Find in




Content provided in partnership with
Thomson / Gale

FIND IN Advanced
Search

Cuba's struggle for self-sufficiency - aftermath of the collapse of Cuba's special economic relations with Eastern Europe

CUBA'S STRUGGLE FOR SELF-SUFFICIENCY

The demise of the Council for Mutual Economic Assistance (COMECON), the Soviet-bloc trade organization, has presented Cuba with a challenge almost as great as the trade embargo imposed by the United States in 1960. Cuba's initial reaction to the embargo was to initiate a program of food self-sufficiency and to attempt to reduce its dependency on sugar exports. As Cuba declared its socialist path and became integrated into COMECON trade on the basis of its comparative advantage in sugar production, the goal of food self-sufficiency was largely abandoned. The demise of COMECON and the ongoing changes in the Soviet Union, along with growing popular recognition of the costs of Cuba's historical dependency, whether upon the United States or the Soviet Union, have forced the Cuban leadership to reconsider the nation's development strategy.

In late 1989, surveying events in Eastern Europe and the probable move to hard-currency trade among COMECON members, the Cuban government announced a major program of new investments in the agricultural sector, known as the Programa Alimentario (the Food Program), designed to make the country more self-sufficient in foodstuffs. As Soviet deliveries of wheat and petroleum became increasingly unreliable, Fidel Castro noted in a major speech in March 1990 to the Congress of the Federation of Cuban Women that the country might enter "a special period in peacetime," a period characterized by austerity and sacrifice.

Advertisement

In the months that followed, it became increasingly evident that the Soviet Union was not going to be able to deliver the 13.3 million tons of petroleum promised for 1990. Since 99 percent of Cuban oil imports have come from the Soviet Union, the repercussions for the Cuban economy were daunting, affecting both foreign exchange earnings and domestic production. During the 1980s, Cuba had striven to reduce domestic oil consumption in order to re-export the surplus. Re-exported petroleum and petroleum products became the second major export (after sugar) and in a number of years, the leading source of hard currency earnings. As the months passed, it became apparent that surplus petroleum would no longer be available for re-export, and, moreover, that the shortfall would have direct repercussions on internal economic activity.

In late August 1990, when it was estimated that the oil shortfall would be on the order of 20 percent, Cuban officials announced a series of rather severe energy conservation measures. In September, as such measures as extended rationing were put into effect, it was announced that Cuba was officially in the "special period in peacetime." These measures helped to soften the impact of the shortfall in petroleum imports; the 1990 year-end tally showed that the Soviets provided about ten million tons less of oil, a 25 percent shortfall in deliveries.

My aim in this article is to provide a preliminary assessment of the effect of the demise of COMECON on the Cuban economy, focusing principally on the agricultural sector and the possibility of food self-sufficiency. After reviewing the main measures instituted in August and September as a response to the immediate crisis, I will analyze the extent of Cuba's food dependence, and then the possibilities for the national food program to successfully promote import substitution. I will conclude with a review of the recent trade agreements which the country has negotiated with the Soviet Union and China in order to assess Cuba's prospects in this period of transition.

The Special Period in Peacetime: Emergency Measures

The first set of measures, introduced on August 26, 1990, was a response both to the expected shortfall in Soviet petroleum deliveries and to the skyrocketing price of oil, occasioned by the Persian Gulf crisis.(1) The most severe measure was a mandated 50 percent cut in state energy consumption across all industries and services. State enterprises were instructed to analyze their consumption of petrol and electricity with a view toward switching to alternative technological packages if necessary. For example, in the agricultural sector, animal traction was to be utilized whenever possible, such as for transporting workers to the fields; enterprise managers were asked to increase the number of oxen raised on state farms so that if the petrol shortage were severe, they would be able to plow and cultivate without using tractors.

In many industries the reduction in energy consumption was to come primarily by reducing the number of work shifts. Other, particularly energy-intensive industries, or those dependent on scarce imported inputs, were to be closed down altogether. For example, it was decided right away to shut down the fuel-greedy Moa nickel plant, although this would reduce Cuba's potential nickel exports. The start-up of the new Cienfuegos oil refinery was postponed in view of the expected reductions in oil deliveries. All of these measures, of course, imply growing numbers of "excess" workers. Rather than allowing this to translate into growing unemployment, the government plans to entice these workers into the agricultural sector, as will be explained below.


1 -  2 -  3 -  4 -  5 -  6 -  7 -  8 -  9 -  10 -  11 -  12 -  13 -  Next