Cuban Revolution In Cuba

Cuba’s Gross Domestic Product per capita is 72.23 billion USD. It is a fairly poor state because Cuba does not have a capitalist economic system, it is communist which means that workers labour for the state, receive low incomes and in turn get domestic benefits such as free food, subsidies bills, free medical coverage, free education, no taxes on property and goods and services. The country has some developed and some underdeveloped countries which is all dependent upon its literacy rate, 3 out of 4 cubans are illiterate.

The Cuban Revolution strained Cuba’s already staggering economy. With the cold war, rise of a new authoritarian figure, collapse of communism and requesting aid from other countries; Cuba is known to owe over $38.046 billion
dollars. It starts with the US, Cuba owes the Unites States $7 billion dollars because of the trade embargo placed on Cuba during the 1960s. The embargo triggered Fidel Castro to seize all American assets in Cuban territory, including businesses, vacation homes, and bank accounts. All of which was valued at $1.8 billion back then has now become $7 billion. Cuba also owes the Soviet Union $3.5 billion dollars for the amount of aid that the Soviet has provided to Cuba especially when the Cuban economy failed just like their government system. Initially there was more than $100 billion debt owed to the Soviet Union, however Putin forgave Cuba 90% of the debt, leading them to pay $3.5 billion over the course of next ten years. Overall, Cuba has interfered affairs of many countries and has asked for aid from many others. While some have simple reasons and others are complex, thus a list is more efficient in communicating their debt, considering the amount of countries involved.
Cuba owes Spain $8 billion dollars
Owes Venezuela $7 billion dollars
Argentina $2.4 billion dollars
Owes Japan $1.4 billion dollars, however Japan has agreed to lower this debt by 80%
Finally, Cuba owes Mexico $146 million dollars

An average Cuban salary equates to about $25/ month where the average work day is 7 hours.
The workers get about 12-15 cents/hour. While it may look like the average wage of these laborious workers is extremely low compared to many western minium wages, cubans are happy with what they earn for several reasons. In terms of the Human Poverty Index, Cuba has ranked top from all the Latin American countries because people are living long and healthy lives, have access to education and have a decent standard of living. Part of the reason why many workers are happy with their income is because the Cuban government has provided the people with many economic subsidies. These subsidies include free food allowances, low utility bills ($2), free medical care, low Gasoline costs, free education, no property or goods and services taxes. Many Cubans are also happy with their lives because it is enriched with culture, the arts especially are flourishing in their land. However, there is a great gap between the rich and the poor, as the rich get more than quadruple the amount of income that the poor get. This is because of the new economic reforms that Raul Castro has put into place. This is Cuba’s 4th year into turning Cuba’s dual economy into a mixed one. The government regularly “updates” the country which means massive layoffs of the state workers, distribution of unoccupied land, agricultural reform, expansion of small businesses, cuts in social spending, etc. But mostly, the main goal
for Cuba is to increase its private sector which plays a major role in turning Cuba into a mixed economy. It is because of these reforms that many Cuban lives are changing. The 500,000 workers that were laid off in the last 4 years have started their own business or are now self employed which allows them to get a much higher income. This is what widens the gap between Cubans who get $50/month and those who get $11/month. However, it is predicted that those who are left in the dust will not get a chance to come out of poverty as they will become the necessary primary workers needed for the future industries to survive.

The major exports of Cuba are raw sugar, rolled tobacco, refined petroleum, hard liquor, poultry meat, wheat, concentrated milk and corn. The destinations of these resources go to China, Netherlands, Spain, Belgium-Luxembourg, and Brazil. Furthermore, the top importers include China, Spain, Brazil, Canada, and Italy. During the last 5 years the imports have increased from $5.58B in 2010 to 6.28B in 2015. These imports include refined petroleum, poultry wheat, milk, corn and medical instruments.

The major mineral resources in Cuba are nickel and cobalt. There are many other minerals present in the mining sector such as cement, feldspar, gypsum, iron ore, lime, limestone, asphalt, bentonite, chromite, zeolite, marble, steel, and sulfuric acid. Furthermore, gold, silver and zinc sediments have been found in the 1900s, and in these areas the government has constructed open pit mines. Many investments are starting to take place in Cuba as the country continues to liberalize and gain healthy relations with other countries. A joint venture was formed between Cuba and Venezuela to renovate the ferronickel plant by spending $700 million. Additionally, Sherritt International Corp have obtained 40%-100% in Cuba’s petroleum production sharing contracts. In July 2012, India has proposed to provide technical expertise to Cuba’s mining sector which would strengthen their trade relationship. In the same year, a spanish oil company will be drilling its first well in Cuba. Norway has also proposed its oil company Statoil to explore Cuba’s mining sector.

There are many problems with Cuba’s economy and one of the main ones is that it is isolated. Ever since the Cuban Revolution and the rise of rigid communism, Cuba has restricted relationships with other countries. The only two main benefactors to Cuba are Russia and Venezuela and the only two countries that are its mass providers have declining economic conditions. Venezuela is going into economic turmoil as it can no longer afford the subsidized energy imports from Carcass it promised Cuba. Russia is also dealing with financial problems. This makes Cuba more isolated than ever. Moreover, Cuba has enormous debts that they need to owe to many countries. It is not possible for Cuba in its current economic state to pay off these debts because the overall cost of imports are more than the costs for the mass exports. It is also because they are a stationary dual economy that they are not likely to pay off mass amounts of debt anytime soon unless they move towards capitalist mixed economy. Cuba does not have healthy relationships with a lot of countries because communism is blocking their path to a good economy. While Cuba has so much potential to move forward, in many ways they still have not modernized, as a consequence are suffering from stagnation. For example, in 2016, they finally allowed its citizens to carry cellphones, and get access to wifi. This shows how far behind they are as a developing nation, and how striving for good a socio-economic system while trying to remain a powerful communist nation is not working.

Raul Castro has already done some major economic reforms as he is striving for a mixed economy.
The path to a mixed economy appeals to many objectives that Castro will try to achieve by the the end of his term. First, Cuba has to expand the private sector that offer professional services. This would help people come out of poverty and allow for more people to be middle class. Expanding the private sector will also transform the minds of regular Cuban people and turn them into creative businessmen. Secondly, by liberalizing the economy, Cuba will be on its way to being open to foreign investments which will open new markets and new types of technologies. Thirdly, Cuba has the potential to be capitalist society as they are enriched with resources that could help them get out debt. Capitalism would be mean more private ownership, wage labour, price system, profit, and businesses involved in competitive markets. Cuba’s businesses will also be operating on consumer demands around the world which will call for the multiplier effect. This will not only modernize Cuba, build better trade relations with many countries, but put them on the path to modernization and later become a developed
nation.

North Korea’s is much like Cuba as during the 80s their economy also fell. There were shortages and inefficiencies seen everywhere. Despite their economic turmoil they refused to to liberalize their ways of managing the economy, as a result stagnation hit. Korea finally realized their crisis and requested economic aid from (the) USSR and China. However, USSR withdrew their aid in 1991 and demanded money back for imports. While China stepped in to help, it reduced its exports to North Korea in 1994. It was their rigid political and economic system that left the country behind while the rest of the world moved forward.