Cuba’s Catastrophic America Problem
foreign Columbus first set foot on Cuba's Shore he described it as the most beautiful that eyes had ever seen indeed it would be this Tropical Paradise status that would eventually make Cuba an economic Powerhouse by the 1920s its Monumental sugar industry was raking in billions of dollars its world-class beaches and its proximity next to the world's superpower which was starved for alcohol during prohibition would become what Americans described as 700 miles of playground as tourist dollars started pouring in the capital Havana would be teaming with new Ford automobiles opulent hotels yacht clubs and state-of-the-art infrastructure indeed Cuba was on its way to becoming a rich country by the late 1950s despite only having 6.5 million people it had the world's 29th largest economy it had a higher GDP per capita than Ireland and Australia and even double that of Spain and Japan not only that but it had more doctors per person than the United Kingdom and a life expectancy in infant mortality on par with developed European nations wages were the eighth highest in the world and it was currently undertaking educational initiatives to make it the most literate Latin American Nation Cuba's economy seemed to have everything going for it a free market arguably more free than Americas and educated and healthy Workforce some of the best natural landscapes on Earth next door to the largest population of wealthy tourists amazingly fertile agricultural land and Rich reserves of minerals and petroleum Cuba seemed poised for economic prosperity yet today Cubans have been subjected to extreme economic hardship and especially so over the last three decades in the 1990s the average Cuban lost 20 pounds due to food shortages leaving some 40 000 people blind from nutritional deficiencies electrical blackouts were so common it was noteworthy when residents had power indeed Cuba had lost a third of its entire economy 70 of its buying power and almost half of the nation became unemployed hundreds of thousands risked their lives to cross the ocean on makeshift rafts upwards of 50 percent never made it today things are not much different once again Cuba is undergoing major food shortages and economic decline but why why is Cuba still so poor from the gateway to the new world to starvation from a Tropical Paradise to the brink of nuclear Armageddon from a capitalist dream to a brutal Communist dictatorship this is the unfortunate story of Cuba's economy foreign [Music] this video is sponsored by Enlisted the most comprehensive and immersive World War II multiplayer shooter engross yourself in the largest conflict the world has ever seen fighting your way through the most important events like the battle for Moscow in the invasion of Normandy indeed enlisted Prides itself on historical authenticity which for history lovers like myself is something that keeps me coming back for more and with its huge catalog of vehicles and weapons you'll never find yourself without a fun new way to lead your team to Victory so join me in the action today on PC PlayStation 4 and PlayStation 5 or Xbox One and Xbox series X and S and did I mention the game is completely free to play simply click the link in my description to get started which will include an exclusive bonus such as silver order for troops and weapons and three days of Premium time for your account at the turn of the 20th century Cuba was very much a nation in flux after 400 years of Spanish domination three Wars and 30 years of conflict Cuba was finally independent yet very few Cubans actually see this as the start to their independence despite the rebel forces all but securing victory at the last second the United States likely conducted a false flag operation to justify entering a war with Spain in order to snatch up its remaining Colonial possessions while the explicit aim of the war was to fight for Cuban sovereignty Cuba would enter a new era of corporate colonialism dominated by the interests of the United States those interests laid in Cuba sugar fields that were already the most productive and profitable in the world yet even before the wars of Independence the U.S already owned a huge portion of Cuba sugar industry that was now endangered by the prospect of an independent Cuba therefore by making Cuba a puppet state subservient to the U.S us the U.S could
make sure their business ventures were safe while also allowing for new uninhibited growth yet it wouldn't be until the end of the first world war that Cuba's economic fate would be forever changed as Europe's sugar beet Fields were ruined by trench warfare 20 of the global Supply vanished as price controls were lifted at the end of the war the price of sugar would undertake its most dramatic rise ever at 7.3 cents per pound the price was already much higher than anyone could have expected yet by the end of the Harvest it had ballooned to 22.5 cents the 1919 Harvest would flood the Cuban economy with a billion dollars that amount was more than the profits generated from the last 14 years combined small-scale sugar farmers were now wearing the finest clothing and going on shopping sprees in Havana thinking these prices would be the new normal Cubans and Americans alike scrambled to take out loans to greatly expand their production capabilities yet as quickly as the price Rose the bubble had popped by the end of the year many farmers found themselves with unpayable debts and as a result 20 Cuban banks failed the American Banks not only survived but took this opportunity to buy a bankrupted sugar Mills and even more Farmland in the aftermath Cubans would only own about 20 percent of their nation's sugar production a fact that would give rise to Growing nationalist resentments toward the United States [Music] despite the great boom and bust of Cuban sugar the economy would get yet another substantial boost during the first world war America had emerged as the world's economic superpower it now yielded a huge middle class with more disposable income than ever before and a demand to spend it on trips abroad but as Europe was recovering from years of massive conflict and with the United States outlawing the consumption of alcohol Cuba became the new Prime vacation spot from 1914 to 1937 the number of American tourists arriving in Cuba had increased by almost six-fold massive investment into lavish hotels huge horse racing tracks casinos restaurants Resorts and state-of-the-art infrastructure transformed the capital Havana into a modern bustling and Rich beyond belief City year after year American tourists increasingly showered the small island nations economy in dollars but the Cuban economy was hiding at dark side as casinos started appearing almost out of thin air so too did the slums surrounding the dockyards that brought in luxury Furniture Cuba was becoming rich but only for a tiny slice of society independent sugar farmers struggled to make ends meet as American Banks bought them up in foreclosures and many women turned to prostitution to keep their children fed meanwhile Cuba's government had become corrupt and despotic buying votes in viciously cracking down on opposition operating more like the mob that held meetings in their casinos than a government that represented the interests of its people and as the world entered the Great Depression the Cuban economy which relied on sugar in tourists would feel the terrible effects more than most [Music] by 1958 Cuba had been led by a bloody military dictatorship under fulgencio Batista for the past six years by now Cuba was neither poor nor Rich educational campaigns made it the most literate nation in Latin America and they enjoyed early social and workplace freedoms yet the economy had been more or less stagnant since the Great Depression while inequality continued to worsen the people wanted a change they wanted to be free of corporate colonialism free of military dictatorship and in its place they wanted a government that would uphold the interests of all Cubans they did not however want a Communist Revolution but as Fidel Castro landed in Cuba and launched his guerrilla warfare campaign against the government the people rose up in his support he hid his true ideological aspirations he did not have the support of the Cuban Communist party until the very end and the Coalition that helped them come to power was overwhelmingly Social Democratic and anti-communist not just were the Cuban people blind to his communist leanings but even the cia's foremost expert on Latin America stated Castro is not only not a communist he is a strong anti-communist fighter yet once in power his aims became more apparent in just nine months Castro enacted sweeping reforms in 1500 new laws decrees and edicts wages were raised rents were lowered electrical and telephone rates were cut and he enacted the long sought after agrarian reforms the maximum size of plots of land were reduced and the workers of the land were granted small plots land larger than the threshold was seized by the government and turned into state-run Farms this meant that the United States's huge Investments were now controlled and owned by the Cuban government but what truly enraged the U.S was the signing of a joint trade partnership with their ideological Nemesis the Communist Soviet Union the Soviets agreed to acquire 20 percent of of Cuba sugar for the next five years paying in cash Machinery the help of Soviet technicians and crucially six million barrels of oil but that oil needed to be processed at one of the three American-owned refineries on the island Esso shell and Texaco under pressure from Washington refused to refine the Soviet oil Castro immediately seized and nationalized the refineries prompting the U.S to hit back hard they cut the sugar quota which was an agreement to buy a percentage of Cuba sugar at a previously agreed upon rate that Sugar quota had been the Cornerstone of the Cuban economy for the entirety of the 20th century Castro Furious seized all U.S owned assets on
the island from petroleum operations telephone and electric companies Banks railroads hotels casinos distilleries and all remaining sugar Ventures for the first time diplomatic relations between the two Nations had been cut off and the United States would carry out counter-cast operations for decades including the Bay of Pigs invasion supporting Insurgency groups and 636 failed assassination attempts but the action that hurt Cuba the most was John F Kennedy's complete embargo on Cuban Goods this almost entirely shut off Cuba from trade with the Western World which still stands to this very day this embargo then necessitated and forced Cuba into the hands of the Soviet Union who would later secretly deploy weapons of mass destruction in Cuba prompting the missile crisis in which the world would come the closest it has ever been to nuclear Armageddon this would also be around the same time that Castro announced to the world for the very first time that the Cuban Revolution was indeed a socialist one revolution [Music] is in the wake of the announcement successive rounds of nationalizations eroded the foundations of the market economy eventually bringing all private operations under the direct control of the state everything from Street vendors retail stores bars grocery stores Banks and sugar Mills would be owned and operated solely by the government from now on the state would set prices for every good demand Farmers sell products at a specific price and tell Industries exactly what and how much to produce wage differences between occupations would be greatly reduced while the system tried to use moral incentives like duty to country rather than material incentives as the basis of Labor motivation but Cuba during this early socialist period would only make half-hearted attempts at typical detailed Central planning like that observed in the Soviet Union this meant that bottlenecks started appearing across the entire economy inputs became unavailable for Enterprises to reach assigned output quotas newly constructed factories would be closed due to missing components and maintenance was commonly neglected in the goal of rapid industrialization the accumulation of productive assets was given priority over consumer products yet the spending and investment was haphazard and inefficient everyone was guaranteed a job but this often meant over employment 20 percent of employees not showing up for work and foot dragging when they did a study in 1968 into the matter found that as much as 50 percent of the working days productivity was lost to such actions this was exacerbated by the professional and managerial classes fleeing the country in the wake of the Revolution those who took their place as heads of Industry were chosen based on their loyalty to the revolution rather than their Merit and expertise on account of all of this the economy contracted even Cuba's main profit-making sector agriculture saw its total output reduced by 23 percent in just five years after the revolution yet the economy managed to stay afloat due to generous loans in trade deals with the Soviet Union while there were some successes early on like a major initiative to make the population more educated and literate with good access to social safety nets and Health Care the early socialist Cuban economy proved to be a failure not to mention Castro's brutal and repressive actions against his people by 1971 the economy was smaller than it had been before the Revolution a period in which the developing nations of the world had grown exponentially this proved to be a direct reason Cuba joined the soviet-led economic Alliance known as Comic-Con yet that decision would cement Cuba as a nation wholly dependent upon a single crop in the Soviet Union [Music] in 1972 Cuba began its transition to a true planned economic structure with the help of Soviet and Czech experts which decreased bottlenecks and improved the allocation of Investments on top of this Enterprises run by state loyalists were replaced with trained experts in the introduction of material incentives like wage scales and bonuses increased workers productivity the sugar industry was mechanized and the Soviets started supplying even more generous trade deals for oil machinery and consumer goods further yet the labor force climbed considerably due to an early 1960s Baby Boom generation coming to working age and a dramatic push for female labor force participation these Collective efforts and external events resulted in an impressive economic growth spurt Cuba had entered its communist Golden Age shortages were lessened and there were more opportunities access to health care and education continued to be high of good quality and free due to a persistent emphasis and resource allocation toward them yet the foundations of the system started to show Cracks by the 1980s its over Reliance on trading sugar for cheap Imports was significantly weakened by slumping Global prices and Industrial growth peaked as the Cuban government ran out of new people and resources to throw at industrial expansion while the economy did indeed grow it had become solely Reliant upon sugar exports and subsidies and aid from the Soviet Union this would have catastrophic consequences at the dawn of the 1990s [Music] on Christmas Day 1991 something happened which was Unthinkable just a decade prior as a result of economic stagnation liberalization and limited freedom of speech the Soviet Union ceased to exist the Communist world would all but disappear and it almost took Castro's regime with it to understand that economic catastrophe Cuba was about to endure we need to look at how Reliant upon the Soviet Union it was in 1987 the Soviet Union provided Cuba with 70 percent of its trucks 91 percent of its fertilizer 70 of its iron 74 of its grain and 100 of its oil almost all of this trade was through the sale of sugar at rates much higher than Global prices with the Soviet Union gone in just four years Cuba lost 35 percent of its entire economy and 80 of its International Trade major food shortages became the new Norm while outright starvation was averted the average Cuban lost 20 pounds and nutritional deficiencies cost up to 40 000 people to go blind people may do without toothpaste abandon their dogs on the street and took to the black market to try and obtain food at exorbitant prices without oil the cities became dark as blackouts became the norm and industries stopped being able to produce much of anything many speculators thought Castro's days were numbered indeed the desperation is clear when Castro stated we are alone all alone here in this ocean of capitalism that surrounds Us in order for his regime and socialism to survive Castro had to figure out a way to operate in a world devoid of strong socialist trading partners in what he likened to a deal with the devil Cuba transformed into a dual economy in which it would operate as a state-run centrally planned economy but with a free market economy on the side to keep it all funded half of Allstate Enterprises were shut down to limit costs making a huge percentage of the work Force unemployed they're soaking them up would be a limited private sector in which individuals could apply for limited self-employment along with this certain and select state Enterprises were allowed to engage in profit-seeking Ventures with foreign currencies but there were two major reforms that had the most substantial impact on the economy the first was the dollarization of the economy in which the US dollar was not only legalized but often required for transactions the second was the legalization and active enticement of foreign investment specifically in regards to expanding tourism almost immediately new hotels sprung up old ones were restored and restaurants and nightclubs dotted Havana this proved to be wildly successful from just 340 000 tourists in 1990 the number exploded to almost 2 million by the year 2000. tourism became the lifeline for the Cuban economy generating two billion dollars a year the Cuban economy started to rebound and grow yet it would cause some very strange side effects Maids Hotel receptionists taxi drivers and restaurant workers receiving tips and dollars were being paid much more than doctors and teachers who were still being paid in pesos under the command economy dentists had to do jobs on the side to afford to eat while taxi drivers shopped in dollar Only Stores which never had shortages of food at the same time all Cubans became second-class citizens in their own country they endured blackouts while peering into lavish hotels with well-lit lobbies they struggled to find food while tourists ate at fancy restaurants they waited for hours for delayed buses while the restored 1950s taxis quickly shuttled foreigners between beaches the reforms that enabled Castro's regime to survive created a new class of haves and have-nots but while the economy substantially grew in specific Industries the reforms that made it possible stopped coming and were often subject to reversals indeed less economic freedoms were enjoyed with each passing year until Fidel Castro became ill in 2006 in which he finally let go of his iron grip on power that he held for almost 50 years in his place would be his brother Raul Castro who many hoped would legitimately transform Cuba's economy despite the apparent willingness to open and normalize relations with the U.S when Barack Obama was elected in 2008 these efforts never amounted to much and were largely reversed when Trump was elected in 2016. don't forget to play enlisted today for free just click the link in my description to get started and receive an exclusive bonus for the most immersive World War II multiplayer shooter game I've ever played thank you enlisted for sponsoring this video the Cuban economic situation by the late 2000s started to worsen significantly sugar prices remain subdued Russia closed down a major military installation the island was hit by a series of very destructive hurricanes and the growth of Tourism leveled off this situation became dire enough so that the government created a new methodology for calculating national income Cuba started cooking the numbers of its economy choosing to outright lie about its economic turmoil instead of reforming further for a time this was okay as Venezuela now under the control of fellow socialist Hugo Chavez started supplying Cuba with generously priced oil much the same as the Soviet Union had once done in exchange for oil another strange facet of Cuba's economy would show itself with its excess of doctors Cuba for a long time and increasingly so was relying on generating income by shipping tens of thousands of them abroad indeed this now generates 4 46 percent of the nation's export earnings while those earnings in subsidized oil kept the economy from collapsing by 2013 Raul Castro was forced to Institute new reforms however just like the reforms in the 90s they did little to change the underlying structure of the economy being used more as a Band-Aid to problems than real change that would bolster the economy and improve the lives of Cubans and this unfortunately will continue to be the norm those in charge will never undertake the structural reform that is needed as that would mean an end to their personal power and privileges expect Cuba's economic future to be littered with ad hoc minor reforms that do little to significantly improve the economy their aim will be to change the nation just enough to avoid economic meltdown while still maintaining political power in the meantime it will be the Cuban people that face unnecessary hardship food shortages and a future that is devoid of much opportunity for their children unless they managed to escape [Music]
2022-12-07 17:07
