By Tom Fawthrop

BBC News

HAVANA — Health ministry officials say Cuba's $1.8bn (Ł1bn) and growing tourism industry will soon be overtaken as the number one foreign exchange earner by biotechnology joint ventures, vaccine exports and the provision of health services to other countries.

Successful clinical trials in several countries have already established Cuba as a world leader in cancer research and treatment.

Last year, Cuba's health budget was boosted by a doubling in biotech exports to $300m, and the country earns fees from foreign patients and from exporting other medicinal products and diagnostic equipment and machines.

Also in 2005, a joint venture biotechnology plant was opened in China, with Havana providing the transfer of cancer treatment technology, and this year Cuba is eyeing the West:

German biotech firm Oncoscience is holding clinical trials of anti-cancer drug TheraCIM h_R3, which it hopes to get registered, and Californian Cancervax is expected to test another Cuban cancer treatment after Washington agreed to make an exception to its trade embargo.

"If we get access to the Western market, then this hi-tech sector could become the locomotive of the entire Cuban economy," says Dr Rolando Perez, scientist at the Centre of Molecular Immunology (CIM).

Engine for growth

Ever since taking power in 1959, Cuban President Fidel Castro has wanted to create a global medical power, though it was only after the collapse of its financial backer, the Soviet Union, in 1991 that the health sector came to be seen as a potential source of income.

During the 1990s, Cuba became the first country to develop and market a vaccine for meningitis B, and this sent export earnings soaring. Then there was a surge in exports of its hepatitis B vaccine, which is currently being shipped to 30 countries, including China, India, Russia, Pakistan and Latin American countries.

Now, the hope is that the healthcare sector will help transform Cuba from a poor developing economy, which is groaning under the weight of more than 40 years of punitive US trade sanctions and suffering due to decades of economic mismanagement under President Castro.

Whatever the cause of Cuba's difficulties, its many dilapidated buildings, ramshackle shops and frequent power cuts bear witness to the way its crumbling, underdeveloped economy coexists with the country's advanced medical and scientific sector.

Cuba's development model is based on harnessing the nation's wealth in human resources and science to a create a knowledge-based economy focused around health, according to the 79-year-old president.

"Someone might think that we are going bankrupt," President Castro said at a recent conference.

"No. We are improving. Human capital is worth far more than financial capital."

No brain drain

President Castro first started investing in biotechnology during the 1980s.

Two decades on, Cuba's prospects in a post-Castro era seem rosy, with its expanding health sector and an embryonic knowledge-based economy.

But this success story has also given rise to concerns.

What if Cuba's medical professionals decide to follow in the footsteps of several Cuban sport stars who in the past have gone to the U.S., lured by substantial financial rewards.

"We know that in the U.S. scientists are highly paid. I receive only 665 pesos a month (less than US$40)," observes Dr Perez.

But "we work in a environment of fulfilment and innovation", he says, pointing towards a laboratory full of scientists.

"You are free to interview any of them.

"We are highly motivated, not by money and commercial profit, but by a commitment to saving lives. We have not lost any of them. Nobody has defected to the U.S.."

International medics

That is not to say Cuban healthcare professionals do not work abroad.

Humanitarian missions in 68 countries are manned by 25,000 Cuban doctors, and medical teams have assisted victims of both the Tsunami and the Pakistan earthquake.

In addition, last year 1,800 doctors from 47 developing countries graduated in Cuba, and scholarships are on offer to developing country medical students studying at home.

Other overseas missions, such as in South Africa where Cuba is assisting the national health system, bring in revenue for Cuba's health ministry, and Venezuela has agreed to trade the services of Cuban doctors for oil.

Under a recent agreement, Cuba has sent 14,000 medics to provide free health care to people living in Venezuela's barrios, or shantytowns, where many have never seen a doctor before.

In addition Venezuelan patients can receive free surgery and specialised treatment in Cuban hospitals.

In return, Venezuela is slashing its oil bill to Cuba by up to a quarter over a 15-year period in a deal estimated to be worth up to $1bn, thus securing the supplies of 90,000 barrels of oil a day to the cash-strapped Cuban economy.

Domestic shortage

Nevertheless, in Cuba, where people have become accustomed to a free comprehensive healthcare system, this huge outflow of doctors has sparked complaints and grumbles.

According to the World Health Organization, Cuba provides a doctor for every 170 residents, ahead of the US where the ratio is 1 to 188.

These days, though, Cubans have to make do with fewer doctors and are sometimes forced to queue to get medical attention.

Moreover, some hospital wings have been taken over and some hotels have been closed to accommodate an influx of eye-surgery patients, following last September's launch of 'Operation Miracle' which set out to restore the eyesight of an estimated 6 million poor people in Latin America and the Caribbean who were suffering from cataracts and other debilitating eye-diseases.

To cancer expert Dr Perez, it is a worthwhile trade-off.

"I want to see all Cuban cancer patients receive free treatment, so we need money to finance our health service and to improve our living standards," he says.

"Our science is part of the economy."

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