Reply #30: Cuba made two major changes after [View All]

[Yupster]

the Soviet Union fell and withdrew its annual subsidies to Cuba's economy. They are both controversial but were deemed necessary as the GDP was in free fall from 1989 to 1993 and dropped approx. 50 %.

1. They made US dollars legal currency. This allowed Cuban refugees living in Florida to send the precious hard currency to their relatives on the island was a much better help to the economy than Fidel's announcement that the government had bought 700,000 bicycles to replace the cars that had no fuel and the government had imported 100,000 oxen to replace the plows and had plans for 100,000 more. While the dollars have helped the economy tremendously, they've also led to problems.

Cuba now has two economies operating side by side. There are the people who have access to hard currency, and the other less fortunate ones who don't. Since black-Cubans are less likely to have relatives in the US than white ones, it is also opening a larger racial economic gap than Cuba had before.

2. The decision to allow for a great expansion of foreign tourism was another controversial decision that couldn't be avoided. While again the Europeans bring in much needed hard currency which keeps the economy afloat, it has also led to social and economic problems.

One problem that there are now large areas of beautiful places where Cubans are not allowed to go unless they are servants. Another problem is that any job dealing with tourists pays far better than jobs paying in Cuban currency. You make much more as a cab driver for tourists than as a professor or doctor. College attendance has decreased noticably.

Also, Raul's decision to put army generals over the major resorts and hotels is just made to order for corruption, though it does increase the army's loyalty to the regime should Fidel die as each general will have his supply of hard currency at stake should the regime change.

In all these cases, I think Fidel was well aware of the problems that he'd be creating by these changes, but he really didn't have much choice after Russia withdrew its subsidies. Perhaps Venezuela will step in and take Russia's place.