worse. Part of the reason for the increase in life expectancy is undoubtedly improved medical care of the elderly, but this as you know is expensive.

Also the Bulgarian population is already reducing at 0.5% per year, which compares with a 'mere' 0.2% in Germany where, as we know, there is a severe problem as a consequence.

The best possibility Bulgaria has is to generate such a high level of economic growth (like Spain has done) that you can attract massive inward migration to correct in some way the problems with your pyramid structure.

But this isn't going to be easy since Turkey, for example, which could easily in the past have furnished sustained migration for you, no longer exports many migrants and has a high rate of economic growth itself.

The best strategy will definitely be to go for high rates of economic growth and attempt to attract large numbers of young migrants to work in the new industries and services you hope to create. The key issues are obviously administrative transparency and a modern democratic environment to attract the necessary investment. It looks like an uphill struggle to me but I certainly wish you well.

Georgi Angelov said...

It was never in the history of Bulgaria a period of 9 years of economic growth. Even when population was increasing. So I would say that not only population matters, but economic policy also.

Pension was destroyed, but we hit the low point some time ago and, unluke Germany, things are only improving after that. In Germany the working/pensioners ratio is deteriorating, in Bulgaria it's improving (more people work, less people are pensioners).

7-8-9 years ago salaries were very low, pensions - extremely low, unemployment - increasing. Since then incomes are only increasing as well as employment.

These are 2 very important things - the low point is past both in economy and in working/not-working ratio.

The government debt was 120% of GDP in 1996 it is now 4 times lower at about 30% of GDP. Bulgarian government runs the highest budget surplus in Europe. Two achievements not so common in either West or East Europe, and Germany and Poland are not good examples.

I know everything can be ruined - I haved lived in the 1996 hyperinflation. But that is far more difficult today, although the same party is in power (but in coalition this time). Today the economy is private - huge difference, I can attest.

Edward said...


I can feel the sentiments in your comment, and I appreciate why they are there. I am glad you are optimistic, and I'm sure optimism is important.

I am also sure that things are much better in Bulgaria, probably better than they ever have been.

"I would say that not only population matters, but economic policy also."

I absolutely agree. I only stress the demographic things because most people know economic policy is important, buy many often aren't aware of the demographic dynamics which are also often involved.

As I said I welcome Bulgaria into the EU. I know this is important to a lot of people. I also know that getting the criminal element under control is important, but this can probably be better done once you are in. So I hope they let you join in January 2007.

As to the future, we will see. Obviously if you can grow sufficiently to attract migrants your prospects will be better. Please stick around and keep commenting. This blog is here for the long haul, and all valid points of view are welcome.

Good luck, and go easy on the Rakia :).