1. Page 1 of 16
History of Cuba
 History of Cuba
Colonial Rule: The history of Cuba began with the arrival of Christopher Columbus in
1492 and the subsequent invasion of the island by the Spaniards. Aboriginal groups—the
Guanahatabey, Ciboney, and Taíno—inhabited the island but were soon eliminated or
died as a result of diseases or the shock of conquest. Thus, the impact of indigenous
groups on subsequent Cuban society was limited, and Spanish culture, institutions,
language, and religion prevailed. Colonial society developed slowly after Spain colonized
the island in the sixteenth and seventeenth centuries; pastoral pursuits and agriculture
served as the basis of the economy. For the first three centuries after the conquest, the
island remained a neglected stopping point for the Spanish fleet, which visited the New
World and returned to Spain with the mineral wealth of continental America.
Cuba awakened dramatically in the nineteenth century: The growth of the United
States as an independent nation, the collapse of Haiti as a sugar-producing colony,
Spanish protective policies, and the ingenuity of Cuba’s Creole business class all
converged to produce a sugar revolution on the island. In a scant few years, Cuba was
transformed from a sleepy, unimportant
island into the major sugar producer in
the world. Slaves arrived in increasing
numbers; large estates squeezed out
smaller ones; sugar supplanted tobacco,
agriculture, and cattle as the main
occupation; prosperity replaced poverty;
and Spain’s attention replaced neglect.
These factors, especially the latter two,
delayed a move toward independence in
the early nineteenth century. While
most of Latin America was breaking
with Spain, Cuba remained loyal.
The Independence Struggle and Beginning of U.S. Hegemony: Toward the end of the
nineteenth century, Cuban loyalty began to change as a result of Creole rivalry with
Spaniards for the governing of the island, increased Spanish despotism and taxation, and
the growth of Cuban nationalism. These developments combined to produce a prolonged
and bloody war, the Ten Years’ War against Spain (1868–78), but it failed to win
independence for Cuba. At the outset of the second independence war (1895–98), Cuban
Figure: Cristóbal Colón (Christopher Columbus) claims the
New World. On 27 October 1492 Columbus sighted Cuba,
he named the island Juana

2. Page 2 of 16
independence leader José Martí was killed. As a result of increasingly strained relations
between Spain and the United States, the Americans entered the conflict in 1898. Already
concerned about its economic interests on the island and its strategic interest in a future
Panama Canal, the United States was aroused by an alarmist “yellow” press after the USS
Maine sank in Havana Harbor on February 15 as the result of an explosion of
undetermined origin. In December 1898, with the Treaty of Paris, the United States
emerged as the victorious power in the Spanish-American War, thereby ensuring the
expulsion of Spain and U.S. tutelage over Cuban affairs.
On May 20, 1902, after almost five years of U.S. military occupation, Cuba launched
into nationhood with fewer problems than most Latin American nations. Prosperity
increased during the early years. Militarism seemed curtailed. Social tensions were not
profound. Yet corruption, violence, and political irresponsibility grew. Invoking the 1901
Platt Amendment, which was named after Senator Orville H. Platt and stipulated the right
of the United States to intervene in Cuba’s internal affairs and to lease an area for a naval
base in Cuba, the United States intervened militarily in Cuba in 1906–9, 1917, and 1921.
U.S. economic involvement also weakened the growth of Cuba as a nation and made the
island more dependent on its northern neighbor.
Rising Authoritarianism (1901–1930s): The 1930s saw a major attempt at revolution.
Prompted by the cruel dictatorship of Gerardo Machado y Morales (president, 1925–33),
the economic hardships of the world depression, and the growing control of their
economy by Spaniards and North Americans, a group of Cubans led by students and
intellectuals sought radical reforms and a profound transformation of Cuban society.
Following several small army revolts, Machado was forced to resign and flee the country
on August 12, 1933. Sergeant Fulgencio Batista y Zaldívar, unhappy with proposed
reductions of pay and restrictions of promotions, joined forces with the militant students
on September 4 and overthrew the U.S.-backed regime of Carlos Manuel de Céspedes
(the younger). By making the military part of the government and allowing Batista to
emerge as self-appointed chief of the armed forces, the Sergeants’ Revolt marked a
turning point in Cuba’s history. On January 14, 1934, Army Chief Batista also brought to
an end the short-lived provisional presidency of Ramón Grau San Martín (president,
1933–34) by forcing him to resign. Although the reformers attained power five months
later and Machado’s overthrow was supposed to mark the beginning of an era of reform,
their revolution failed. Batista (president, 1940–44; dictator, 1952–59) and the military
emerged as the arbiters of Cuba’s politics, first through de facto ruling and finally with
the election of Batista to the presidency in 1940.
The end of the early Batista era: during World War II was followed by an era of
democratic government, respect for human rights, and accelerated prosperity under the
inheritors of the 1933 revolution—Grau San Martín (president, 1944–48) and Carlos Prío
Socarrás (president, 1948–52). Yet political violence and corruption increased. Many saw

3. Page 3 of 16
these administrations of the Cuban Revolutionary Party
(Partido Revolucionario Cubano—PRC), more commonly
known as the Authentic Party (Partido Auténtico), as having
failed to live up to the ideals of the revolution. Others still
supported the Auténticos and hoped for new leadership that
could correct the vices of the past. A few conspired to take
power by force.
The Rise of Fidel Castro: Batista’s coup d’état on March 10, 1952, had a profound
effect on Cuban society, leading to doubts about the ability of the Cubans to govern
themselves. It also began a brutal right-wing dictatorship that resulted in the polarization
of society, civil war, the overthrow of Batista, and the destruction of the military and
most other Cuban institutions. Fidel Castro Ruz, a charismatic, anti-U.S. revolutionary,
seized power on January 1, 1959, following his successful revolt against the U.S.-backed
Batista government. As the Castro regime expropriated U.S. properties and investments
and began, officially, on April 16, 1961, to convert Cuba into a one-party communist
system, relations between the United States and Cuba deteriorated rapidly. The United
States imposed an embargo on Cuba on October 19,1960, and broke diplomatic relations
on January 3, 1961, in response to Castro’s expropriations without compensation and
other provocations, such as arrests of U.S. citizens. The failure of the Central Intelligence
Agency (CIA)–sponsored invasion by Cuban exiles in April 1961 (the infamous Bay of
Pigs invasion) allowed the Castro regime to destroy the entire Cuban underground and to
emerge strengthened and consolidated, basking in the huge propaganda value of having
defeated the “Yankees.”
The Cold War Period: Tensions between the two governments peaked during the Cuban
Missile Crisis of October 1962 after the United States revealed the presence of Soviet
missiles in Cuba. Following the imposition of a U.S. naval blockade, the weapons were
withdrawn and the missile bases dismantled, thus resolving one of the most serious
international crises since World War II. A U.S.-Soviet agreement that ended the Cuban
Missile Crisis assured Cuba’s protection from military attack by the United States
Cuba’s alliance with the Soviets provided a protective umbrella that propelled Castro
onto the international scene. Cuba’s support of anti-U.S. guerrilla and terrorist groups in
Latin America and other countries of the developing world, military intervention in
Africa, and unrestricted Soviet weapons deliveries to Cuba suddenly made Castro an
important international contender. Cuba’s role in bringing to power a Marxist regime in
Ernesto "Che" Guevara (14 June
1928 – 9 October 1967) a key
figure of the Cuban Revolution in
his struggle against monopoly
capitalism, neocolonialism, and
imperialism.

4. Page 4 of 16
Angola in 1975 and in supporting the
Sandinista overthrow of the dictatorship of
Nicaragua’s Anastasio Somoza Debayle in
July 1979 perhaps stand out as Castro’s
most significant accomplishments in
foreign policy. In the 1980s, the U.S.
military expulsion of the Cubans from
Grenada, the electoral defeat of the
Sandinistas in Nicaragua, and the peace
accords in El Salvador and Central
America showed the limits of Cuba’s
influence and “internationalism” (Cuban
missions to support governments or
insurgencies in the developing world).
A Continuing Cuban-U.S. Cold War: The collapse of communism in the early 1990s
had a profound effect on Cuba. Soviet economic subsidies to Cuba ended as of January 1,
1991. Without Soviet support, Cuba was submerged in a major economic crisis. The
gross national product contracted by as much as one-half between 1989 and 1993, exports
fell by 79 percent and imports by 75 percent, the budget deficit tripled, and the standard
of living of the population declined sharply. The Cuban government refers to the
economic crisis of the 1990s and the austerity measures put in place to try to overcome it
euphemistically as the “special period in peacetime.” Minor adjustments, such as more
liberalized foreign investment laws and the opening of private (but highly regulated)
small businesses and agricultural stands, were introduced. Yet the regime continued to
cling to an outdated Marxist and caudillista (dictatorial) system, refusing to open the
political process or the economy.
The traditional Cold War hostility between Cuba and the United States continued
unabated during the 1990s, and illegal Cuban immigration to the United States and
human rights violations in Cuba remained sensitive issues. As the post-Soviet Cuban
economy imploded for lack of once-generous Soviet subsidies, illegal emigration became
a growing problem. The 1994 balsero crisis (named after the makeshift rafts or other
unseaworthy vessels used by thousands of Cubans) constituted the most significant wave
of Cuban illegal emigrants since the Mariel Boatlift of 1980, when 125,000 left the
island. A Cuban-U.S. agreement to limit illegal emigration had the unintended effect of
making alien smuggling of Cubans into the United States a major business.
In 1996 the U.S. Congress passed the so-called Helms–Burton law, introducing tougher
rules for U.S. dealings with Cuba and deepening most controversial part of this law,
which led to international condemnation of U.S. policy toward Cuba, involved sanctions
against third-party nations, corporations, or individuals that trade with Cuba. The U.S.
stance toward Cuba became progressively more hard-line, as demonstrated by the
Very busy Fidel.Fidel Alejandro Castro Ruz (born 13 August
1926) was until July 2006 Cuba's President of the Council of
state, Commander in Chief of the armed forces, President of
the Council of Ministers, and First Secretary of the Cuban
Communist Part

5. Page 5 of 16
appointment of several prominent Cuban-Americans to the administration of George W.
Bush. Nevertheless, as a result of pressure from European countries, particularly Spain,
the Bush administration continued the Clinton administration’s policy of suspending a
provision in the Helms–Burton Act that would allow U.S. citizens and companies to sue
foreign firms using property confiscated from them in Cuba during the 1959 Revolution.
Instead, the Bush administration sought to increase pressure on the Castro regime through
increased support for domestic dissidents and new efforts to broadcast pro-U.S. messages
to Cubans and to bypass Cuba’s jamming of U.S. television and radio broadcasts to Cuba.
Several incidents in 2000–1 involving Cuban spies also underscored the continuing
Cuban-U.S. cold war. In addition, in early 2002 the Bush administration began to make a
concerted effort to isolate Cuba from traditionally sympathetic Latin American countries
such as Mexico, but Cuba has continued to have diplomatic and trade relations with Latin
America. Although the successful visit to Havana in May 2002 by former U.S. president
Jimmy Carter brought renewed efforts in Congress to lift the embargo, President Bush
reaffirmed his support for it and sought to more strictly enforce the U.S. ban on travel by
Americans to Cuba. In January 2004, he cancelled immigration talks with Havana that
had been held biannually for a decade. In May 2004, he endorsed new proposals to
reduce the amount of remittances émigrés can send back to Cuba and further restrict the
number of visits Cubans living in the United States can make to their homeland. Cuba
responded by cultivating closer relations with China and North Korea.
Internal Political Developments: A crack opened in the Cuban system in May 2002, when
a petition with 11,000 signatures—part of an unusual dissident initiative known as the
Varela Project—was submitted to the National Assembly of Popular Power (hereafter,
National Assembly). Started by Oswaldo José Payá Sadinas, now Cuba’s most prominent
dissident leader, the Varela Project called for a referendum on basic civil and political
liberties and a new electoral law. In the following month, however, the government
responded by initiating a drive to mobilize popular support for an amendment to the
constitution, subsequently adopted unanimously by the National Assembly, declaring the
socialist system to be “untouchable,” permanent, and “irrevocable.”
In recent years, Cuban politics have been dominated by a government campaign
targeting negative characteristics of the socialist system, such as “indiscipline” (for
example, theft of public and private property, absenteeism, and delinquency), corruption,
and negligence. Under the campaign, unspecified indiscipline-related charges were
brought against a member of the Cuban Communist Party and its Political Bureau,
resulting in his dismissal from these positions in April 2006.
One of the world’s last unyielding communist bulwarks, Castro, hospitalized by an
illness, transferred power provisionally to his brother, General Raúl Castro Ruz, first vice
president of the Council of State and Council of Ministers and minister of the
Revolutionary Armed Forces on July 31, 2006. Fidel Castro’s unprecedented transfer of
power and his prolonged recovery appeared to augur the end of the Castro era.

6. Page 6 of 16
Political environment of Cuba when the confiscation took place
Cuba seized the properties of Cubans, Americans and other foreigners on the island starting in
1959, with the bulk of the expropriations taking place in the second half of 1960.
The Rise of Fidel Castro: Batista’s coup d’état on March 10, 1952, had a profound effect on
Cuban society, leading to doubts about the ability of the Cubans to govern themselves. It also
began a brutal right-wing dictatorship that resulted in the polarization of society, civil war, the
overthrow of Batista, and the destruction of the military and most other Cuban institutions. Fidel
Castro Ruz, a charismatic, anti-U.S. revolutionary, seized power on January 1, 1959, following
his successful revolt against the U.S.-backed Batista government. As the Castro regime
expropriated U.S. properties and investments and began, officially, on April 16, 1961, to convert
Cuba into a one-party communist system, relations between the United States and Cuba
deteriorated rapidly. The United States imposed an embargo on Cuba on October 19,1960, and
broke diplomatic relations on January 3, 1961, in response to Castro’s expropriations without
compensation and other provocations, such as arrests of U.S. citizens. The failure of the Central
Intelligence Agency (CIA)–sponsored invasion by Cuban exiles in April 1961 (the infamous Bay
of Pigs invasion) allowed the Castro regime to destroy the entire Cuban underground and to
emerge strengthened and consolidated, basking in the huge propaganda value of having defeated
the “Yankees.
The process started in 1959 with the Cuban government’s takeover of agricultural and cattle
ranches under Cuba’s Agrarian Reform Law and reached a critical stage in July of 1960 with
the promulgation of Cuban Law 851,which authorized the expropriation of the property of
U.S. nationals. Cuban Revolutionary Government, which had come to power in 1959,
approved Law 890 nationalizing all major industries and putting to an end to private property
in Cuba. Besides foreign-owned property and entities, nearly 400 Cuban-owned companies,
including banks and manufacturing facilities, were also illegally seized.
The remaining expropriations were carried out through several resolutions enacted by the Cuban
government in the second half of 1960, and continued through 1963, when the last U.S.
companies still in private hands were expropriated. In a parallel process, most assets owned by
Cuban nationals, except for small parcels of land, homes, and personal items, were seized at
various times between 1959 and 1968. The laws issued by the Cuban government to expropriate
the holdings of U.S. nationals contained undertakings by the State to provide compensation to
the owners. Nevertheless, in almost no case was actual compensation paid.
As the Cuban government initiated the State control over the Cuban lands with the First Agrarian
Reform of 1959 and culminated the process with the Second Agrarian Reform of 1963. The First
Agrarian Reform authorized the National Institute of Agrarian Reform (INRA) to expropriate
private companies based on social needs as well as the intervention of private lands. The First
Agrarian Reform recognized the constitutional right of the owners to receive indemnification.
According to the Reform, the amount of the compensation due to expropriated owners would be

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determined based on market value using the declared property taxable value prior to October 10,
1958. Expropriations of land improvements, buildings and crops would be also compensated
using declared taxable values. The Reform established that the indemnification for property
expropriations will be paid in negotiable bonds. To that end, a series of bonds of the Republic of
Cuba will be issued in the amounts, terms and conditions that will be set at the appropriate time.
The bonds shall be denominated “Agrarian Reform Bonds” and will be regarded as government
obligations.
When the government started to confiscate thousands of American-owned farms and businesses
including a Colgate-Palmolive soap factory and the telephone company, which was owned by an
American corporation. The relations with the U.S. cooled; Cuba drew closer to the Soviet Union.
The early 1960s were the height of the Cold War, and the Soviets saw Cuba as a key strategic
asset in America's backyard.
The Soviets supported Cuba with money and weapons, and tensions with the U.S. escalated.
Eisenhower imposed a partial economic embargo in 1960. His successor in the White House,
John F. Kennedy, approved a plan for Cuban exiles, backed by American firepower and the
C.I.A., to invade Cuba. On April 17, 1961, 1,500 men landed in a swampy area on the southern
coast of Cuba known as the Bay of Pigs.
But at the last minute Kennedy withheld the air and naval support he had promised, and Castro
easily killed or captured nearly all of the invaders. It was an embarrassing defeat for the United
States and a huge propaganda victory for Castro.
The United States severed diplomatic relations with Cuba on 3 January 1961, and imposed trade
embargo Februarye 1962.The organization of united states is under pressure from the United
States, suspended Cuba's membership in the body on 22 January 1962, and the us government
banned all US-Cuban trade on 7 February. The Kennedy administration extended this ban on 8
February 1963, forbidding US citizens to travel to Cuba or conduct financial or commercial
transactions with the country.[
Reasons
Cuba's nationalization process occurred between 1959 and 1968 and included different legal
procedures such as: confiscation; forced expropriation by a judicial or administrative authority
with compensation; and intervention by state agencies prior to confiscation, nationalization or
liquidation of the private property. “The confiscation responded to three main grounds: whether
the individual was involved with the tyranny; whether the individual committed a
counterrevolutionary crime or whether the individual left the country permanently.
When The United States imposed an embargo on Cuba on October 19, 1960, and broke
diplomatic relations on January 3, 1961, in response to Castro’s expropriations without
compensation and other provocations, such as arrests of U.S. citizens. The failure of the Central
Intelligence Agency (CIA)–sponsored invasion by Cuban exiles in April 1961 (the infamous Bay
of Pigs invasion) allowed the Castro regime to destroy the entire Cuban underground and to

8. Page 8 of 16
emerge strengthened and consolidated, basking in the huge propaganda value of having defeated
the “Yankees.
Relations between the United States and Cuba deteriorated rapidly as the Cuban government, in
reaction to the refusal of, standard oil and to refine petroleum from the Soviet Union in Cuban
refineries under their control, took control of those refineries in July 1960. The Eisenhower
administration promoted a boycott of Cuba oil companies, to which Cuba responded by
nationalizing the refineries in August 1960. Both sides continued to escalate the dispute. Cuba
expropriated more US-owned properties.
In the Castro government's first agrain reform law, on 17 May 1959, it sought to limit the size of
land holdings, and to distribute that land to small farmers in "Vital Minimum" tracts.
Also the Soviets supported Cuba with money and weapons, and tensions with the U.S. escalated
these all lead Cuba toward the confiscation.
The term confiscation is regularly used in U.S. laws and regulations regarding the Cuban
nationalization process. Cuba has insisted that the U.S. properties in Cuba were expropriated, not
confiscation as the Cuban people say.
The Cuban government wanted to do the Confiscation .And by seizure of private property by the
state without compensation, usually to punish the person whose property is seized for who he is
or for what he has done. Confiscation are ordered for political, religious, legal, or other reasons
relating to a person subjected to the taking, and not to the property itself. For Cuba they wanted
to punish USA.
Relationship between Political Environment & Business
The political environment can affect a business either positively, or negatively, depending on the
prevailing situation in a country. It mainly forms the external factors - which are part of the
macro-environment, control of which is beyond the ability of human beings.
These factors touch on the way politics are conducted in a country, which directly reflects on
what is happening within the government itself.
This means that a democratic country will accord freedom to its people to vote for a government
which has their interests at heart, and thus business will thrive - owing to the good policies the
government implements.
On the other hand, a dictatorial government will not earn the respect of its citizens - leading to
economic as well as political instability and uncertainty.
Even though such a government will eventually go, businesses suffer a lot during the
government's tenure, since they are not sure of their future. This underlines the importance of a
democratic government to a country and to business.

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Needless to say, once a country is stable, more investment opportunities will be realized, thus
attracting more and more investors. This will reflect positively and directly on local businesses,
as citizens will be able to have full confidence in them.
Business success depends on politics to a high degree, and in many ways. Politicians are usually
the people controlling the operations of a government, and will decide which countries to trade
with, as well as on setting the trading conditions.
This means that, if a certain business or its owners are not on good terms with the politicians,
then they will suffer.
Furthermore, the rules that govern and regulate the manner in which trade is conducted are
enacted by the politicians - thus good relations are needed between stakeholders in the business
sector and politicians, to facilitate success.
 How Does Political Environment Affect Home Business
Business deals totally depend on the political environment.
1) The politicians are the only people who decide with which other countries trade takes
place, and under what conditions.
2) The rules and regulations for trade are passed by politicians.
3) If political relations are not good with a neighboring country, or with any country
with whom you want to trade, you will not be allowed to do so - due to the rules &
regulations which have been made by the politicians.
The political environment is one of the most important factors affecting the operations of a
business. Political forces are said to be part of the macro-environment. All the factors of the
macro-environment are external to an organization, and completely beyond its control.
Political factors are concerned with the overall situation of politics in a country, which can, in
turn, be associated with the situation of government.
If a country is democratic by nature, people will have full voting authority and will be able to
choose a government that will work for the betterment of the people and the country. In such a
situation, businesses will thrive, because of the good policies of the government.
On the other hand, if there is no democracy, there is no respect for the chosen government, and
there will therefore be instability and uncertainty in the country.
Governments will come and go, and so will their respective decisions and policies. Businesses
will suffer in such a case, as they will not know what will be their future.
That is why it is said that a stable and democratic government and its political decisions are
important for a country, and for business overall. A stable political situation will also attract
more and more investors from other nations.

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 Aspects of the political environment to be considered
1) Stability of the government
2) Government type (dictatorship, democratic, monarchy, etc)
3) Economic policy of the government
4) Trade policy
5) Diplomatic events in surrounding countries
All of the above factors affect the business environment and whether or not business will thrive.
Recent events in Pakistan, and the current situation in Iraq, are examples of what happens to
business when the political environment is unstable.
 Political environment & Business environment in Cuba
According to the Economist Intelligence Unit, the role of the market in Cuba is going to be
expanding in the years to come. The country's is an excellent business opportunity for anyone
who is willing to accept the challenge and to give it a try.
Doing business in Cuba comes with its specifics that are determined by the country's financial
system and local peculiarities. A number of companies from Europe, China and Canada in
particular are already having successful businesses operating in Cuba.
Cuban business is benefiting from the numerous infrastructure and social improvements that
are currently taking place. The state has invested in the improvement of the railroad system, the
construction of desalination plants and the tourism sector is seeing growth and support. All of
these characteristics determine the local business environment as a good opportunity that is
going to continue expanding through economic reforms that have recently started.
Naturally, tourism can probably be ranked as the most beneficial and profitable business in
Cuba. Official statistics for 2012 show that tourism has registered a 12 percent income increase
in the first quarter of the year. The country has also seen an increase in the number of visitors
that totals four percent.
Cuba has more than 300 hotels that offer employment to many and that are determining for the
Cuban business environment.
In 2011 and 2012, the Cuban government did undertake a series of economic reforms that
affected the local business environment in a positive way. The restructuring of the state
administration was the first one. In addition, the government accepted a number of reforms
stimulating the appearance of small businesses.

11. Page 11 of 16
Some economy experts from across the globe state that Cuba has the potential to turn into the
"next China" in terms of economic and production capacity. The changes that have taken place
recently validate the claim and demonstrate that the country has a lot of potential that is yet to
be fully harnessed.
Foreign companies are successfully functioning in Cuba and according to many business
representatives, the time is right for others to enter the local business stage.
The French CoFace credit risk and investment company assessed the business climate and
environment in Cuba, coming up with a rather comprehensive and intriguing report. According
to CoFace, Cuba's biggest strengths include very skilled workers, the attractiveness of local
tourism landmarks, the availability of natural resources like nickel and oil, the good social
indicators, the agreement with Venezuela that ensures preferential oil import and the
agricultural production of sugar and tobacco among many others.
These trends and positive developments in 2011 are expected to continue throughout 2012. The
Cuban business environment is expected to become even more attractive, both for local
companies and for foreign entrepreneurs that are wishing to start operating in the country. Cuba
has tremendous potential and the state is showing its willingness to work on even better
business environment and opportunities.
For business aficionados, a big event coming up is the International Fair of Havana.
The International Fair of Havana celebrates in 2011 its 29th edition among great expectations
created by the start of a transformation and upgrading process in foreign trade and foreign
investment areas, in accordance with a group of new economic guidelines promoted by Cuban
authorities.
With an exchange nearing 10 billion dollars a year, Cuba's foreign trade has a relevant position
in the said guidelines, which were conceived to strengthen the country's response capability in
the present international situation, and after performing a meticulous diagnosis identifying
necessary changes in all spheres of economic, social and cultural development.
This ongoing process does not only have a cardinal end achieving sustainability in the food,
economic and environmental areas, but also for sufficient institutional flexibility, international
competitiveness and a new structure of relations between state and society.
Of the 313 approved guidelines, no fewer than 45 deal with the foreign sector, with
recommendations of measures to encourage exports and substitute imports. The latter is to
avoid expending more than one billion dollars to purchase products that can be developed in
the archipelago.

12. Page 12 of 16
According to the Economist Intelligence Unit, the role of the market in Cuba is going to be
expanding in the years to come. The country's is an excellent business opportunity for anyone
who is willing to accept the challenge and to give it a try.
Doing business in Cuba comes with its specifics that are determined by the country's financial
system and local peculiarities. A number of companies from Europe, China and Canada in
particular are already having successful businesses operating in Cuba.
Cuban business is benefiting from the numerous infrastructure and social improvements that are
currently taking place. The state has invested in the improvement of the railroad system, the
construction of desalination plants and the tourism sector is seeing growth and support. All of
these characteristics determine the local business environment as a good opportunity that is
going to continue expanding through economic reforms that have recently started.
Naturally, tourism can probably be ranked as the most beneficial and profitable business in Cuba.
Official statistics for 2012 show that tourism has registered a 12 percent income increase in the
first quarter of the year. The country has also seen an increase in the number of visitors that
totals four percent.
Cuba has more than 300 hotels that offer employment to many and that are determining for the
Cuban business environment.
In 2011 and 2012, the Cuban government did undertake a series of economic reforms that
affected the local business environment in a positive way. The restructuring of the state
administration was the first one. In addition, the government accepted a number of reforms
stimulating the appearance of small businesses.
Some economy experts from across the globe state that Cuba has the potential to turn into the
"next China" in terms of economic and production capacity. The changes that have taken place
recently validate the claim and demonstrate that the country has a lot of potential that is yet to be
fully harnessed.
Foreign companies are successfully functioning in Cuba and according to many business
representatives, the time is right for others to enter the local business stage.
The French CoFace credit risk and investment company assessed the business climate and
environment in Cuba, coming up with a rather comprehensive and intriguing report. According
to CoFace, Cuba's biggest strengths include very skilled workers, the attractiveness of local
tourism landmarks, the availability of natural resources like nickel and oil, the good social
indicators, the agreement with Venezuela that ensures preferential oil import and the agricultural
production of sugar and tobacco among many others.
These trends and positive developments in 2011 are expected to continue throughout 2012. The
Cuban business environment is expected to become even more attractive, both for local
companies and for foreign entrepreneurs that are wishing to start operating in the country. Cuba

13. Page 13 of 16
has tremendous potential and the state is showing its willingness to work on even better business
environment and opportunities.
For business aficionados, a big event coming up is the International Fair of Havana.
The International Fair of Havana celebrates in 2011 its 29th edition among great expectations
created by the start of a transformation and upgrading process in foreign trade and foreign
investment areas, in accordance with a group of new economic guidelines promoted by Cuban
authorities.
With an exchange nearing 10 billion dollars a year, Cuba's foreign trade has a relevant position
in the said guidelines, which were conceived to strengthen the country's response capability in
the present international situation, and after performing a meticulous diagnosis identifying
necessary changes in all spheres of economic, social and cultural development.
This ongoing process does not only have a cardinal end achieving sustainability in the food,
economic and environmental areas, but also for sufficient institutional flexibility, international
competitiveness and a new structure of relations between state and society.
Of the 313 approved guidelines, no fewer than 45 deal with the foreign sector, with
recommendations of measures to encourage exports and substitute imports. The latter is to avoid
expending more than one billion dollars to purchase products that can be developed in the
archipelago.
Cuba: Present Situation
Before the revolution in 1959 Cuba was a dictatorship in every sense of the word. The entire
nation was suppressed under the tight grip of the dictator Fulgencio Batista. There were no free
elections, opposition to Batista's power was forbidden, and the Cuban people were deprived of
the basic human right to be allowed to act as a sovereign nation with the power to move forward,
and form its own future.
Since the revolution in 1959, Cuba has travelled a long way, from the oppressed, suffering nation
that it was, and has since established its own unique form of democracy. However there is still
limited access to information about Cuba, and what little information there is, is prone to be
misleading, due to The United State of America's domination over the majority of the world's
media power. As a result, many people still posses unclear and misinformed views on the Cuban
political system, forcing them to be critical of the so called 'dictatorship' which they believe is
still enforced, making them sometimes even reluctant to either support, or travel to Cuba.
Cuba is constitutionally defined as a "socialist state guided by the principles of José Martí, and
the political ideas of Marx, the father of communist states, Engels and Lenin." The present
Constitution also ascribes the role of the Communist Party of Cuba to be the "leading force of
society and of the state".

14. Page 14 of 16
Executive power is exercised by the government. Until February 2008, Cuba was led by
President Fidel Castro, who was Chief of State, Head of Government, Prime Minister, First
Secretary of the Communist Party of Cuba (PCC), and Commander in Chief of the armed forces.
The Ministry of Interior is the principal organ of state security and control.
According to the Cuban Constitution Article 94, the First Vice President of the Council of State
assumes presidential duties upon the illness or death of the President. On July 31, 2006, during
the 2006 Cuban transfer of duties, Fidel Castro delegated his duties as President of the Council
of state, first secretary of the Cuban Communist Party and the post of commander in chief of the
armed forces to first Vice President Raúl Castro.
Cuba is a one-party state. There is a high level of social control and a strong police
presence. There are widespread restrictions on freedom of speech, association and assembly for
Cuban nationals. Political demonstrations or gatherings not sanctioned by the government may
be broken up. For safety, one should avoid demonstrations or large public gatherings. The
political situation remains calm at present.
A distance of 90 miles (144 kilometers) separates the Republic of Cuba from the United States of
America. That distance is close enough for cultural if not political influences between the two
countries.
Economical
Cuba has a state-controlled economy, which means that all Cuba's production is controlled and
managed by the government and most of the labor force is employed by the state. The state
controls Cuba's economy to a greater degree than in the economies of not only communist China
and Vietnam today, but also Poland, Hungary, and Czechoslovakia in the 1980s. Foreign
investors must contract with the state, and are required to enter into joint ventures with the
government, including in the highly lucrative tourist industry. The state operates dollar-only
shops to capture the hard-currency spent by foreigners and Cubans spending their remittances. A
military enterprise called Gaviota runs a far-flung complex of tourist resorts and services. The
sugar industry is under the command of the military and a high-ranking Army General. And
rather than dismantle or privatize them, the state continues to operate inefficient state-enterprises
in order not to worsen unemployment or underemployment.
The United States's economic embargo on Cuba, in place for more than half a century, continues
to impose indiscriminate hardship on Cubans, and has failed to improve human rights in the
country. At the United Nations General Assembly in October, 186 of the 192 member countries
voted for a resolution condemning the US embargo; only the US and Israel voted against it.
In January 2011 US President Barack Obama used his executive powers to ease “people-to-
people” travel restrictions, allowing religious, educational, and cultural groups from the US to
travel to Cuba, and permitting Americans to send remittances to assist Cuban citizens. In 2009
Obama eliminated limits on travel and remittances by Cuban Americans to Cuba, which had
been instituted during George W. Bush’s administration.

15. Page 15 of 16
Cuba is increasingly being used as a transit country for drugs destined for Europe. Cuban courts
are handing out severe penalties (in excess of twenty years) for drugs-related offences.
Committees for the Defence of the Revolution
Committees for the Defence of the Revolution or CDR, is a network of neighbourhood
committees across Cuba. The organizations, described as the "eyes and ears of the Revolution",
exist to promote social welfare and report on "counter-revolutionary" activity. As of 2010, 8.4
million Cubans of the national population of 11.2 million were registered as CDR members.
The CDR system was formed by Fidel Castro on September 28, 1960, following the 1959 Cuban
Revolution, which overthrew the U.S.-backed dictator Fulgencio Batista. The slogan of the CDR
is, "¡En cada barrio, Revolución!" ("In every neighborhood, Revolution!"). Fidel Castro
proclaimed it "a collective system of revolutionary vigilance." So that everybody knows who
lives on every block, what they do on every block, what relations they have had with the tyranny,
in what activities are they involved and with whom do they meet.
Recent news always reflects the current issues and situations. Some important news of Cuba 0f
the year 2012 and 2013 are discussed to put some light on current issues-
 It has taken half a century but Cuba has finally bowed to the inevitable and
announced the lifting of foreign travel restrictions on its citizens. From January, 2013
they will no longer require exit permits to go overseas. The move – announced on the
50th anniversary of the Cuban missile crisis – is the most significant act of
liberalization yet from Raúl Castro, who succeeded his brother Fidel as Cuba’s
president four years ago. This latest move will be watched with keen interest by the
United States, which will be the destination for most Cubans who decide to use their
new-found freedom of movement. Since 1966 Washington has granted Cubans
automatic residence if they can reach the United States – as many thousands have,
usually in makeshift vessels. Raúl Castro has dropped his brother’s anti-American
posturing, recently declaring that good relations between the two countries would be
“mutually advantageous”. (The Telegraph, 16 Oct, 2012)
 Raul Castro is decentralizing the state-dominated economy, allowing more space for
private initiative in agriculture and retail services and has lifted many restrictions on
personal freedoms, such as travel and buying and selling homes and cars. He has also
introduced term limits (two five-year stints) for top government posts, but has drawn
the line at legalizing other political parties and contested elections. "Renouncing the
principle of a single party would be equal to legalizing one or more imperialist
parties," Castro said at a Party conference last year. (The Telegraph, 4 Feb, 2013)

16. Page 16 of 16
Conclusion
The critical concern Political environment has a very important impact on every business
operation no matter what its size, its area of operation. Whether the company is domestic,
national, international, large or small political factors of the country it is located in will have an
impact on it. And the most crucial and unavoidable realities of international business are that
both host and home governments are integral partners. Reflected in its policies and attitudes
toward business area governments idea of how best to promote the national interest, considering
its own resources and political philosophy. A government control's and restricts a company's
activities by encouraging and offering support or by discouraging and banning or restricting its
activities depending on the government.
Reference
 http://www.telegraph.co.uk/comment/telegraph-view/9349282/Cuba-unlocks-the-
door.html
 http://en.wikipedia.org/wiki/Politics_of_Cuba#State_leaders
 https://www.cia.gov/library/publications/the-world-factbook/geos/cu.html
 History Text Source: Library of Congress