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Cuba under Castro

By Terence Hilton-Clarke

©Copyright 1996

Castro eventually assumed full control of Presidential power in July 1959. By this time, a number of social and economic reforms had already been instituted. While Castro did not openly express any Communist sentiments at this time, it seems that many of these reforms were initiated as a response to the social inequalities and U.S. domination of the preceding decades.Nevertheless, these policies had socialist leanings and, as time progressed, they became more and more radical, while, on the international front, U.S. opposition to the Castro regime increased. The next three decades would see Castro switching his affinity to the East Bloc, while his gradual commitment to the Communist cause would lead to Cuba's international isolation - a situation that occurred especially after the collapse of the U.S.S.R.



Castro's economic policy, up to 1972, passed through no less than four different phases. The initial period ( 1959 - 1963 ) saw rapid agricultural reform that began with the establishment os the Instituo Nacional de Reforma Agraria ( INRA ). One of its primary functions was to carry out the First Agrarian Reform Law, which was passed in May 1959. According to its provisions, properties in excess of 402.3 hectares were proscribed; the upper limit for especially productive land was raised to 1342 hectares; large estates were to be worked as co-operatives; anyone cultivating up to 67 hectares was given ownership of that land and a minimum of 27 hectares was given to those who were already working on the land. ( Mac Ewan, 1981 ). The seizure of American owned ranches would have bitter recriminations, which would be reflected in the Cuban Liberty and Solidarity Act of March 1996. The initial step of Castro's economic policy involved a wider concentration on agriculture for which there were two main reasons; the first was practical : sugar was the only viable means of foreign exchange needed to purchase machinery, fuel and other elements which were necessary components of economic modernization. Furthermore, Cuba's main lifeblood was sugar, and it was for this commodity that the U.S.S.R. was willing to enter into long-term agreements regarding its purchase. In February 1960, Soviet Deputy Premier, Anastas Mikoyan, concluded the first trade agreement by which the U.S.S.R. would buy 425.000 tons of Cuban sugar in 1960; they would purchase one million tons annually for the next four years while granting the Cuban government $ 100 million in "long-term credits and technical assistance." {Gonzales ( 1974) .

The U.S. then cut Cuba's sugar quota, thus exposing the island's economy to potential ruin. Castro then responded by nationalizing all ranches and factories previously operated by U.S. companies. In January 1961, outgoing U.S. President, Dwight D. Eisenhower, severed all diplomatic relations with Cuba. An economic embargo was imposed later that year.
The second economic phase occurred from 1963 to 1965 and involved a combined reliance on sugar, but with a greater concentration on industrialization, in the hope of breaking this reliance.
The second Agrarian Reform Law (1963 ) expropriated the lands of those holding more than 67 acres. These, in turn, were consolidated into state owned farms which also replaced co-operatives. By this time, the state now held 76% of total land and 63% of cultivated land. In the shift away from agricultural to the non-agricultural and industrial spheres, total investment in agriculture fell from 29.2% of total expenditure to 24.3% from 1962- 63. Meanwhile, investment in industry rose from 23.1% to 31.6%. This relatively brief period saw a greater concentration on developing other social sciences such as housing, education, transportation and communication. As such, this period saw the reduction of cane acreage to make way for new crops and the erection of several new factories.

The attempt at industrialization brought many problems. Its eventual failure was rooted in the general lack of raw materials and other resources, as well as the huge import bill from the U.S.S.R. It was on the basis of these facts that Castro decided to put industrialization on hold, while re-shifting the focus on increasing sugar production and developing and diversifying the agrarian sector. In summary: this "Agro-industrial" strategy saw a relocation of resources to the countryside, a shift in emphasis away from industrial and urban centres and a heavy investment on agriculture by the late 1960's, with a corresponding dip in expenditure on social resources such as housing and education.
The agricultural drive was to culminate in the goal of the 10 million ton sugar harvest scheduled for 1970. An impossible venture, it nonetheless captivated national attention as everything was concentrated on realizing this goal.

In 1966, investment in agriculture rose to 40.4% as compared to spending on industry which fell to 16.7% of total expenditure that year. The demand for labour required by the sugar industry, led to a huge labour-mobilization programme that involved workers from other sectors voluntarily leaving their jobs to work in the cane fields.
Students from secondary schools and colleges ( 160.000 by 1968 ) were also encouraged to lend a hand. Also, women were organized through the committees for the Defence of the Revolution ( C.D.A.'s ). In the end, the drive, predictably, failed. The harvest ( while still a record crop ) amounted to only 8.5 million tons. The failure of this, as well as other economic goals - citrus fruit (only 46.000 out of 100.000 hectares was under cultivation), - rice, coffee, tobacco and milk production - had an extensive impact. Apart from the immense financial losses, there were disruptions in other economic sectors due to the large concentration on agrarian reform. On the plus side the general status of the economy did actually improve.The GMP ( gross material product ) grew by 20% between 1969 and 1970, while industry ( including sugar ) rose by 25%.

The decade of the 1970's witnessed a general economic expansion. Among the economic reforms was a greater concentration on providing material incentives to workers; the decentralization of production units into smaller components; concentration on promoting growth within the livestock sector and an overall commitment towards greater technical efficiency. Such reforms made possible the expansion of education with the construction of 300 boarding type secondary schools in the countryside between 1971 and '75. In the meantime Cuba strengthened its economic ties with the East Bloc. In 1972 it signed a series of pacts with the U.S.S.R. in the areas of financial aid, trade and deferment of Cuban debt payments. In addition, Cuba became a member of the Council for Mutual Economic Assistance (COMECON). By the end of the decade 40% of Cuban foreign trade was being conducted with capitalist countries.

However, Cuba was to be hit by severe problems during the 1980's. In 1985 a drop in oil prices cut hard currency profits earned by Cuba from the re-export of Soviet supplied oil saved through conservation methods. During the previous two years, the country re-exported 2-3 million tons out of the 12 million tons it received, generating 40% of its total hard currency earnings. The Cuban economic strategy of combining sugar cultivation with attempts to build modern industries, required large amounts of exports which contributed to an increase in its hard currency debt from $ 2.8 billion
(1983) to $ 6.1 billion (1987). In 1986 Cuba tried to negotiate debt payments with the Club of Paris : it proved unsuccessful. " The drop in Cuba's credit worthiness made it extremely difficult for Havana to obtain additional loans". ( Gunn, 1993). Despite this, by the late 1980's, the socialist world purchased 63% of Cuban sugar, 73% of the nickel, 95% of the citrus and 100% of electronic goods.

COMECON states in turn provided Cuba with 63% of its food, 80% of its non fuel material food imports, 96% of its fuel, 80% of its machinery and 74% of manufactured goods.
From these facts, it is not hard to imagine the extent of damage done to the Cuban economy when the communist regimes in Eastern Europe started to fall, and the Soviet Union finally collapsed in 1991. By 1989-90, conditions were already so bad, that Castro announced that the island had entered a "special period in the Time of Peace". Under this "plan", a series of austerity measures, originally designed to be enacted during economic isolation, were implemented in the hope of adapting the economy to the new conditions and reinserting it into the world market. By 1991 these adjustments involved the slashing of imports - including foodstuffs, fuel and spare parts - as well as an increase in rationing.


Among the original intentions of the Castro Government was the improvement in the social welfare of the people of the island. This was first evidenced in the sphere of housing. Upon ascension to power in 1959, the new administration immediately reduced private rents (50%) and mortgage rates. Rents were totally abolished in 1960 and within the next 20 years the government financed the construction of several apartment complexes in and around Havana. These included the giant Alamar complex, to the east of the capital, which housed 25.000 factory workers by 1976.

The Castro Government's commitment to education has also served many benefits to Cuban society. During the 1940's and 1950's the illiteracy rate stood at 40%. Schooling was mainly confined to children of upper class backgrounds, while teaching appointments were made on the basis of one's own political leanings. Furthermore, the privilege of education was limited to the major urban centres and only extended into rural areas in a few instances. Public schools were poorly maintained, lacking even some of the most basic materials, such as books. Under Castro many major reforms were instituted. Volunteer teachers were sent out into many rural districts and parochial schools were nationalized. Such moves sought to bring education to large masses who had previously been denied access to this institution. According to Castro: "Without education it is impossible to increase the productivity of our people, without education it is impossible to become a highly industrial country; without education it is impossible to organize the people and the country on higher levels". (Castro on august 16, 1961, Education in Revolution p.23).Thus, education was viewed as an instrumental component in the general plan to reform the Cuban economy and general society as a whole. In this spirit, 10.000 new classrooms were built in rural districts in the late 1960's and travelling libraries were introduced.

The 1970's saw the construction of huge, modern secondary schools in the countryside where students, apart from receiving orthodox teaching in the classroom, also worked in nearby agricultural fields in a move designed to foster revolutionary spirit.Reform was also made at the tertiary educational level. In the late 1980's, 939.900 students attended primary schools, 775.350 attended secondary schools, 262.200 were in other institutions of higher learning, the largest of which was the University of Havana (1728). By 1992, the literacy rate had risen to 99% and 92% of those between the ages of 6 - 14 attended school.

Among other social amenities provided by the Castro government were improvements in health care. In 1959 the government combined more than 50 different health care plans, begun by previous regimes, into a single system. Under this plan, new hospitals were erected and many new doctors were produced by the education system. By the 1980's Cuba had 58.700 hospital beds and 28.100 physicians. Also, the outset of the Castro era saw the erection of "people's stores" where goods, including foodstuffs, were made available to the general public. The Castro government also sought to improve life in the area of social relations; racial discrimination was outlawed and gender equality was promoted. Despite these general improvements, it is necessary to mention that some major discrepancies had appeared in Castro's social milieu, long before the collapse of the Soviet Union. Moral, rather than material incentives hindered worker enthusiasm and by the 1970's shortages of many items meant that strict rationing ( involving long lines ) were already commonplace.


From 1960 to 1991, Cuba found itself heavily entrenched in the Cold War. Castro's socialist policies (especially the nationalization of American owned companies) and his affinity towards the Soviet Union, served to weaken Cuba-United States relations. American opposition to the Castro movement has been highlighted by the Economic Embargo imposed on Cuba in early 1961.The purpose of this embargo was to make Cuba's economic dependence on the U.S.S.R. more costly, while, at the same time, reducing Cuba's showcase appeal to other countries in the region. In April of that year the U.S. backed an invasion force - composed primarily of Cuban-American exiles that trained in Central America. In 1954, the U.S. had supported a similar operation that eventually led to the overthrow of President Jacomo Arbenz. The impression at that time was that Castro was unpopular within Cuba, and that such a movement would eventually garner public support along the way. However, Castro was, ultimately, tipped off about the planned operation and his forces were able to intercept and defeat the invasion force at the Bay of Pigs. In August 1962, another crisis developed when aerial photographs revealed the presence of Soviet missile installations on Cuba. U.S. President, John F. Kennedy, ordered a naval blockage of the island until the missiles were removed. Unknown at the time, the United States had its own Jupiter missiles in Turkey, directed at Russian territory. Eventually, a secret trade-off led to the removal of the weapons from both sites. During the decade, Cuba started a policy of supporting revolutionary movements throughout Latin America.

In the 1970's Castro strengthened ties with the East Bloc. In 1972, five years after he officially confirmed himself a Marxist-Leninist, Castro signed a series of pacts with Eastern European governments - pledging economic aid - while Cuba became a member of COMECON. Cuba's support of rebellion world-wide continued during this decade. In 1975, Cuban troops were sent into Angola to support the MPLA against the South African -backed UNITA forces. United States - Cuba relations did improve during this period - albeit very briefly.In 1977, U.S. President, Jimmy Carter, instituted a policy of reconciliation. This involved the lifting of travel restrictions to Cuba on U.S. citizens, the termination or reconnaissance missions by the U.S. government, the establishment of interest sections in each nation's capital and the conclusion of fishing agreements. But relations soon cooled once again. The U.S. made it clear that in order for relations to be normalized, Cuba had to pay compensation for American property seized by Castro, apart from curbing its involvement in Africa. For the Cubans, negotiations could only proceed further once the U.S. lifted the embargo. The Carter administration then felt the backlash of a number of foreign policy disasters. These included the overthrow of president Somoza in Nicaragua by the Sandanistas and the capture of American hostages in Iran. Carter was made to pay at the polls and he was defeated in the 1980 Presidential elections by Ronald Reagan.

The Reagan administration pursued an aggressive foreign policy from 1981 - 1989. It became apparent that the opportunity for reconciliation with Cuba had been lost and, in 1982, the travel-ban was reinstated. Castro soon encountered many more problems. In 1983 the United States invaded Grenada and forced the exile of Cuban construction workers and advisers - thus ending Castro's relationship with the socialist government there. The late 1980's saw a wave of global change as socialism went out in favour of democratization. Between 1988 and 1990, the communist governments of Eastern Europe ( Poland, Romania, Bulgaria, Czechoslovakia etc. ) fell one by one. Democracy also became the preference in Latin America with military style regimes in Argentina, Brazil, Paraguay and Nicaragua being superseded by popularly elected governments. By the early 1990's Castro had lost his ideological support.

Ultimately, the collapse of the U.S.S.R. in 1991 turned out to be an immense disaster for Fidel Castro. The loss of trade subsidies, served to further cripple the Cuban economy and to isolate the Castro government more than ever before. The loss of Soviet imports and the burden of the soon-to-be strengthened U.S. embargo would combine to make the 1990's a difficult period for Cuba. This would lead to a situation, in which the Cuban leader would be forced to make a number of domestic reforms in order to curb the effect of the economic decline. It would also force a stand-off between Cuba and the United States - a situation in which a peaceable solution has been thrown in the balance.




Historical Background of Cuba before Castro
Part 1

Historical Background of Cuba before Castro
Part 2

Cuba Under Castro

Cuba Since the Fall
of the USSR


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