Anonymous asked in Politics & GovernmentPolitics · 7 years ago

How is Cuba doing so well economically, considering its lack of resources & US embargo?

For a tiny Caribbean country, it sure is doing a lot better than its neighbours like Haiti. Their health care quality is above the level of American health care quality in terms of satisfying the needs of the majority. Poverty is substantially lower than other developing countries. When the Soviet Union collapsed, they were able to regain economic strength eventually and have been doing relatively well since. The US embargo with Cuba has definitely hindered Cuba's development. But considering all these factors against it, how is Cuba doing so well?

11 Answers

  • 7 years ago
    Favorite Answer

    You want the TRUTH of the matter? Here we go...

    Cuba has a dual economy, with two distinct systems operating side by side. The socialist peso economy applies to most Cubans, providing them with free education, free health care, universal employment, unemployment compensation, disability and retirement benefits and the basis necessities of life: food, housing, utilities and some entertainment at very low cost. The free-market dollarized economy operates in the tourist, international and export sectors, and substantially sustains the socialist economy.

    Cuba announced on 08 July 2013 its readiness to reform state-owned enterprises in 2014 by granting them more autonomy. It is necessary to change the rules and remove all the obstacles to the management system, Vice President Marino Murillo said during the last session of the National Assembly of People's Power (parliament). "If we don't transform the socialist state companies positively, we won't be able to bring up to date the Cuban economic model," he said. Murillo said that one of the changes is to lift limits over the payment of wages. Meanwhile, all the state-owned companies will be able to use 50 percent of their profits after tax, which will enable the companies to recapitalize and make their own investments. Despite the rising role of the private sector, the state-run companies will continue to be the most important link in the chain of Cuban economic model, he noted.

    In power for five decades, Fidei Castro converted Cuba into a Marxist-Leninist society with no individual freedoms or private property and with a Soviet-style centrally planned economy (see Glossary) run by a vast and cumbersome bureaucracy that has stifled innovation, productivity, and efficiency. Despite massive Soviet aid, the Cubans sank to unprecedented levels of poverty, aggravated further by the collapse of communism in the former Soviet Union and Eastern Europe.

    The collapse of communism in the early 1990s had a profound effect on Cuba. Soviet economic subsidies to Cuba ended as of January 1, 1991. Without Soviet support, Cuba was submerged in a major economic crisis. The gross national product contracted by as much as one-half between 1989 and 1993, exports fell by 79 percent and imports by 75 percent, the budget deficit tripled, and the standard of living of the population declined sharply. The Cuban government refers to the economic crisis of the 1990s and the austerity measures put in place to try to overcome it euphemistically as the “special period in peacetime.” Minor adjustments, such as more liberalized foreign investment laws and the opening of private (but highly regulated) small businesses and agricultural stands, were introduced. Yet the regime continued to cling to an outdated Marxist and caudillista (dictatorial) system, refusing to open the political process or the economy.

    Fifteen years after the demise of the Soviet Union the Cuban Government found in Hugo Chavez’s Venezuela a new benefactor. As a whole, the preferential economic relationship with Venezuela allowed the Cuban Government to more than double its import capacity, which had historically been closely related to GDP growth, and to carry out multibillion dollar investments both in infrastructure and productive sectors.

    The reality of economic reforms to date has not matched the government's urgent language, and the government has so far unveiled limited measures that have fallen short of true market liberalization. The government continues to hamper private sector growth with tight restrictions on the supply of goods and labor, high taxation that discourages hiring and profits, a ban on professional entrepreneurs, limited access to transportation and credit, a monopoly on importation, legal uncertainty and lack of transparency, and a host of other disincentives and restrictions. The reforms introduced so far, at a very slow pace, have been insufficient to reverse the deep systemic crisis first brought to light with the departure of Soviet economic support and exacerbated by a liquidity crisis that peaked in 2008-2009.

    === That's enough of that.... in brief here are the points:

    1. Government provides the "basics" of living... food, housing, education, healthcare.

    2. The REFORMS are beginning to open the economy.

    3. Venezuela has replaced the USSR as Cuba's main benefactor.

    4. True market LIBERALIZATION is still being hampered by the communist government.

    Therefore the basic answer to your question is FREEING the economy, that's HOW. But they are still struggling because the COMMUNISTS STILL do not wish to FREE the economy as they have PROMISED to do and is CAPABLE of being done.

    One difference between conservatives and liberals: Conservatives are guided by TRUTH. Liberals try to GUIDE the Truth.

    Republican since before she was born… and PROUD of it.

  • 7 years ago

    Cuba is functioning as a state, but its people generally live at subsistence level. Despite the non-involvement of the US, Cuba attracts a large number of tourists from Canada and Europe. It has also received much support from its oil-rich Commie pal Venezuela.

  • janhoi
    Lv 6
    7 years ago

    Because of increased foreign investment, and because the Cuban government itself has made adjustments that include accepting some forms of capitalism in places like the tourist industry, while still maintaining a Communist government.

    The economy was significantly affected by the recent economic crisis though

    Source(s): Christian
  • Anonymous
    7 years ago

    So well?

    Other than Haiti, Cuba's economy is worse than any of it's neighbors.

    Haiti has a larger population, which is the usual reason that poor countries do poorly.

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  • Anonymous
    7 years ago

    Cuba is a 3rd rate Banana dictator ship They are not doing well at all, hell Detroit is doing better than Haiti, (What kind of comparison is that?) Cuba is a $hit-hole, and you blowing smoke up everybody's skirt about the wealth of Cuba is pretty darn silly, because smart people know better.

  • Anonymous
    7 years ago

    Since few people likely find this question interesting, why don't you go do some on the ground research and report back in a few years? Or longer.

  • Anonymous
    7 years ago

    Simple. Fidel killed all the Bankers first thing. We should take a lesson.

  • 7 years ago

    They are somewhat fairer communism and organized. Not pure chaos corruption.

  • Anonymous
    7 years ago

    There are no conservatives in Cuba. It's illegal there. That's why they're doing well.

  • 7 years ago

    They don't have 0bama mucking things up.

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