Cuba is the country with the most miserable economy in the world, according to report

Cuba is the country with the most miserable economy in the world, according to theHanke 2021 Annual Misery Index (HAMI), prepared by the American economistSteve H. Hanke, professor at Johns Hopkins University.

The island was the best-positioned country in Latin America in the 2020 ranking, but suffered a sharp drop byainflation of 1221.8 percent in 2021.

The report evaluates each yearHow the average citizen is doing economically of each nation and for this it adds the inflation, unemployment and nominal interest rates (as negative aspects), and subtracts the growth rate of GDP per inhabitant (the latter as a positive factor).

“That level of inflation was not surprising, given the devaluation of the peso in Cuba by 95 percent during 2021.Currency devaluations lead to increased inflation rates. In fact, after a devaluation, inflation will increase and so will the production costs of goods and services, including exports, in the country that has devalued its currency,” indicated the expert on the case of Cuba inNational Review.

The economist added that“inflation will rob any of the potential short-term competitive benefits that might initially accompany devaluation.”, and stressed that this has been what has happened in Cuba.

According to the economist, the Cuban regime“You could easily solve your inflation crisis by installing a currency board”, and referred to the book“Monetary Reform for a Market-Oriented Cuba”, written by himself and Kurt Schuler in 1992, where they abound in this hypothesis.

Hanke specified that a “currency board issues banknotes and coins convertible on demand into a foreign anchor currency at a fixed exchange rate. It is required to maintain reserves in anchor currency equivalent to 100 percent of its monetary liabilities.”

“A currency board currency is a clone of its anchor currency. Currency boards have existed in about 70 countries. “None has failed,” he concluded.

Hanke calculated for Cuba an unemployment of 3.7%, an inflation of 1221.8%, a nominal interest of 2.3% and subtracted a GDP of 0.2%.

The American economist assures that the human condition lies on a broad spectrum between “miserable” and “happy,” and believes thatIn the economic sphere, misery tends to flow from high inflation, high borrowing costs and unemployment.; which is why he estimates that the safest way for a country to mitigate this misery “is through economic growth.”

Steve Hanke analyzed the economic statistics of 156 countries in his report. In second place, behind Cuba, he placed Venezuela (first place in the last six years) which he described as “another socialist lost case.”

In the first 15 positions on the list, in addition to Cuba and Venezuela, are: Sudan, Lebanon, Zimbabwe, Argentina, Suriname, Angola, Brazil, Iran, Nigeria, Haiti, Turkey, Zambia and Ethiopia.

Recently, the annual Economic Freedom Report published by the Heritage Foundation placed Cuba asthe third country with the least economic freedom in the world, only surpassed by Venezuela and North Korea.

At the beginning of March, during the evaluation of the Ministry of Economy and Planning, the Cuban leaderMiguel Diaz-Canel defended the socialist and Marxist approach to the economy on the island.