International Political Economy: Cuba & U.S. RelationsPresentation Transcript
Cuba The Past, Present, and Future of the Trade Embargo
1856 1959 Cuba produces 25% of worlds sugar. Fidel Castro over throws Batista. U.S. intervenes in Cuba Economic crisis U.S. controls over 75% of Cuban industries, railroads, and utilities. Sugar prices collapse
The Rise of Castro
Gained support by promising to abolish dependency on the United States.
Socialist realignment cost over $1 Billion in the first year.
Turned to the Soviet Union for economic help.
Soviet Union accounted for 49.3% of all Cuban trade by 1962.
Part of a series of policy maneuvers designed to remove Castro from power without military force.
Sprang from fear of the close proximity of communist interests to the United States.
The collapse of the Soviet Union plunged Cuba in to economic disparity.
Sanctions on Cuba increased for almost 50 years regardless of political party. Including: after an incident in 1998 under President Clinton and in 2004 under President Bush.
Sanctions would not begin to be reduced until 2009 under President Obama.
Except for publications and other licensed items, no products, technology, or services may be exported from the U.S. to Cuba.
Goods or services of Cuban origin may not be imported into the U.S. directly or through third party countries such as Canada or Mexico.
A total freeze on Cuban assets, both governmental and private, and on financial dealings with the Cuba.
Gifts from the U.S. citizens to immediate family in Cuba must not exceed a value of $200.00 and be sent no more than once a month.
Only persons with certain licenses, may travel to Cuba providing they spend no more than $50.00 per day on non-transportation expenses and no more than $50 per day on transportation expenses.
Currently in Cuba
70th in the world economy
GDP ($51.1 billion)
3:1 import to export trade disparity
Sugar, oil, tobacco, coffee, tourism
Est. GDP growth in 2008: 7%
China, Spain, Germany, and Canada
Literacy rate: 98.8%
Est. Unemployment rate 2008: 1.8%
Defined by low paying government employment: 77%
Future of Cuba
Sanctions have had “little to no effect on changing state policy.”
Castro is still a main political figure after 50 years, even though Raul Castro is now President.
Many interest groups such as the U.S. Rice Federation support lifting the embargo. Cuba would become 2nd largest importer of U.S. rice.
Over 95% of U.N. member nations vote annually for the U.S. to lift the embargo on Cuba
Raul Castro has been calling for a meeting with U.S. on “neutral ground”
April 13, 2009 President Obama lifts some of the restrictions on Cuba including some travel and annual giving.
Sanctions have shown little progress after 50 years.
The international community supports lifting the embargo
Many U.S. interests support lifting the embargo.
Economist predict that in the next 10 years, the Cuban embargo will be lifted and free trade policies will be again embraced.