Cuban Economy
Although the Cuban economy may be thought of as to some as a completefailure, the command system structure can still be an effective way of creating asuccessful economy, if the correct steps are taken in it's planning. From the 1960'srevolution to the 1990's collapse of russia, the soviet union managed to maintain theCuban economy by trading them sugar in return for oil(http://lanic.utexas.edu/la/cb/cuba/asce/cuba1/panel.html). The USSR paid "higher thanmarket prices" for Cuban cane, and Cuba paid "lower than market prices" for Russianpetroleum products. This arrangement which Cuba benefited from, allowed Castro toprovide benefits to the citizens such as higher education, free total medical care, andsubsidized food and housing. Now, ever since the deal with the Soviet Union hascollapsed, the Cuban economy has fallen by 35% from 1989 to 1993(www.odci.gov/cia/publications/factbook/index.html). Instead of the island beingmaintained or enhansed, it is barely be sustained. Although the lack of aid from theSoviet Union has had a great influence in the Cuban economy, it still has some hopebecause of increased tourism, agricultural trade and additional US dollars.
When soviet forces were defeated in 1989 and an end to Sovietsubsidies was realized, the Cuban economy suffered the equivalent of an economicshutdown. The Government stillcontinues to discuss the concern of the growing number of the self-employed, and the increasing disparity in wealth. The economy dropped even further from the result ofinherent inefficiencies of the Cuban industrial base. The government also holds a primary role in the Cubaneconomy and controls practically all foreign trade. In the Cuban marketplace, the number of self-employed workers has slowlyincreased from 160,000 in the early 1990's to able 250,000 today(http://www. The government controls things such as the quantity of each good that is to be importedand exported, prices of goods and services, wages, housing. This would have been meant to limit the amount of fresh investmententering Cuba and minimize most forms of normal contact. The underlying plan was thatthe form of pressure used would lead to the demise of the political power of Fidel and Raul Castro and a rapid transition todemocracy (http://www. In 1996, an act to seek international sanctions against the Castro government inCuba was put into place, to plan for support of a transition of government leading to ademocratically elected government in Cuba, and for other purposes as well . The governments efforts to reducesubsidies to loss-making enterprises and shrink the money supply caused the blackmarket rate to decrease rapidly. The State and private farms were authorized to sell any of theirabove quota production at unrestricted prices, have broadened legal consumptionalternatives and reduced black market prices.
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