Brazil extends contracts for 11,500 Cuban doctors

September 3rd 2014

Brazil extends contracts for 11,500 Cuban doctors

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.

Source: Brazil extends contracts for 11,500 Cuban doctors -
http://country.eiu.com/article.aspx?articleid=1782243562&Country=Cuba&topic=Politics&subtopic=Forecast&subsubtopic=Political+stability&u=1&pid=532225237&oid=532225237&uid=1