Cuban Economy essays

Cuban Economy essays Although the Cuban economy may be thought of as to some as a complete failure, the command system structure can still be an effective way of creating a successful economy, if the correct steps are taken in it's planning. From the 1960's revolution to the 1990's collapse of russia, the soviet union managed to maintain the Cuban economy by trading them sugar in return for oil (http://lanic.utexas.edu/la/cb/cuba/asce/cuba1/panel.html). The USSR paid "higher than market prices" for Cuban cane, and Cuba paid "lower than market prices" for Russian petroleum products. This arrangement which Cuba benefited from, allowed Castro to provide benefits to the citizens such as higher education, free total medical care, and subsidized food and housing. Now, ever since the deal with the Soviet Union has collapsed, the Cuban economy has fallen by 35% from 1989 to 1993 (www.odci.gov/cia/publications/factbook/index.html). Instead of the island being maintained or enhansed, it is barely be sustained. Although the lack of aid from the Soviet Union has had a great influence in the Cuban economy, it still has some hope because of increased tourism, agricultural trade and additional US dollars. The Cuban economy is strongly based on a command system, where the government has nearly complete control of the economy. Just as any other economic system is required to do, the command system must answer the 3 basic economic questions. what to produce, how to produce it, and who gets what (Lyons, Brian 1987). The government controls things such as the quantity of each good that is to be imported and exported, prices of goods and services, wages, housing. etc. Through the goverments control, they can decide who recieves what share of the economic pie. Unfortunatly, this means that they can use this power to there own advantage and limit the amount of income that each citizen receives. In Cuba, each working a...