Cuba is the most "miserable" country in the world, an economic study finds

Cuba is the "most miserable" country in the world according to the Hanke Annual Misery Index 2021 (HAMI), which was recently released by its creator, economist Steve H. Hanke, a professor at Johns Hopkins University in Baltimore, USA.

“Cuba, with a dramatic plummet compared with last year’s HAMI, now holds the inglorious title of 2021’s most-miserable country. As you can see, Cuba’s HAMI score was driven by a soaring 1,221.8 percent per year inflation. That level of inflation was rather unsurprising, given Cuba’s devaluing of the peso by 95 percent during 2021,” explained Hanke in an article published by National Review.

“Currency devaluations lead to increased inflation rates. Indeed, following a devaluation, inflation will pick up, and so will the costs of producing goods and services, including exports, in the country that has devalued its currency. Inflation will steal away any of the potential short‐term, competitive benefits that might initially accompany the devaluation. This is exactly what happened in Cuba,” added Hanke, who clarified that on the island one does not live so miserably if one is favored by the Communist Party.

According to the economist, the Cuban regime "could easily solve its inflation crisis by installing a currency board, as Dr. Kurt Schuler and I proposed in Monetary Reform for a Market-Oriented Cuba (1992)".

A currency board issues bills and coins convertible on demand into a foreign anchor currency at a fixed exchange rate. He added that it must maintain anchor currency reserves equal to 100 percent of its monetary liabilities.

“Behind Cuba, Venezuela is the second most miserable country in the world according to my Misery Index. No surprise, as its socialist economy has collapsed with inflation soaring at 135% a year by my measure,” Hanke posted on his Twitter.

Behind Cuba, Venezuela is the second most miserable country in the world according to my Misery Index. No surprise, as its socialist economy has collapsed w/inflation soaring at 135%/yr by my measure. Take a look at the rest of the rankings.https://t.co/1DvJbipY9E

— Steve Hanke (@steve_hanke) March 20, 2022

The index of "miserable" countries considers the sum of the year-end unemployment, inflation, and bank lending rates, minus the annual percentage change in real GDP per capita.

 In addition to the authoritarian regimes of Cuba and Venezuela, the ten most "miserable" countries in Latin America last year were Argentina (6) and Brazil (9), which share the table with Angola, Suriname, Sudan, Zimbabwe, Lebanon, and Iran.