Cuban Situation :: Cuba Politics Economy Economics Essays

Cuban SituationCuba needs cows. In January of 2004, a Cuban delegation visited Florida to inspect beef and dairy cows to repair Cubas languishing cattle industry. Moreover, under the auspices of the U.S. Trade Sanctions Reform and Export sweetening Act in 2000, the United States exported $350 million dollars worth of American gardening products to its island neighbor in 2000 (Bussey 1). This budding trade relationship is symptomatic of a broader move by Cuba to fully re-insert itself in the global economy. Deprived of the preservative cocoon of Soviet trade agreements and faced with economic crisis and stagnation, Cubas leadership have responded with limited economic reforms. It is clear, however, that Cuba will not emulate the quick liberalization of much of Eastern Europe and Latin America. A brief review of Cubas economic performance since the fall of the Soviet sum reveals a trend of liberalization bred of necessity. Nevertheless, the mixed performance of the Export-Proce ssing Zones and the governments grudging acceptance of tourism reveal a tension in the midst of Cubas need for foreign currency and direct foreign investment and a desire to insulate and preserve Cubas existing domestic apparatus. This tension underlies Cubas ongoing economic transition and has prevented wholesale food market liberalization. Cubas future movement towards market reforms will be carefully managed by the Castro government to protect Cubas revolutionary legacy and to defy control of political opposition. The fall of the Soviet Union devastated the Cuban economy. Cubas GDP contracted by 35-50% from 1989-1993 (LeoGrande quest 5). As a division of total Cuban trade, the Soviet Unions share reduce from 66% in 1990 to 15% in 1994 (5). Moreover, Russia reneged on its oil agreement, and fitful exports caused energy shortages in Cuba. Production and consumption plummeted. From 1986-1991, Castro undertook a rectification adjure to stabilize the economy as the Soviet Un ion decreased its relief and eventually collapsed. The plan focused on re-centralizing economic planning authority, rase the Soviet-sponsored socialist management system and market mechanisms, abolishing the free farmers markets launched in 1980, and combating corruption (4). In addition, Castro tried to address the massive trade imbalance by reduction imports and reinvigorating the export sector. This program was a resounding failure. More domestic and far-reaching reforms were undeniable to save the economy from crisis. Economic disaster had erected a serious altercate to Cubas socialist program.In 1991, Castros announcement of a particular Period in a Time of Peace marked the rise of Cubas new era of liberalization.