Cuba
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History
The native Amerindian population of Cuba began to decline after the European discovery of the island by Christopher COLUMBUS in 1492 and following its development as a Spanish colony during the next several centuries.
Large numbers of African slaves were imported to work the coffee and sugar plantations, and Havana became the launching point for the annual treasure fleets bound for Spain from Mexico and Peru.
In Cuba, the Cubans were fighting for independence from Spain from 1810-1890 (approx), but the Spanish were firm that this was the one island that they were not willing to allow independence. This was the one place they would fight to keep. As a result, they committed "atrocities". A US based reporter from Tampa (Jose Marti) caught the news, and began reporting in the US main press. As a result of reading of these terrible things that Spain was doing, the Americans got really upset. The US sent a ship to Havanna, but while it was there, it blew up, and sank, killing all US sailors. The reaction was the US delaring war on Spain, a war that lasted just 6 weeks, with a clear US vicotry. As a result of this victory, the US took control of Cuba, Puerto Rico, and the Philippines. For the next 20-30 years, the US ran Cuba. They finally gave independence back to Cuba, but not before cementing firm business ties, prime real estate and strong influence on the island. Puerto Rico is still under the US.
Spanish rule, marked initially by neglect, became increasingly repressive, provoking an independence movement and occasional rebellions that were harshly suppressed. It was US intervention during the Spanish-American War in 1898 that finally overthrew Spanish rule. The subsequent Treaty of Paris established Cuban independence, which was granted in 1902 after a three-year transition period.
Fidel CASTRO led a rebel army to victory in 1959; his iron rule has held the regime together since then. Cuba's Communist revolution, with Soviet support (Russia), was exported throughout Latin America and Africa during the 1960s, 1970s, and 1980s. The country is now slowly recovering from a severe economic recession in 1990, following the withdrawal of former Soviet subsidies, worth $4 billion to $6 billion annually. Cuba portrays its difficulties as the result of the US embargo in place since 1961.
Illicit migration to the US - using homemade rafts, alien smugglers, air flights, or via the southwest border - is a continuing problem. The US Coast Guard intercepted 2,810 individuals attempting to cross the Straits of Florida in fiscal year 2006.
PoliticsFidel has been gravely sick for some time now, and his brother Raul has stepped in to (quietly) fill his shoes "temporarily". But even the most critical Cuban analyst has been surprised about how seemingly smoothly the transition has occurred (so far). If Fidel were to return now, it would mean that the process of transferring power would need to occur again in the future, and next time it might not go as smoothly. For now, Raul seems content to stay below the radar and do everything to avoid signaling an official transfer of power. Unofficially, Raul seems to favor the Chinese model for economic / political "harmony", and many experts expect him to open up the economy, but to keep firm control over politics (if possible) it the future. On the other hand, there is a hard line conservative group also vying for power that does not favor this "modernization".
The Cuban American National Foundation (CANF), a group vehemently opposed to the Cuban government, came out in favor of easing the U.S. isolation of Cuba last week. The move opens the possibility that the United States might shift its policies toward Cuba. Florida is a key state for anyone who wants to become president of the United States, and the Cuban community in Florida is substantial. Though the Soviet threat expired long ago, easing the embargo on Cuba has always held limited value to American politicians with ambitions. For them, Florida is more important than Cuba. Therefore, this historic shift alters the U.S. domestic political landscape.
Why Cuba is important to the USA:
analysis from stratfor.com
Cuba occupies an extraordinarily important geographic position for the United States. It sits astride the access points from the Gulf of Mexico into the Atlantic Ocean, and therefore is in a position to impact the export of U.S. agricultural products via the Mississippi River complex and New Orleans (not to mention the modern-day energy industrial centers along the Gulf Coast). If New Orleans is the key to the American Midwest’s access to the world, Cuba is the key to New Orleans.
Access to the Atlantic from the Gulf runs on a line from Key West to the Yucatan Peninsula, a distance of about 380 miles. Running perpendicular through the middle of this line is Cuba. The Straits of Florida, the northern maritime passage from the Gulf to the Atlantic, is about 90 miles wide from Havana to Key West. The Yucatan Channel, the southern maritime passage, is about 120 miles wide. Cuba itself is about 600 miles long. On the northern route, the Bahamas run parallel to Cuba for about half that distance, forcing ships to the south, toward Cuba. On the southern route, after the Yucatan gantlet, the passage out of the Caribbean is made long and complicated by the West Indies. A substantial, hostile naval force or air power based in Cuba could blockade the Gulf of Mexico — and hence the American heartland.
Throughout the 19th century, Cuba was of concern to the United States for this reason. The moribund Spanish Empire controlled Cuba through most of the century, something the United States could live with. The real American fear was that the British — who had already tried for New Orleans itself in the War of 1812 — would expel the Spanish from Cuba and take advantage of the island’s location to strangle the United States. Lacking the power to do anything about Spain itself, the United States was content to rely on Madrid to protect Spanish interests and those of the United States.
Cuba remained a Spanish colony long after other Spanish colonies gained independence. The Cubans were intensely afraid of both the United States and Britain, and saw a relationship with Spain — however unpleasant — as more secure than risking English or American domination. The Cubans had mixed feelings about the prospect of formal independence from Spain followed by unofficial foreign domination.
But in 1895, the Cubans rose up against Spain (not for the first time) in what turned into the struggle that would culminate in the island’s independence from the country. With a keen interest in Cuba, Washington declared war on Spain in 1898 and invaded Cuba. The Spanish were quickly defeated in the Spanish-American War and soon withdrew from the island. For the United States, the main goal was less about gaining control of Cuba itself (though that was the net result) than about denying Cuba to other world powers.
The United States solved its Cuban problem by establishing a naval base at Guantanamo Bay on the island. Between this base and U.S. naval bases in the Gulf and on the East Coast, British naval forces in the Bahamas were placed in a vise. By establishing Guantanamo Bay on the southern coast of Cuba, near the Windward Passage between Cuba and Haiti, the United States controlled the southern route to the Atlantic through the Yucatan Channel.
For the United States, any power that threatened to establish a naval presence in Cuba represented a direct threat to U.S. national security. When there were fears during World War I that the Germans might seek to establish U-boat bases in Cuba — an unrealistic concern — the United States interfered in Cuban politics to preclude that possibility. But it was the Soviet Union’s presence in Cuba during the Cold War that really terrified the Americans.
From the Soviet point of view, Cuba served a purpose no other island in the region could serve. Missiles could be based in many places in the region, but only Cuba could bottle up the Gulf of Mexico. Any Soviet planner looking at a map would immediately identify Cuba as a key asset; any American planner looking at the same map would identify Cuba in Soviet hands as a key threat. For the Soviets, establishing a pro-Soviet regime in Cuba represented a geopolitical masterstroke. For the United States, it represented a geopolitical nightmare that had to be reversed.
Just as U.S. medium- and intermediate-range ballistic missiles in Turkey put the Soviet heartland in the crosshairs during the Cold War, Soviet missiles deployed operationally in Cuba put the entire U.S. Eastern Seaboard at risk. Mere minutes would have been available for detection and recognition of an attack before impact. In addition, the missiles’ very presence would serve as a significant deterrent to conventional attack on the island — which is why it was so important for the United States not to allow an established missile presence in Cuba.
The final outcome of the U.S.-Soviet standoff pivoted on the Cuban Missile Crisis of 1962, which ended in an American blockade of Cuba, not a Soviet blockade of the Gulf. It was about missiles, not about maritime access. But the deal that ended the crisis solved the problem for the United States. In return for a U.S. promise not to invade Cuba, the Soviets promised not to place nuclear missiles on the island. If the Soviets didn’t have missiles there, the United States could neutralize any naval presence in Cuba — and therefore any threat to American trade routes. Fidel Castro could be allowed to survive, but in a position of strategic vulnerability. One part of Washington’s strategy was military, and the other part was economic — namely, the embargo.
Throughout Cuba’s history as an independent nation, the Cubans simultaneously have viewed the United States as an economic driver of the Cuban economy, and as a threat to Cuban political autonomy. The Americans have looked at Cuba as a potential strategic threat. This imbalance made U.S. domination of Cuba inevitable. Cuban leaders in the first half of the 20th century accepted domination in return for prosperity. But there were those who argued that the island’s prosperity was unequally distributed, and the loss of autonomy too damaging to accept. Castro led the latter group to success in the 1959 revolution against U.S.-supported Cuban President Fulgencio Batista. The anti-Castro emigres who fled to the United States and established an influential community of anti-Castro sentiment had been part of the elite who prospered from Cuba’s high level of dependence on the United States.
Cuban history has been characterized by an oscillation of views about the United States, with Cubans both wanting what it had to offer and seeking foreign powers — the Spanish, the British the Soviets — to counterbalance the Americans. But the counterbalance either never materialized (in the case of the British) or, when it did, it was as suffocating as the Americans (in the case of the Soviets). In the end, Cuba probably would have preferred to be located somewhere not of strategic interest to the United States.
The U.S. obsession with Cuba does not manifest itself continuously; it appears only when a potentially hostile major power allies itself with Cuba and bases itself there. Cuba by itself can never pose a threat to the United States. Absent a foreign power, the United States is never indifferent to Cuba, but is much less sensitive. Therefore, after the end of the Cold War and the Soviet collapse, Cuba became a minor issue for the United States — and political considerations took precedence over geopolitical issues. Florida’s electoral votes were more important than Cuba, and the status quo was left untouched.
Cuba has become a bit more important to the United States in the wake of the August 2008 Russo-Georgian war. In response to that conflict, the Americans sent warships into the Black Sea. The Russians responded by sending warships and strategic bombers into the Caribbean. High-profile Russian delegations have held talks with Cuba since then, increasing tensions. But these tensions are a tiny fraction of what they once were. Russia is in no way a strategic threat to American shipping in the Gulf of Mexico, nor is it going to be any time soon, due to Russia’s limited ability to wield substantive power in such a distant theater.
But Cuba is always an underlying concern to the United States. This concern can subside, but it cannot go away. Thus, from the American point of view, Russian probes are a reminder that Cuba remains a potential threat. Advocates of easing the embargo say it will help liberalize Cuba, just as trade relations liberalized Russia. The Cuban leadership shares this view and will therefore be very careful about how any liberalization is worked out. The Cubans must be thoroughly convinced of the benefits of increased engagement with the United States in order for Havana to sacrifice its ability to blame Washington for all of its economic problems. If Cuba opens too much to the United States, the Cuban regime might fall. In the end, it might be the Cubans who shy away from an end to the embargo. The Americans have little to lose either way.
But that is all politics. The important thing to understand about Cuba is the historic U.S. obsession with the island, and why the Cubans have never been able to find their balance with the United States. The answer lies in geopolitics. The politics in play now are simply the bubble on the surface of much deeper forces.
Embargo
Increased US government restrictions on travel by Cuban-Americans and on the numbers of dollars they could transport to Cuba strengthened Cuban government control over dollars circulating in the economy. In the last decade, Cubans had received between US$600 million and US$1 billion annually, mostly from family members in the U.S. This number is influenced by the fact that U.S. government forbids its citizens to send more than $1,200 to Cuba to immediate family members, and then only once per year.
US ReactionOfficially, the US has made no real efforts to side with Raul, but you know that there must be many in power in the US that cant wait for Fidel to go (especially the Cuban exiles in Miami).
The trade embargo with Cuba has been in effect since 1962. That said, its hard to find any American outside of Miami that feels any passion to keeping the trade embargo going. The US already trades with China, who is just as communist, and just as philisophically against US style democracy. The majoriy of Americans dont see any reason to go on with the embargo against Cuba. But, there are very strong Cuban exiles in Miami that hold a powerful sway over the Republican party. The Cubans were instrumental in delivering Florida to the Bush campaign, which was what eventually put him in the White House. Inside of the Republican party , there is acknowledgement that they cant win the Florida without Miami Cubans, and they probably cant win the Presidency without Florida. Becasue of this little chain of loyalty, the Cuban exile community in Miami is very powerful, and is key to the continuation of the trade embargo.
But, with the prospects of a Democrat in the White House, and with a Democrat controlled congress, it is possible that the days of the Trade Embargo may be coming to an end.
Pressure from US Business
Mid Western farmers in Iowa, Indiana, etc...they would love to sell their corn and agricultural product to Cuba, and they are increasingly getting their political voice heard, especially in the Democratic party.
Also, business all across the USA must be salivating at the chance that someday they may get to build hotels, casinos, and send cruise ships to Havana. Cuba used to be a major tourist destination for Americans, and it will likely be one again (someday after the embargo is gone). Note that it is currently illegal for US citizens to travel to Cuba, so planes, boats, etc...none of them have direct access to Cuba (with the exception of a few flights from Miami for family visits between exciles and locals).
Negative news:
rise in fuel and food prices and a significant decline in the price of nickel – the main export.
Recent Developments
EU ends Trade sanctions against Cuba (see FT article here)
Reforms post Fidel
Cuba's communist government has recently concluded that private farming, rather than socialism, is the best way to feed the people
recent social reforms including changes to property ownership rights, salaries, agriculture and access to mobile phones. Map
Changes in Cuba?
Rigid control by the Party and the Revolutionary Armed Forces is directly threatened by a failed economy and unacceptably low standards of living. The loss of the shield of Fidel’s charisma exposes the fault lines of the regime. Some sort of economic reform along Chinese or Vietnamese lines is likely with market institutions tolerated in the context of rigid Party control. (Army-controlled enterprises already dominate the tourist sector and engage in active, if limited, trade with US agricultural suppliers.)
Economic growth has picked up since 2004 (7% GDP growth in 2007.
Potential:
Reorienting trade to the US would be of great importance in easing the transition if the embargo can be eased.
How the US could help during the transition (if it comes);
In the beginning, the most draconian aspects of the US embargo could be eased, starting with the restrictions on family travel and remittances, disaster relief, and medical supplies. Further easing might come gradually and in sectors where the US is already trading with Cuba, such as agriculture. (Despite the embargo, Cuba imports substantial amounts of foodstuffs from the US.)
Economy
Starting in the late 1980s, the Soviet subsidies for Cuba's state-run economy started to dry up. Before the collapse of the Soviet Union, Cuba depended on Moscow for sheltered markets for its exports and substantial aid. The Soviets had been paying above-market prices for Cuban sugar, while providing Cuba with petroleum at below-market prices. The removal of these subsidies sent the Cuban economy into a rapid depression known in Cuba as the Special Period. At one point, Cuba received subsidies amounting to six billion dollars. In 1992, the United States tightened the trade embargo. Some believe that this may have contributed to a drop in Cuban living standards which approached crisis point within a year.
Like some other Communist and post-Communist states following the collapse of the Soviet Union, Cuba took limited free market-oriented measures to alleviate severe shortages of food, consumer goods, and services to make up for the ending of Soviet subsidies. These steps included allowing some self-employment in certain retail and light manufacturing sectors, the legalization of the use of the U.S. dollar in business, and the encouragement of tourism. In 1996 tourism surpassed the sugar industry as the largest source of hard currency for Cuba. Cuba has tripled its market share of Caribbean tourism in the last decade, with large investment in tourism infrastructure this growth rate is predicted to continue. 1.9 million tourists visited Cuba in 2003 predominantly from Canada and the European Union, generating revenue of $2.1 billion. The rapid growth of tourism during the Special Period had widespread social and economic repercussions in Cuba. This has led to speculation of the emergence of a two-tier economy and the fostering of a state of tourist apartheid on the island.
Since 1959, Cuba has experienced slow growth in its Gross Domestic Product relative to other countries that were in a similar situation in the 1950s, stagnant trade. and amassed a significant debt amounting to some 16.62 billion in convertible currency and 15 to 20 billion dollars with Russia. Cuban citizens themselves have experienced a decrease in their caloric intake and a shortage of housing.
The government continues to balance the need for economic loosening against a desire for firm political control.
It has rolled back limited reforms undertaken in the 1990s to increase enterprise efficiency and alleviate serious shortages of food, consumer goods, and services. The average Cuban's standard of living remains at a lower level than before the downturn of the 1990s, which was caused by the loss of Soviet aid and domestic inefficiencies.
Ties with Venezuela
In recent years, since the rise of Venezuela's Socialist President Hugo Chávez, Venezuelan economic aid has enabled Cuba to improve economically. Venezuela's assistance of the Cuban economy comes chiefly through its supply of up to 80,000 barrels of oil per day in exchange for professional services and agricultural products. In the last several years, Cuba has rolled back some of the market oriented measures undertaken in the 1990s. In 2004, Cuban officials publicly backed the Euro as a "global counter-balance to the U.S. dollar," and eliminated the US currency from circulation in its stores and businesses.
Since late 2000, Venezuela has been providing Cuba Oil Industry on preferential terms, and it currently supplies about 98,000 barrels per day of petroleum products. Cuba has been paying for the oil, in part, with the services of Cuban personnel, including some 20,000 medical professionals. Venezuela has been the main savior of Cuba since the disappearance of Russia (even though Russia still has strong ties with the island).
Recently, there was an announced 300+ projects with an estimated value of $1.5 billion from Venezuela to Cuba. Included in that investment, Venezuela has promised to invest $300 million to increase nickel production, and to build 10 Ethanol plants to provide an alternative use for Cuba’s sugar crop. Just before this announcement, however, Cuba signed an agreement granting oil exploration rights in the Gulf of Mexico to Venezuela’s state-owned oil company, PDVSA. It sounds to me like Cuba exchanged investment for oil exploration rights...interesting that the roots of the "brotherhood" may be tied to economic partnership. That seems to prove that Cuba is willing to trade away exploration rights in exchange for much-needed investment in their industries. Business men take note!!
In 2006, high metals prices continued to boost Cuban earnings from nickel and cobalt production. Havana continued to invest in the country's energy sector to mitigate electrical blackouts that have plagued the country since 2004.
Tourism Potential
NPR considers Cuba's appeal as a U.S. tourist destination. http://www.npr.org/templates/story/story.php?storyId=111784037
Tourism
Sugar is pretty much what Cuba is known for. Sugar, and its many products (such as Rum).
But, Cuba's prior 35% supply of the world's export market for sugar has declined to 10% due to a variety of factors, including a global sugar commodity price drop making Cuba less competitive on world markets. At one time, Cuba was the world’s most important sugar producer and exporter. As a result of diversification, underinvestment and natural disasters, however, Cuba's sugar production has seen a drastic decline. In 2002, more than half of Cuba's sugar mills were shut down. Cuba's most recent sugar harvest of 1.1 million metric tons was its worst in nearly one hundred years, comparable only to those of 1903 and 1904.
Nickel industryCuba has had until recently one of the America's most productive and long standing nickel mines. Cuba holds 6.4% of the global market for nickel which constitutes about 25% of total Cuban exports.
Oil wealth
Recently, large reserves of oil were found in the North Cuba Basin leading US Congress members Jeff Flake and Larry Craig to call for a repeal of the US embargo of Cuba. Funny how oil really does make the world go 'round!
Recent oil exploration has revealed that the North Cuba Basin has approximately 4.6 billion to 9.3 billion barrels of oil in it, which Cuba has now started to test-drill (as of 2006).
The Cuban Government adheres to socialist principles in organizing its largely state-controlled planned economy. Most of the means of production are owned and run by the government and most of the labor force is employed by the state. Recent years have seen a trend towards more private sector employment. By the year 2006, public sector employment was 78% and the private sector at 22% compared to the 1981 ratio of 91.8% to 8.2%. Capital investment is restricted and requires approval by the government. The Cuban government sets most prices and rations goods to citizens. Moreover, any firm wishing to hire a Cuban must pay the Cuban government, which in turn will pay the company's employee in Cuban pesos.
Trade Deficit
It is important to realize that Cuba is constantly running a merchandise trade deficit, as they are forced to import lots of goods (and even food). This is like what happened to Russia...they simply are not efficient at producing goods in the Socialist state (witness all of the extremely old cars on the roads).
On the other hand, Cuba tries to make up for its deficit by exporting services such as doctors. In the past, the deficit was financed by Russia, though not anymore. To reduce the hardship, Venezuela has "kindly" financed the island with cheap oil imports.
In 2005 Cuba exported $2.4 billion, ranking 114 of 226 world countries, and imported $6.9 billion, ranking 87 of 226 countries. Its major export partners are the Netherlands 18.5%, Canada 18.5%, China 16%, Bermuda 14.1%, Spain 5.1%; major import partners are Venezuela 27%, China 15.8%, Spain 9.7%, Germany 6.5%, Canada 5.6%, Italy 4.4%, US 4.4% (2006). Cuba's major exports are sugar, nickel, tobacco, fish, medical products, citrus, and coffee; imports include food, fuel, clothing, and machinery. Cuba presently holds debt in an amount estimated to be $13 billion, approximately 38% of GDP.
Medical Tourism
The Cuban government has significantly developed its medical tourism capabilities as a key means to generate income for the country. For many years, Cuba has operated a special division of hospitals that treated foreigners and diplomats while excluding Cubans. Every year, thousands of European, Latin American, Canadian and American consumers with hard cash visit to access medical care services at up to 80 percent less than U.S. costs. There are some who criticize Cuba's medical tourism industry because ordinary Cubans do not have access to the kind of quality healthcare that medical tourists receive.
Domestic Housing Shortage
For some time now, Cuba has been experiencing a housing shortage because of the state's failure to keep pace with increasing demand. Moreover, the government instituted food rationing policies in 1962, which were exacerbated following the collapse of the Soviet Union and, according to supporters of the government, the tightening of the US embargo. As late as 2001, studies have shown that the average Cuban's standard of living was lower than before the downturn of the post-Soviet period. Paramount issues have been state salaries failing to meet personal needs under the state rationing system chronically plagued with shortages.
Food Shortages
The US agricultural states are drooling over the possibilities of increased trade with Cuba, who has a massive population (for the islands) and not enough efficiency or food production.
As the variety and amount of rationed goods available declined, Cubans increasingly turned to the black market to obtain basic food, clothing, household, and health amenities. The informal sector is characterized by what many Cubans call sociolismo. In addition, petty corruption in state industries, such as the pilferage of state assets to sell on the black market, is still common.
Class privilegeWhile the form of government of Cuba is theoretically opposed to class privilege, preferential treatment exists for those who are members of the Communist Party or who hold positions of power within the government. Access to transportation, work, housing, university education and better health care are a function of status within the government or the Communist Party. For instance, in order to enter university, students are required to pass an entry examination to show they possess the basic knowledge required. In order to take this examination students need a letter from the Committee for the Defense (CDR) CDR of the Revolution vouching for their "political and moral background". It is reported that often people are unable to take the examinations because their letter from the CDR was unfavorable. In one case a student was not allowed to take the examination as the letter stated that he "had friendly relations with elements who wished to leave the country"
Investment Agency:Centro de Promoción de Inversiones
Provinces and municipalities
Too -slow cities (Havana)
Maybe tourists love the old world colonial charm, but Cuba is now celebrating a half-century of economic decay. Thanks, Fidel. You can surely be thanked for the seemingly no cars on the road made after 1968.
Fourteen provinces and one special municipality (the Isla de la Juventud) now compose Cuba. These in turn were formerly part of six larger historical provinces: Pinar del Río, Habana, Matanzas, Las Villas, Camagüey and Oriente. The present subdivisions closely resemble those of Spanish military provinces during the Cuban Wars of Independence, when the most troublesome areas were subdivided. .....
The provinces are further divided into 170 municipalities.
Summary
See also
External Links
External Links
Data
more: https://www.cia.gov/library/publications/the-world-factbook/geos/cu.html
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