CUBA continued

                                                  Cuba  continued

As Spain imposed heavy taxes on sugar, the politics shifted with independence as an ideal, but autonomy from Spain actually pursued. The United States talked about annexation and Thomas Jefferson wrote James Madison that annexation of Cuba was desirable. But John Quincy Adams believed in a wait and see attitude and did not support Cuban independence.

The thirty-year struggle for independence covered the years 1868-1898. Spain spent more money to fight Cuba than it spent on all other Latin American countries combined. In the last third of the 19^th century, the struggle slowly resolved many racial problems when several blacks became generals in the liberation army. In 1899 the U.S. intervened and with Spain ended the war for independence without a single Cuban being present. Cuba had a new constitution and became independent in 1901 with a heavy American military context.

The Platt amendment to the Cuban constitution basically said that the U.S. could intervene in Cuba under various circumstances. It was repealed in 1934. U.S. troops left in 1902. In 1940 a new constitution was drawn up that for the first time involved land reform. However, no land reform took place until 1959.

Between 1900-1920 land was selling for six cents an acre and the United States bought a lot of it. In fact, Cuba was the largest overseas investment the United States had, resulting in a big economic boom in Cuba.

During U.S. prohibition (1920-1933) the Mafia contracted with Cuban sugar refineries for molasses for the illicit liquor industry in this country.  With the end of prohibition the Mafia switched to gambling, building casinos.

Batista was an American backed dictator until 1959 when Fidel Castro and his revolutionaries overthrew him. Castro aligned himself with the Russians, which was the end of friendly relations with Cuba for the United States.

When the Soviet Union collapsed and pulled out of Cuba in 1989, the Cuban economy took a nose dive of 34%, hitting bottom in ‘92-’93. No one saw the collapse on the horizon. Cuba had been 83% dependent on Russia for imports, and depended on 92% of imported oil. This produced a tremendous problem throughout the society involving electricity use everywhere. Buses were cut by 75% and the wait for a bus averaged four to five hours!   Everything was scarce and unemployment ran at 70%.

Sugar was the country’s only export. Cuba signed long term agreements to supply sugar to some countries. Tobacco and nickel were the only other resources. The country was desperate for credit. There was a lack of resources, knowledge, and infrastructure. They needed to learn foreign languages to communicate with other countries. They needed to learn skills and how to deal and operate in a free economy. They needed direct foreign investment (DFI) and environmental controls. What an undertaking!

Some of the first foreign direct investment was spent on the airport, telecommunications, and hotels. By 2003 the country was independent of oil imports.  Now it takes only six months to build 100 rooms compared to a two-year time frame a decade ago.

Why would anyone want to be involved in Foreign Direct Investment? There was virtually no self-employment, and when people are desperate they will accept most anything. Then there was the element of being in the right place at the right time or just plain opportunity, and under such circumstances the lender could charge high interest rates.

In the 1980s a 180 pesos would comfortably cover four weeks of living expenses in Cuba. That decreased to covering only 3 ½ weeks and the peso went from 6-7 pesos to the U.S. dollar to 150 peso per one U.S. dollar. The present exchange rate has stabilized at 26 pesos. However, only Cubans use this currency. The U.S. dollar is interchangeable one for one with the convertible peso.  Today 64% of the population has access to the U.S. dollar. The terrible inflation encouraged entrepreneurship, which today seems to be healthy.  In 1980 the service/tourist business comprised only 8% of the economy, today that same business is 65% of the economy.

I asked a couple of young Cubans about prejudice in the country as some people were very dark and some very light with everything in between.  Both times I was told, one is just Cuban, period, and color is not a factor.

         Education through college is free in Cuba.   After teachers fulfill their obligatory 3-4 years of teaching, they often leave the profession and join the tourist industry, because that is where the money is. Every day when we returned to our hotel room the TV had been reprogrammed onto CNN which made me wonder who was cleaning our room, maybe an ex-educator? Everywhere we went we found Cubans very friendly. The Cuban people have maintained their unique identity and culture, and are proud of their revolutionary tradition. 
  
Other posts: Cuban Music 7/11  Cuban drinks 4/11  Old Havana 11/11 Che Guerra 1/12  Impressions 6/12