The centrally planning policy started in Cuba many years ago. When Fidel Castro in July of 1953 started the revolution with Ernesto “Che” Guevara they started what in a few years will become a centrally planned country. This revolutions itself was an “attacked planned revolution” and for this we can see that the signs of a centrally planned system started to appear. In this investigations we will see the characteristics of Cuba when emerging as a socialist country with a very clear economic system and also the development of the main policies carried until now.
When Fidel Castro assumed the leadership of the Revolutionary Government it was clear that a new socialist system was going to implanted in Cuba. The Revolutionary Government (1959-1963) confirmed the first signs of going towards a centrally planned system when their first action during their government was to redistribute much of the land and material wealth of the country. For many people in the lower class they was being seen a sign of improving but nevertheless the middle and upper classes suffer due to this new economic policy. Heavy subsidies and monetary injections from the Soviet Union led the Cuban people to experience a per capita average growth rate of 2.8%. Also more than 2.25 million acres once owned by United States investors were turned into large state-owned farms. With the nationalization, the nature of the Cuban economy was fundamentally altered. Today, Cuba continues to lag far behind the rest of Latin America in economic performance.
A clear characteristic that tells us about the existence of the centrally planned system in Cuba were the first reforms that Castro applied during the revolutionary government. Most of them were quite successful due to the intervention of the USSR and the great strategy settled up by Castro. In economic terms, the first reform that shows us the centrally planned economy was to buy heavy machinery for the state ( this new technology was bought from the USSR) This new machinery helped the Cuban economy due to the dependence on the sugar production was reduced.
Another sign of the centrally planned system were the following steps taken by the leader of the Cuba. After buying new machinery, in course of the years 1960 and 1961 he nationalized foreign enterprises. Although he offered long terms bonds in return he didn’t respect the human right of ownership (a clear sign of the idea that the government should be the organizer of the economy) After sometime this brought problems with the United States of America due to many American sugar mills were also nationalized.
In April of 1961, Castro announced that the revolution was officially a socialist one. Then he took the model of the Soviet Union to be applied it into Cuba. Castro shows us that he applied a centrally planned economy due to he first started a heavy national educational program which involve giving free education for all the potential students in Cuba ( the majority of the Curriculum was analyzed by the government) Also in the year 1962 he improved the health system in Cuba and increased the quality of life of the lower classes at that time.
Another sign that shows us the centrally planned system in Cuba was its relation to the United States of America. As usual this two economical system were confronted because of the different characteristics of their economies. President Kennedy (after a failed invasion to Cuba) got a lot popularity for taking a “strong stand against Communism” . In the other hand the international relations that Cuba had with other communist system are also a prove that this system was applied in this country. Castro improved the relations with China (also a centrally planned country) and therefore adopted many of the reforms that were applied by the Chinese government in that country.
In the mid 1960 Cuba increased it sugar production by the reform of the government that decided to set up an specific target. As any other centrally planned country, Cuba set up its target and the sugar production increase to 8.5 tons in 1970. Because of this Cuba started to assume a leadership role among Third World countries.
Other characteristics of the Cuban economy that can show us the centrally planned systems are the way in which Castro reformed the centrally planned economy in the 1970s. He noticed that the Cuban economy was weak and decide to look up for improvements in the centrally planned economy. The signs of this improvements in the economy are when decided to direct the system to the masses. As in any centrally planned economy the population was brought into a more important level. Castro emphasized the incentives to the workers and introduced practical ideas such as giving memberships to the population to form part of “government-controlled mass organizations”. During these year Castro stretched his relations with the Soviet block and this help him to improved the economy by reducing the shortages in the markets.
Castro showed a lot of preoccupation for the educations of the children towards building into them socialist values. He encouraged many policies to build up new schools and published books that focused on the loyalty towards the revolution. Despite this, in the 1980, Castro decide to open a little bit and experiment with economic liberalism. This is going to start a slow transition to a mixture of a centrally planned economy and a free market one.
In the 1990’s , after the dissolution of the USSR and the unfavorable policy against Cuba settled up by Bush , Castro knew that he had to set up really hard centrally planned policies if he wanted to maintain the Cuban economy in good conditions. He applied many restrictions towards food, energy and public services ( main characteristics in a centrally planned country). Moreover he added a little of economic liberalism in the economy by re-opening the enterprise of tourism and also the international trade between the state-controlled enterprises. Despite the good intentions of this measures they didn’t work and resentment started to growth against the government.
By 1995, the Cuban economy had begun a process of recovery but I has been un-even and the economy has not returned to the pre-crisis level. Cuba’s economy has suffered due to the economic slowdown of 2001. Castro has said that in order to strengthen again the Cuba’s economy human development has to be emphasized , expanding and diversifying exports should also be carried out.
In conclusion , we can see that Cuba is a very clear example of how the centrally planned economy is carried out. We can see that the government itself it’s the one that manages all the resources and impose laws. Fidel Castro’s government had had many advantages for the Cuban economy but as we have seen after loosing the support of the Soviet Union he had to introduce some liberalism to the economy. Despite this we could say that the economic system right now in Cuba is a mixed one. Another conclusion that we can arrive is that a centrally planned economy suffers a lot if others factors in the economy of other countries change drastically as in the economic slowdown of 2001.
