The Future of the Cuban Model: A Longer View

Abstract

The disintegration of the ‘socialist camp’, and especially the collapse of the Soviet political and socioeconomic system, sent shock waves to the Cuban economy. Cuba had by the end of 1980s become almost entirely dependent on trade with CMEA (Comecom) partners, and particularly with the Soviet Union which supplied Cuba with its fuel needs and also accounted for the lion’s share of Cuba’s sugar export markets, at preferential prices. These arrangements went down the drain practically overnight. The first reaction in Havana was a wait and see attitude (probably in the hope that the process in the Comecon countries might be reversible, at least in the former Soviet Union. Therefore, it was only in 1993, when import capacity had drastically declined by almost 70 per cent (in relation to 1989), that the government started serious reforms. The decline in import capacity was both the result of a decrease in export volume and terms of trade. By 1993 it was clear to the Cuban leadership that the process in the former ally countries was irreversible and that thus something had to be done in Havana.