Cuba

F

Commerce and Trade

Cuba’s principal exports are sugar, which normally accounts for almost 75 per cent of export earnings, minerals, citrus fruit, tobacco, fish, and livestock. Its principal imports are oil and oil products, food, machinery, and chemicals. Although these have not changed much, there has been a dramatic shift in Cuba’s main markets. On the eve of its dissolution, the USSR accounted for more than 80 per cent of Cuba’s exports and 66 per cent of its imports. Today, Russia is an important trading partner still, but other countries, notably Canada, Spain, and Mexico, have taken over as Cuba’s main trading partners. Trade with Latin America has been an important growth area, rising from 7 per cent of Cuba’s foreign trade in 1990 to 20 per cent in 1994.

The impact of the dissolution of the USSR and the Eastern bloc can be seen in the fact that the value of Cuba’s exports dropped to about US$1,300 million in 1994, compared with more than US$8,000 million in 1989. Worsening terms of trade with higher oil prices and lower nickel prices contributed to the declining earnings, as did the US embargo. However, during 1995 and 1996 the situation began to improve somewhat. In 1995 export earnings were up 20 per cent to US$1,600 million, with a further rise expected in 1996 thanks to an improved sugar harvest and increased nickel production. Spending on imports was slashed during the same period, with extremely detrimental effects on local agriculture and industry. Even so, Cuba was still running a significant balance of trade deficit. In 1995 it stood at about US$500 million. In 2001 the total value of exports was US$1,665 million, while imports totalled US$5,251 million.

The influence of right-wing Cuban exile groups in the United States has ensured the US economic blockade of Cuba has been maintained, despite the United States’ lack of international support on this issue. In late 1996, for example, the UN General Assembly voted for the fifth consecutive year for an end to the blockade. All EU members voted for the resolution, which was passed by 137 to 3, with 25 abstentions. The November 2000 UN vote on ending the embargo showed the United States’ isolation even more clearly, with 167 votes in favour and only 3 votes against, with 4 abstentions. Only Israel and the Marshall Islands supported the United States.

In March 1996 the US Congress tightened the blockade further when President Bill Clinton passed the much-delayed Helms-Burton Act. This legislation allows US citizens to sue foreign companies or individuals investing in or profiting from property or businesses in Cuba that were expropriated from US companies or individuals after the 1959 revolution. It additionally provides for such foreign companies or individuals to be barred from entering the United States. The act was strongly denounced by Canada, Mexico, the Caribbean states, and the EU as an infringement of international free trade. Action in the international courts and threats of retaliatory legislation by Canada and the EU, forced Clinton first to suspend implementation of Helms-Burton and then, in January 1997, to waive indefinitely implementation of the third-party provisions within the act. However, in April the US House of Representatives passed legislation tightening the provisions in the act.

Not all United States legislative action on Cuba has been wholly negative though, as the US Congress passed a bill, signed into law by President Clinton in October 2000, which relaxed the US embargo on Cuba by allowing the sale of food and medicine. Some see this as a step towards a full removal of sanctions against Cuba, which farming and business interests in the United States have long lobbied for, in order to gain access to the Cuban market. Cuban-American pressure nevertheless managed to prevent government and private bank financing for the sales, vastly reducing their impact. The law also tightened restrictions on Americans travelling to Cuba. In 2001 food exports to Cuba from the US began again after a period of 40 years.

Cuba’s foreign debt was reported at US$11,000 million in July 1996, equivalent to 46 per cent of GDP. Because of the US blockade, Cuba has been unable to restructure its debt and receive fresh, long-term credits. Instead the country has been forced to rely on short-term, high-interest credits, such as those negotiated with ten European banks to finance inputs for the 1995-1996 sugar crop.

In the past few years Cuba has been pursuing closer economic ties with nations in the Caribbean region. The loss of Soviet financial assistance and trade means Cuba has to look more to its neighbours as outlets for its products. In July 2000, Cuba signed a trade agreement with the Caribbean Community and Common Market (CARICOM) which will expand trade by eliminating duties on imports. Furthermore, Cuba announced in 2000 that it will seek full membership of the African, Caribbean, and Pacific Group of States (the ACP Group), an organization Cuba has had observer status with since 1998.

G

Tourism

Tourism is now seen as the sector with the greatest capacity to generate foreign exchange and provide employment. It is already the largest single foreign exchange earner, generating US$850 million in 1994 and topping US$1,000 million in 1996. Foreign investment has been encouraged and there are many joint ventures. In 1996 the number of visitors rose by 35 per cent to exceed 1 million for the first time, having risen steadily each year during the 1990s despite political upheavals and hurricanes. A target of 2.5 million visitors was set for 2000 though the Cuban tourist industry was hit somewhat by the terrorist attacks on the United States in 2001. In 1992, three years after first applying, Cuba was admitted to the Caribbean Tourism Organization.

H

Labour

Self-employment was legalized in 1993, but the vast majority of workers are still employed in the state sector, where they are organized into 23 unions grouped in the Workers Central Union of Cuba. Unemployment and underemployment levels have risen markedly since the early 1990s as a result both of the severe economic recession and of the recovery measures instituted by the government, such as the reduction of subsidies to loss-making state enterprises. According to some estimates up to 40 per cent of the workforce is underemployed or unemployed. Under legislation introduced in September 1994, workers made redundant must be assigned to other jobs, or to strategic social or economic tasks. If this is not possible they are paid 60 per cent of their previous salary.

I

Transport

All of Cuba’s public transport is controlled by the Ministry of Transport. In 1992 there were 4,807 km (2,987 mi) of public railway, 147 km (91 mi) of which were electrified. In 1996 the total length of Cuba’s roads was estimated at 27,700 km (37,814 mi), of which almost half are paved. In 1997 there was a ratio of 32 vehicles for every 1,000 people. There are international airports at Havana, Santiago de Cuba, Varadero, Holguín, and Camagüey. The state airline, Cubana, provides internal and some international flights.

J

Communications

In Cuba, radio and television is state controlled by Instituto Cubano de Radio y Televisión. There are five national radio networks, one international network, and several provincial and municipal stations. In 1997 there were an estimated 4 million radios. Two television channels broadcast in Cuba, and in 2000 there were about 3 million televisions. Since 1990 there has been only one national daily newspaper, Granma, which is the official Communist Party organ.