New Spain", with Cuba visible in the center.
Part of a series on the
History of Cuba
The island of Cuba was inhabited by numerous Mesoamerican tribes prior to its discovery by the Italian explorer Christopher Columbus in 1492. After Columbus' arrival, Cuba became a Spanish colony, ruled by a Spanish governor in Havana. In 1762, Havana was briefly occupied by Great Britain, before being returned to Spain in exchange for Florida. A series of rebellions during the 19th century failed to end Spanish rule. However, increased tensions between Spain and the United States, which culminated in the Spanish-American War, finally led to a Spanish withdrawal in 1898, and in 1902 Cuba gained formal independence.
In the years following its independence, the Cuban republic saw significant economic development, but also political corruption and a succession of despotic leaders, culminating in the overthrow of the dictator Fulgencio Batista by the 26th of July Movement, led by Fidel Castro, during the 1953–9 Cuban Revolution. Cuba has since been governed as a socialist state by the Communist Party, although Castro himself stepped down as leader in 2008, being replaced by his brother Raúl Castro. Cuba has been politically and economically isolated by the United States since the Revolution, but has gradually gained access to foreign commerce and travel.
- 1 Pre-Columbian history
- 2 Spanish discovery and early colonization
- 3 Arrival of African slaves
- 4 The 16th–18th centuries: Cuba under attack
- 5 The 19th century: years of upheaval
- 6 1895–98: War of Independence
- 7 The Cuban theatre of the Spanish-American War
- 8 First U.S. occupation and the Platt amendment
- 9 Cuba in the early 20th century
- 10 1953–59: the Cuban Revolution
- 11 Castro's Cuba
- 11.1 Politics
- 11.2 Break with the United States
- 11.3 Bay of Pigs invasion
- 11.4 The Cuban missile crisis
- 11.5 Military build-up
- 11.6 Suppression of dissent
- 11.7 Emigration
- 11.8 Involvement in Third World conflicts
- 11.9 Intelligence cooperation between Cuban and the Soviets
- 12 Modern era
- 13 See also
- 14 References
- 15 Bibliography and further reading
- 16 External links
tate-run enterprises overseen by the Cuban government, though there remains significant foreign investment and private enterprise in Cuba. Most of the means of production are owned and run by the government, and most of the labor force is employed by the state, although in recent years, the formation of cooperatives and self-employment has been encouraged by the Communist Party.
In the year 2000, public sector employment was 76% and private sector employment was 23% compared to the 1981 ratio of 91% to 8%.Capital investment is restricted and requires approval by the government. The Cuban government sets most prices and rations goods to citizens. In 2009, Cuba ranked 51st out of 182 with an HDI of 0.863; remarkably high considering its GDP per capita only places it 95th.Public services and transport in Cuba however are regarded to be second-rate compared with its more developed counterparts on the mainland.
In the 1950s, Cuba had a vibrant but extremely unequal economy, with large capital outflows to foreign investors. In the 1950s, Cuba'sgross domestic product (GDP) per capita was roughly equal to that of contemporary Italy, and significantly higher than that of countries such as Japan.The country compared favourably with Spain and Portugal on socioeconomic measures. Furthermore, its income in 1929 was reportedly 41% of the US, thus higher than in some Southern states of the US, such as Mississippi and South Carolina The country has made significant progress towards a more even distribution of income since the Revolution and being placed under economic embargo by the United States. Following the collapse of the Soviet Union, Cuba's GDP declined by 33% between 1990 and 1993, partially due to loss of Soviet subsidies, and partly due to a crash in sugar prices in the early 1990s. Yet Cuba has managed to retain high levels of healthcare and education.
Cubans receive low housing and transportation costs, free education, and health care and food subsidies. Corruption is common, though allegedly lower than in most other countries in Latin America. However, in their book, Corruption in Cuba, Sergio Diaz-Briquets and Jorge F. Pérez-López Servando state that Cuba has "institutionalized" corruption and that state-run monopolies, cronyism, and lack of accountability have made Cuba one of the world's most corrupt states".
- 1 History
- 2 Energy production
- 3 Government policies
- 4 Agriculture
- 5 Industry
- 6 Tertiary industries
- 7 Poverty
- 8 International trade
- 9 Foreign investment
- 10 Self-employment
- 11 Public facilities
- 12 Connection with Venezuela
- 13 Other statistics
- 14 References
- 15 External links
Prior to the Cuban Revolution, Cuba had a one-crop economy whose domestic market was constricted. Its population was characterized by chronic unemployment and deep poverty. United States monopolies like Bethlehem Steel Corporation and Speyer gained control over Cuba's national resources, from which they made huge profits. The banks and the country's entire financial system, all electric power production, and most industry was dominated by US capital.[dubious – discuss] US monopolies owned 25 percent of the best land in Cuba, and more than 80 percent of all farm lands were occupied by sugar and livestock-raising latifundia. 90 percent of the country's raw sugar and tobacco exports was sent to the USA. Before the Revolution, most Cuban children were not included in the school system. There was almost no machine-building industry in Cuba. During this period in the 1950s, Cuba was as rich per capita as Italy was, and richer than Japan.
87 percent of urban homes had electricity, but only 10 percent of rural homes did. Only 15 percent of rural homes had running water. Nearly half the rural population was illiterate, as was about 25 percent of the total population. Poverty and unemployment in the rural areas forced desperate residents to migrate to Havana, where there was high levels of crime and prostitution. More than 40 percent of the Cuban workforce in 1958 was either underemployed or unemployed. Schools for blacks and mulattoes were vastly inferior to those for whites. Afro-Cubans had the worst living conditions and held the lowest paid jobs.
During the Revolutionary period, Cuba was one of the few developing countries to provide foreign aid. Foreign aid began with the construction of six hospitals in Peru in the early 1970s.
Foreign aid expanded later in the 1970s to the point where some 8000 Cubans worked in overseas assignments. Cubans built housing, roads, airports, schools, and other facilities in Angola,Ethiopia, Laos, Guinea, Tanzania, and other countries. By the end of 1985, 35,000 Cuban workers had helped build projects in some 20 Asian, African and Latin American countries.
In 1986 Cuba defaulted on its $10.9 billion debt to the Paris Club. In 1987, Cuba stopped paying entirely on the $10.9 billion Paris Club debts. In 2002 Cuba defaulted on $750 million in Japanese debts.
Some have attributed Cuban economic growth to Soviet subsidies. However, comparative economic data from 1989 showed that the amount of Soviet aid was in line with the amount of Western aid to many Latin American countries.
The prostitution of children with lax penalization and human trafficking for profit is reported in Cuba, as a source country for the global black market industry.  Cuba has been ranked in the lowest global rating of Tier 3, which is defined for a government's failure to meet minimum standards to prevent trafficking and are not making significant efforts to do so.
Main article: Special Period
The Cuban economy is still recovering from a decline in gross domestic product of at least 35% between 1989 and 1993 due to the loss of 80% of its trading partners[clarification needed] and Sovietsubsidies. This loss of subsidies coincided with a collapse in world sugar prices. Sugar had done well from 1985-1990, and crashed precipitously in 1990-1991, and did not recover for five years. Cuba had been insulated from world sugar prices by Soviet price guarantees.
This era was referred to as the "Special Period in Peacetime" later shortened to "Special Period". A Canadian Medical Association Journal paper claimed that "The famine in Cuba during the Special Period was caused by political and economic factors similar to the ones that caused a famine in North Korea in the mid-1990s, on the grounds that both countries were run by authoritarian regimes that denied ordinary people the food to which they were entitled when the public food distribution collapsed, and priority was given to the elite classes and the military." Other reports painted an equally dismal picture, describing Cubans having to resort to eating anything they could find, from Havana Zoo animals to domestic cats. But although the collapse of centrally planned economies in the Soviet Union and other countries of the Eastern bloc meant that Cuba experienced severe economic difficulties, which led to a drop in calories per day from 3052 in 1989 to 2600 in 2006, mortality rates show a remarkably slight impact on public health thanks to the priority given by the government to maintaining a social safety net.
The government has undertaken several reforms in recent years[when?] to stem excess liquidity, increase labour incentives, and alleviate serious shortages of food, consumer goods, and services. To alleviate the economic crisis, the government introduced a few market-oriented reforms including opening to tourism, allowing foreign investment, legalizing the U.S. dollar, and authorizing self-employment for some 150 occupations. (This policy was later partially reversed, so that while the U.S. dollar is no longer accepted in businesses, it remains legal for Cubans to hold the currency.) These measures resulted in modest economic growth. The liberalized agricultural markets introduced in October 1994, at which state and private farmers sell above-quota production at free marketprices, have broadened legal consumption alternatives and reduced black market prices. Another (less visible) cause of the economic decline was the decrease in the world demand and world price for sugar, gradually replaced by corn syrup, 30 % cheaper, after 1985.
Government efforts to lower subsidies to unprofitable enterprises and to shrink the money supply caused the semi-official exchange rate for the Cuban peso to move from a peak of 120 to the dollar in the summer of 1994 to 21 to the dollar by year-end 1999. Living conditions in 1999 remained well below the 1989 level. New taxes introduced in 1996 have helped drive down the number of self-employed workers from 208,000 in January 1996.
Havana announced in 1995 that GDP declined by 35% during 1989-93, the result of lost Soviet aid and domestic inefficiencies. The drop in GDP apparently halted in 1994, when Cuba reported 0.7% growth, followed by increases of 2.5% in 1995 and 7.8% in 1996. Growth slowed again in 1997 and 1998 to 2.5% and 1.2% respectively. One of the key reasons given was the failure to notice that sugar production had become dramatically uneconomic. Reflecting on the Special period Cuban president Fidel Castro later admitted that many mistakes had been made, "The country had many economists and it is not my intention to criticize them, but I would like to ask why we hadn’t discovered earlier that maintaining our levels of sugar production would be impossible. The Soviet Union had collapsed, oil was costing $40 a barrel, sugar prices were at basement levels, so why did we not rationalize the industry?"
GDP per capita of Cuba and some other Caribbean countries, based on Maddison and current Cuban statistics
Due to the continued growth of tourism, growth began in 1999 with a 6.2% increase in GDP. Growth in recent years has picked up significantly, with a growth in GDP of 11.8% in 2005 according to official Cuban information. In 2007 the Cuban economy grew by 7.5%, below the expected 10%, but higher than the Latin American average rate of growth. Accordingly, the cumulative growth in GDP since 2004 stood at 42.5%.[clarification needed]
Overview on the post-revolution economic performance
Cuban-born US economist Carmelo Mesa-Lago has published an account on the ″Economic and Social Balance of 50 Years of Cuban Revolution″. According to Mesa-Lago, Cuba’s performance has been overwhelmingly negative with regard to the economic indicators. Cuba’s position fell within the region for 87% of those indicators and for the rest of the 13% it remained the same. According to him Cuba ranked third in the region in 1958 in terms of GDP per capita, surpassed only by Venezuela and Uruguay. It had descended to 9th, 11th or 12th place in the region by 2007. At the same time, Cuba's social indicators showed a more positive development.
" Either we change course or we sink."
Since Reforms were introduced, over 400K Cubans have signed up to be entrepreneurs. As of 2012, the government publishes a list of 181 official jobs no longer under their control, such as taxi driver, construction worker, and shopkeeper. Licenses may also be purchased for becoming a mule driver, palm tree trimmer, well-digger, button coverer and "dandy" - gentleman in traditional elegant white suit and hat. Where imports are double exports, and doctors earn £15/month, families may supplement incomes with extra jobs, and the resultant increased taxes may shore up the economy. In the last decade, half the country's sugar mills have closed down, and tourists now ride factory steam locomotives. Some 3M visitors bring nearly £2M/ yearly (2012). >150K farmers have signed up to lease land from the government for bonus crops. Before, home-owners were only allowed to swap; now buying and selling has created a real-estate boom. A new Havana fast-food burger pizza restaurant, La Pachanga, started in the owner's home, serves 1K meals on a Saturday at £3, the weekly government wage. 
In 2007, Raúl Castro's administration hinted that the purchase of computers, DVD players and microwaves would become legal. However, monthly wages remain less than 20 U.S. dollars.Mobile phones, which have been restricted to Cubans working for foreign companies and government officials, have become legalized. The new program could put phones in the hands of hundreds of thousands of Cubans.
In 2010, Fidel Castro, in agreement with Raúl Castro's reformist sentiment, admitted that the Cuban model based on the old Soviet model of centralized planning was no longer sustainable for the Cuban economy. While both leaders remain committed to dialectical materialism, they are encouraging the creation of a co-operative variant of socialism where the state plays a less active role in the economy, and the formation of worker-owned co-operatives and self-employed enterprises is being encouraged.
To remedy Cuba's economic structural distortions and inefficiencies, the Cuban mod