Cuba Economic Conditions

Cuba Economic Conditions

Cuba’s economic structures underwent a profound transformation following the 1959 revolution. Previously, the entire production system was dominated and regulated by US interests: agriculture was based on the monoculture of cane (which, however, in essence, continues to characterize it), land ownership was highly concentrated and industrial activity was reduced to the transformation of agricultural products. The agrarian reform promoted by the revolutionary government led to a more rational use of land and labor: the large estates were expropriated and divided between state companies, peasant cooperatives and family businesses. The path of industrialization was also attempted, but the scarcity of raw materials and capital did not allow to achieve notable results. A significant growth, however, tertiary activities recorded, especially as regards social services (assistance, health, school, etc.). The 1980s and 1990s were marked by a crisis situation, triggered by the fall in the price of sugar, Cuba United States. In 1991 the interruption of Russian oil supplies at a controlled price had disastrous consequences for industrial production (that of sugar decreased by over 50% in the 1990s), greatly reduced due to lack of energy resources, and the same fate befell reflection, to exports; as a result, per capita GDP underwent a constant and sometimes drastic decline.

All this has had serious repercussions on the standard of living of the population, forced to face the considerable problems posed by the shortage of food and other basic necessities (electricity, medicines, fuel). Furthermore, the black market has increased enormously and as much expansion has had phenomena of social degradation, such as prostitution, fueled in particular by the growing development of tourism, the only economic activity that has shown a strong expansion since the last years of 20th century. This phenomenon has obviously led to an exponential growth of tourist infrastructures, often built with foreign capital. The government, pressured by the disastrous economic situation, was forced in 1993 to legalize the possession of dollars, as well as to allow investments of foreign capital and to create some free zones. So many have a risen joint ventures in the tourism sector, in the mining sector and in the vital sugar sector. The other government concession, namely the possibility of setting up privately run commercial, craft and service activities, has favored the proliferation of small family businesses. The share of cooperative and individual ownership of land has also increased (state ownership has fallen to about 30%) and cooperatives have been allowed to sell on the free market a small part of the production in excess of the share compulsorily ceded to the state. Furthermore, the rationalization of the state apparatuses was started, with the reduction of employees in the public administration, as well as monetary and fiscal reforms; the welfare role of the state has been reduced, now unsustainable given the difficult financial situation,

According to, agriculture, which occupies 26% of the active population, is still the basis of the Cuban economy and the two main crops are still sugar cane and tobacco. The cultivation of sugar cane occupies over a third of the arable land; that of tobacco is widespread in the eastern part of the island and is directed towards the production of high-quality qualities, in great demand on the international market. Havana is an important world center of tobacco manufacturing. Tropical fruits (pineapples, bananas, grapefruits) are exported, while coffee production is mainly destined for the domestic market. Self-sufficiency has almost been achieved for cereals, especially corn and rice, which play an important part in the local diet together with potatoes, sweet potatoes and cassava. In constant progress are cattle breeding and fishing. As regards the resources of the subsoil, the presence of nickel, chromite, cobalt and cupriferous minerals should be noted. Prospecting in the seabed has allowed an increase in oil extraction.

In the secondary sector, the most important activities are the sugar industry (undergoing restructuring, with the closure of obsolete plants) and tobacco; less important are the textile and cement industries, the factories of canning, fertilizers and tires. A steel mill was built in the capital and oil refineries in Havana and Santiago de Cuba. The road network (60,858 km, of which about half are asphalted) and the rail network (about 4,400 km) are well developed. Maximum port and airport is Havana; other major airports: Santiago, Varadero, Camag├╝ey.

Cuba agriculture

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