Brazil extends contracts for 11,500 Cuban doctors
The Economist
September 3, 2014

Event

Since August 2013, Cuba has collected over US$700m from the Brazilian government in exchange for the services of 11,456 Cuban medical professionals working in over 2,700 towns and cities across the country. The Brazilian government recently announced that the programme will continue next year, with total payments amounting to US$511m.

Analysis

The Cuban doctors participate in Brazil's Mais Médicos (More Doctors) programme, which aims to bring medical services to remote or underserved parts of the country by employing overseas doctors, mainly from Cuba. It was created in response to the mass protests that rocked Brazil in June 2013 over the poor quality of public services, including healthcare. The programme pays each participant a salary of around US$4,500 a month. However, the participation of Cuban doctors is organised through the Pan American Health Organization (PAHO). The Brazilian government disburses the payments to the PAHO, which then transfers the monies to the Cuban government after taking a 5% administrative commission. The Cuban government pays the medical professionals working in Brazil a monthly salary of US$1,245, and pockets the rest.

With 440,000 health professionals in a country of 11m people, Cuba has one of the best doctor-to-patient ratios in the world. As the government has sought to cut costs and "update" the economy since 2008 under President Raúl Castro, it has cut the number of doctors operating on the island and offered to sell their services abroad.

Currently, the sale of services abroad is Cuba's largest source of hard currency: in 2014, the government estimates that it will collect US$8.2bn from these deals. Around 50,000 Cuban health professionals work in 66 countries worldwide, although around half of those work in Venezuela, with an additional 11,456 in Brazil. The agreements with other foreign countries are similar to the Brazilian setup, with Cuban doctors paid less than the salary of local medical staff, and the remainder of their pay being transferred to the Cuban government.

Impact on the forecast

The Economist Intelligence Unit is not changing its macroeconomic forecasts in light of the renewal of the programme, but it will come as a relief to the Cuban government and will help to mitigate the scaling-back of the sale of professional services to Venezuela.

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