“The Cuban state adheres tosocialist principles in organizing its largelystate-controlled plannedeconomy. Most ofthe means of production are owned and run by the government and most of thelabor force is employed by the state. Recent years have seen a trend towardmore private sector employment. By 2006, public sector employment was 78% andprivate sector 22%, compared to 91.8% to 8.2% in 1981. Capital investment is restricted and requiresapproval by the government. The Cuban government sets most prices and rationsgoods. Any firm wishing to hire a Cuban must pay the Cuban government, which inturn will pay the employee in Cuban pesos.
Cuba reliedheavily on trade with the Soviet Union. From thelate 1980s, Soviet subsidies for Cuban goods started to dry up. Before thecollapse of the Soviet Union, Cuba depended on Moscow for substantial aid andsheltered markets for its exports. The removal of these subsidies (for examplethe oil  ) sent theCuban economy into a rapid depression known in Cuba as the Special Period. In1992 the United States tightened the trade embargo, hoping tosee a political collapse followed by a switch to capitalism, like it happenedin Eastern Europe.
Like someother Communist and post-Communist states following the collapse of the SovietUnion, Cuba took limited free market-oriented measures to alleviate severeshortages of food, consumer goods, and services. These steps included allowingsome self-employment in certain retail and light manufacturing sectors, thelegalization of the use of the US dollar inbusiness, and the encouragement of tourism. Cuba hasdeveloped a unique urban farm system (the organopónicos) tocompensate for the end of food imports from the Soviet Union. In recent years,Cuba has rolled back some of the market oriented measures undertaken in the1990s. In 2004 Cuban officials publicly backed the Euro as a "global counter-balanceto the US dollar", and eliminated U.S. currency from circulation in itsstores and businesses.
Varadero beach gets1 million foreign visitors per year
Tourism wasinitially restricted to enclave resorts where tourists would be segregated fromCuban society, referred to as "enclave tourism" and "tourismapartheid". Contactsbetween foreign visitors and ordinary Cubans were de facto illegal until1997. In 1996tourism surpassed the sugar industry as the largest source of hard currency forCuba. Cuba has tripled its market share of Caribbean tourism in the lastdecade; as a result of significant investment in tourism infrastructure, thisgrowth rate is predicted to continue. 1.9 milliontourists visited Cuba in 2003, predominantly from Canada and the EuropeanUnion, generating revenue of $2.1 billion. The rapidgrowth of tourism during the Special Period had widespread social and economicrepercussions in Cuba, and led to speculation about the emergence of a two-tiereconomy. The Medicaltourism sector caters to thousands of European, Latin American, Canadian, and Americanconsumers every year.
The communistagricultural production system was ridiculed by Raúl Castro in2008. Cuba nowimports up to 80% of food used for rations.
UnderVenezuela's MissionBarrio Adentro, Hugo Chávez supplied Cuba with up to 80,000 barrels(13,000 m3) of oil per day in exchange for 30,000 doctors andteachers.
In 2005 Cubahad exports of $2.4 billion, ranking 114 of 226 world countries, and imports of$6.9 billion, ranking 87 of 226 countries. Its majorexport partners are China 27.5%, Canada 26.9%, Netherlands 11.1%,Spain 4.7% (2007). Cuba'smajor exports are sugar, nickel, tobacco, fish, medical products, citrus, andcoffee; importsinclude food, fuel, clothing, and machinery. Cuba presently holds debt in anamount estimated to be $13 billion,approximately 38% of GDP. Accordingto the HeritageFoundation, Cuba is dependent on credit accounts that rotatefrom country to country. Cuba'sprior 35% supply of the world's export market for sugar has declined to 10% dueto a variety of factors, including a global sugar commodity price drop thatmade Cuba less competitive on world markets. At onetime, Cuba was the world's most important sugar producer and exporter. As aresult of diversification, underinvestment, and natural disasters, Cuba's sugarproduction has seen a drastic decline. In 2002 more than half of Cuba's sugarmills were shut down. Cuba holds 6.4% of the global market for nickel, whichconstitutes about 25% of total Cuban exports. A 2005 US Geological Survey reportestimates that the North Cuba Basin could contain 4.6 billion barrels of oiland 9.8 trillion cubic feet of natural gas.
In 2010,Cubans were allowed to build their own houses. According to Raul Castro, theywill be able to improve their houses with this new permission, but thegovernment will not endorse these new houses or improvements.
On August 2,2011, The New York Times reported Cuba as reaffirming their intent tolegalize "buying and selling" of private property before the yearends. According to experts, the private sale of property could "transformCuba more than any of the economic reforms announced by President Raúl Castro'sgovernment". It will cutmore than one million state jobs including party bureaucrats which resist thechanges.” (http://en.wikipedia.org/wiki/Cuba#Economy,Accessed on 9 April 2013)