Cuba

República de Cuba
Flag	Coat of Arms
Capital	Havana
Government	Communist
Language	Spanish (official)
President	Raul Castro
Area	42,803 sq mi
Population	11,382,820 (2006)
GDP per capita	$3,900 (2006)
Currency	peso

Cuba is an island located in the Caribbean Sea, 90 miles south of Florida. It is the only Communist country in the Western Hemisphere.

People and Religion

Cuba is a multiracial society with a population of mainly Spanish and African origins. The largest organized religion is the Roman Catholic Church, but evangelical Protestant denominations continue to grow rapidly. Afro-Cuban religions, a blend of native African religions and Roman Catholicism, are widely practiced in Cuba. Officially, Cuba has been an atheist state for most of the Castro era. In 1962, the government of Fidel Castro seized and shut down more than 400 Catholic schools, charging that they spread dangerous beliefs among the people. In 1991, however, the Communist Party lifted its prohibition against religious believers seeking membership, and a year later the constitution was amended to characterize the state as secular instead of atheist.

While the Cuban constitution recognizes the right of citizens to freedom of religion, the government de facto restricts that freedom. Twenty-two denominations, including Presbyterians, Episcopalians, and Methodists, are members of the Cuban Council of Churches (CCC). Most CCC members are officially recognized by the State, though several, including the Evangelical Lutheran Church, are not registered and are recognized only through their membership in the CCC. Another 31 officially recognized denominations, including Jehovah's Witnesses and the small Jewish community, do not belong to the CCC. The government does not favor any one particular religion or church; however, the government appears to be most tolerant of those churches that maintain close relations to the State through the CCC. Unregistered religious groups experience various degrees of official interference, harassment, and repression. The Ministry of Interior engages in active efforts to control and monitor the country's religious institutions, including through surveillance, infiltration and harassment of religious professionals and practitioners. The most independent religious organizations--including the Catholic Church, the largest independent institution in Cuba today--continue to operate under significant restrictions and pressure imposed on them by the Cuban regime. The Cuban Government continues to refuse to allow the church to have independent printing press capabilities, full access to the media, the ability to train enough priests for its needs or allow adequate numbers of foreign priests to work in the country, or the ability to establish socially useful institutions, including schools and universities, hospitals and clinics, and nursing homes. All registered denominations must report to the Ministry of Interior's Office of Religious Affairs.

The visit of Pope John Paul II in January 1998 was seen as an important, positive event for bringing a message of hope and the need for respect of human rights. Unfortunately, these improvements did not continue once the Pope left the island. While some visas were issued for additional priests to enter Cuba around the time of the visit, the regime has again sharply restricted issuance of visas. Moreover, despite explicit regime guarantees and repeated follow-up requests, the regime has refused to permit the Catholic Church to establish Internet connections or an intranet among dioceses on the Island. In a pastoral letter entitled "There is No Country Without Virtue" ("No Hay Patria Sin Virtud"), the Cuban Conference of Catholic Bishops in February 2003 openly criticized the government's strict control over the activities of the Catholic Church, especially state restrictions on religious education and Church access to mass media, as well as the increasingly amoral and irreligious character of Cuban society under Communist rule.

Other Cuban religious groups--including evangelical Christians, whose numbers continue to grow rapidly--also have benefited from the relative relaxation of official restrictions on religious organizations and activities. Although particularly hard hit by emigration, Cuba's small Jewish community continues to hold services in Havana and has members in Santiago, Camaguey, and other parts of the island. See also the Department's report on international religious freedom for further information.

Government

Cuba is a totalitarian state formerly controlled by Fidel Castro, who is chief of state, head of government, First Secretary of the PCC, and commander in chief of the armed forces. Castro seeks to control most aspects of Cuban life through the Communist Party and its affiliated mass organizations, the government bureaucracy, and the state security apparatus. In March 2003, Castro announced his intention to remain in power for life, but has since ceded power to his brother, Raul Castro. The Ministry of Interior is the principal organ of state security and control.

According to the Soviet-style Cuban constitution of 1976, the National Assembly of People's Power, and its Council of State when the body is not in session, has supreme authority in the Cuban system. Since the National Assembly meets only twice a year for a few days each time, the 31-member Council of State wields power. The Council of Ministers, through its 9-member executive committee, handles the administration of the economy, which is state-controlled except for a tiny and shriveling open-market sector. Fidel Castro is President of the Council of State and Council of Ministers and his brother Raul serves as First Vice President of both bodies as well as Minister of Defense.

Although the constitution theoretically provides for independent courts, it explicitly subordinates them to the National Assembly and to the Council of State. The People's Supreme Court is the highest judicial body. Due process is routinely denied to Cuban citizens, particularly in cases involving political offenses. The constitution states that all legally recognized civil liberties can be denied to anyone who opposes the "decision of the Cuban people to build socialism." Citizens can be and are jailed for terms of 3 years or more for simply criticizing the communist system or Fidel Castro.

The Communist Party is constitutionally recognized as Cuba's only legal political party. The party monopolizes all government positions, including judicial offices. Though not a formal requirement, party membership is a de facto prerequisite for high-level official positions and professional advancement in most areas, although a tiny number of non-party members have on extremely rare occasions been permitted by the controlling Communist authorities to serve in the National Assembly. The Communist Party or one of its front organizations approves candidates for any elected office. Citizens do not have the right to change their government. In March 2003, the government carried out one of the most brutal crackdowns on peaceful opposition in the history of Cuba when it arrested 75 human rights activists, independent journalists and opposition figures on various charges, including aiding a foreign power and violating national security laws. Authorities subjected the detainees to summary trials and sentenced them to prison terms ranging from 6 to 28 years. Amnesty International identified all 75 as "prisoners of conscience." The European Union (EU) condemned their arrests and in June 2003, it announced its decision to implement the following actions: limit bilateral high-level governmental visits, reduce the profile of member states' participation in cultural events, reduce economic assistance and invite Cuban dissidents to national-day celebrations. See also the Department's Country Report on Human Rights Practices for Cuba.

Although the constitution allows legislative proposals backed by at least 10,000 citizens to be submitted directly to the National Assembly, in 2002 the government rejected a petition known as the Varela Project, supporters of which submitted 11,000 signatures calling for a national referendum on political and economic reforms. Many of the 75 activists arrested in March 2003 participated in the Varela Project. In October 2003, Project Varela organizers submitted a second petition to the National Assembly with an additional 14,000 signatures. Since April 2004, some prisoners of conscience have been released, seven of whom were in the group of 75; all suffered from moderate to severe medical conditions and many of them continue to be harassed by state security even after their release from prison. Moreover, in response to a planned protest by activists at the French Embassy in Havana in late July 2005, Cuban security forces detained 33 opposition members, three of whom had been released on medical grounds. At least 16 other activists were either arrested or sentenced to prison since 2004 for opposing the Cuban Government. There has also been a resurgence of harassment of various activist groups, most notably the "Damas en Blanca," a group of wives of political prisoners.

On July 31, 2006 the Castro regime announced a "temporary" transfer of power from Fidel Castro to his brother Raul, who until that time served as head of the Cuban armed forces and second-in-command of the government and the Communist Party. It was the first time in the 47 years of Fidel Castro’s rule that power had been transferred. The transfer took place due to intestinal surgery of an undetermined nature.

On February 19, 2008, Fidel Castro announced that he would officially step down as leader of Cuba. Five days later, on February 24, Raul Castro, Fidel's brother, was elected the new President of Cuba.

Foreign Relations

Cuba's once-ambitious foreign policy has been scaled back and redirected as a result of economic hardship and the end of the Cold War. Cuba aims to find new sources of trade, aid, and foreign investment and to promote opposition to U.S. policy, especially the trade embargo and the 1996 Libertad Act. Cuba has relations with over 160 countries and has civilian assistance workers--principally physicians and nurses--in more than 20 nations.

Since the end of Soviet backing, Cuba appears to have largely abandoned monetary support for guerrilla movements that typified its involvement in regional politics in Latin America and Africa, though it maintains relations with several guerrilla and terrorist groups and provides refuge for some of their members in Cuba. Cuba's support for Latin guerrilla movements, its Marxist-Leninist government, and its alignment with the U.S.S.R. led to its isolation in the hemisphere. Cuba is a member of the Organization of American States (OAS), although its present government has been excluded from participation since 1962 for incompatibility with the principles of the inter-American system. Cuba hosted the Non-Aligned Movement (NAM) summit in September 2006 and will hold the NAM presidency until 2009. In the context of the NAM and its ordinary diplomacy, Cuba has developed friendly relations with Iran, North Korea and other rogue states.

Throughout the 1970s and 1980s, Cuba expanded its military presence abroad, spending millions of dollars in exporting revolutions; deployments reached 50,000 troops in Angola, 24,000 in Ethiopia, 1,500 in Nicaragua, and hundreds more elsewhere. In Angola, Cuban troops, supported logistically by the U.S.S.R., backed the Popular Movement for the Liberation of Angola (MPLA) in its effort to take power after Portugal granted Angola its independence. Cuban forces played a key role in Ethiopia's war against Somalia and remained there in substantial numbers as a garrison force for a decade. Cubans served in a non-combat advisory role in Mozambique and the Congo. Cuba also used the Congo as a logistical support center for Cuba's Angola mission. In the late 1980s, Cuba began to pull back militarily. Cuba unilaterally removed its forces from Ethiopia, met the timetable of the 1988 Angola-Namibia accords by completing the withdrawal of its forces from Angola before July 1991, and ended military assistance to Nicaragua following the Sandinistas' 1990 electoral defeat.

EU-Cuban diplomatic relations have suffered as a result of the March 2003 crackdown on dissidents. In June 2004, EU members imposed restrictive measures on Cuba including inviting dissidents to national day celebrations and suspending high-level meetings between EU members and the Cuban Government. In January 2005, though, the restrictions were suspended in an effort to re-engage the regime as a means of advancing the EU’s policy of encouraging reform while preparing for the transition.

Spain is among the most important foreign investors in Cuba. The ruling Zapatero government continues Spain’s longstanding policy of encouraging further investment and trade with Cuba. Cuba imports more goods from Spain (almost 13% of total imports) than from any other country. Spanish economic involvement with Cuba is exclusively centered on joint venture enterprises that provide financial benefit to the Cuban Government through state-owned firms. Spain’s desire to provide support to its business community often impedes its willingness to pressure the Cuban Government on political reform and human rights issues.

Cuba’s bilateral relationship with Venezuela has helped keep the Cuban economy afloat. The "Integral Cooperation Accord" signed by Fidel Castro and Venezuelan President Hugo Chavez in October 2000 laid the groundwork for a quasi-barter exchange of Venezuelan oil for Cuban goods and services that has since become a lifeline for Cuba. For Cuba, the benefits of the cooperation accord are subsidized petroleum and increased hard currency flows. The original agreement allowed for the sale, at market prices, of up to 53,000 barrels per day of crude oil and derivatives (diesel, gasoline, jet fuel, etc.) by PDVSA, Venezuela's state-owned petroleum company, to its Cuban counterpart, CUPET. The number of barrels of oil Venezuela began selling to Cuba has risen to over 90,000 barrels daily. Under the accord, PDVSA extended preferential payment terms to CUPET, including 90-day short-term financing instead of the 30 days offered to its other customers and, in lieu of a standard letter of credit backed by an international bank, PDVSA accepted IOUs from Cuba's Banco Nacional, the central banking entity responsible for servicing Havana's foreign debt. In August 2001, Venezuelan President Hugo Chavez amended the 2000 accord to allow Venezuela to compensate the Cuban Government in hard currency for any and all Cuban products and services originally intended as in-kind payment for Venezuelan oil. As a result, Cuban exports of goods and services to Venezuela climbed from $34 million in 2001 to more than $150 million in 2003. Venezuelan ministries are contracting with Cuba for everything from generic pharmaceuticals to pre-fabricated housing and dismantled sugar mill equipment. On April 28, 2005, Chavez and Castro signed 49 economic agreements in Havana, covering areas as diverse as oil, nickel, agriculture, furniture, shoes, textiles, toys, lingerie, tires, construction materials, electricity, transportation, health, and education. Venezuela is also committed to sending more than $400 million in various products duty free to Cuba and plans to open an office of state-owned commercial Venezuelan Industrial Bank (BIV) in Havana to finance imports and exports between the two countries, while Cuba will open an official Banco Exterior de Cuba in Caracas. Increased economic engagement along with the rapid growth in Cuban sales to Caracas has established Venezuela as one of the island's largest export markets.

A series of recent economic agreements between Cuba and China have strengthened trade between the two countries. Sino-Cuban trade totaled more than $525 million in 2004, according to China Customs statistics. This represents an increase of more than 47% over 2003. Most of China’s aid involves in-kind supply of goods or technical assistance. During President Hu-Jintao’s visit to Cuba in November 2004, China signed investment-related memorandums of understanding (MOUs) estimated at more than $500 million, according to press reports. If these MOUs are fully realized, they would represent a sharp increase in known Chinese investments in Cuba. In addition to these MOUs, a number of commercial accords were signed at the first-ever Cuba-China Investment and Trade Forum. China also plans to invest approximately $500 million in a nickel operation in Moa in the eastern province of Holguin. According to the MOU, Cuba will own 51% of the enterprise and Chinese-owned Minmetals the remaining 49%. Chinese and Venezuelan economic support, including investment and direct aid, have given Cuba the space to eliminate many of the tentative open market reforms Cuba put in place during the depth of its mid-1990s economic crisis.

The Russian prime minister visited Cuba in October 2006, signaling a new effort to expand trade and investment, albeit financed by Russian credit. Russia set aside, for the moment, more than USD 20 billion in Soviet-era debt, restructured post-1991 debt, and extended a new credit line to Cuba. The new credit line is for USD 355 million repayable over 10 years at an interest rate of five percent. The new credit is conditioned in that it must be used to purchase Russian cars, trucks, planes, as well as to finance Cuban energy and transport infrastructure projects, including air navigation systems. Russia further agreed to restructure USD 166 million in debt accumulated since 1993. Both nations also signed an agreement on military equipment and technical services.

Defense

Under Castro, Cuba is a highly militarized society. From 1975 until the late 1980s, massive Soviet military assistance enabled Cuba to upgrade its military capabilities and project power abroad. The tonnage of Soviet military deliveries to Cuba throughout most of the 1980s exceeded deliveries in any year since the military build-up during the 1962 missile crisis.

With the loss of Soviet-era subsidies in the early 1990s, Cuba's armed forces have shrunk considerably, both in terms of numbers and assets. Combined active duty troop strength for all three services is estimated at 50,000 to 55,000 personnel (compared to some 235,000 on active duty 10 years ago) and much of Cuba's weaponry appears to be in storage. Cuba's air force, once considered among the best equipped in Latin America, no longer merits that distinction, though it still possesses advanced aircraft and weapons systems; the navy has become primarily a coastal defense force with no blue water capability. The Cuban army is still one of the region's more formidable, but it also is much reduced and no longer has the considerable resources necessary to project power abroad.

The military plays a growing role in the economy and manages a number of hotels in the tourist sector. The country's two paramilitary organizations, the Territorial Militia Troops and the Youth Labor Army, have a reduced training capability. Cuba also adopted a "war of the people" strategy that highlights the defensive nature of its capabilities. The government continues to maintain a large state security apparatus under the Ministry of Interior to repress dissent within Cuba, and in the last decade has formed special forces units to confront indications of popular unrest.

Human Rights Issues

Cuba’s totalitarian regime controls all aspects of life through the Communist Party (CP) and its affiliated mass organizations, the government bureaucracy and the Department of State Security. The latter is tasked with monitoring, infiltrating and tormenting the country’s beleaguered human rights community. The government continues to commit serious abuses, and denies citizens the right to change their government.

The government incarcerates people for their peaceful political beliefs or activities. The total number of political prisoners and detainees is unknown, because the government does not disclose such information and keeps its prisons off-limits to human rights organizations. As of July 1, 2006, at least 316 Cubans were being held behind bars for political crimes, according to the independent Cuban Commission for Human Rights and National Reconciliation.

The government places severe limitations on freedom of speech and press. Reporters Without Borders calls Cuba the world’s second biggest jailer of journalists. The constitution provides for freedom of speech and press insofar as they "conform to the aims of a socialist society." The government considers the Universal Declaration of Human Rights and foreign mainstream magazines and newspapers to be enemy propaganda. Access to the Internet is strictly controlled and given only to those deemed ideologically trustworthy.

Freedom of assembly is not a right in today’s Cuba. The law punishes any unauthorized assembly of more than three persons. The government also restricts freedom of movement and prevents some citizens from emigrating because of their political views. Cubans need explicit "exit permission" from their government to leave their country, and many people are effectively held hostage by the Cuban government, despite the fact that they have received travel documents issued by other countries.

The government does not tolerate dissent. It targets dissenters by directing militants from the CP, the Communist Youth League, Committees for the Defense of the Revolution, the Federation of Cuban Women, the Association of Veterans of the Cuban Revolution, and other groups to stage a public protest against the dissenter, usually in front of his/her house. These protests, called "acts of repudiation," involve the shouting of insults and the occasional use of violence. The events generate intense fear and are aimed at ostracizing and intimidating those who question the government’s policies.

Prison conditions are harsh and life-threatening. Although physical torture is rare, cruel treatment of prisoners – particularly political prisoners and detainees – is common. Prison authorities frequently beat, neglect, isolate and deny medical treatment to inmates. Authorities often deny family visits, adequate nutrition, exposure to sunshine, and pay for work. Overcrowding is rife. Inmates friendly with prison guards often receive preferential treatment. This leads to abuse, whereby connected inmates assault others with impunity. Desperation inside the country’s estimated 200 prisons and work camps is at high levels and suicides and acts of self-mutilation occur. Thousands of Cubans are currently imprisoned for "dangerousness," in the absence of any crime.

Worker rights are largely denied. The law does not allow Cuban workers to form and join unions of their choice. The government-approved unions do not act as trade unions, promote worker rights or protect the right to strike; rather, they are geared toward ensuring that production goals are met. Some workers lose their jobs because of their political beliefs. Salaries are not high enough to meet food and clothing costs; consequently, many Cubans are forced into small-scale embezzlement or pilfering from their employers.

Economy

The Cuban Government continues to adhere to socialist principles in organizing its state-controlled economy. Most of the means of production are owned and run by the government and, according to Cuban Government statistics, about 75% of the labor force is employed by the state. The actual figure is closer to 93%, with some 150,000 small farmers and another 150,000 "cuentapropistas," or holders of licenses for self-employment, representing a mere 2.1% of the nearly 4.7 million-person workforce.

The Cuban economy is still recovering from a decline in gross domestic product of at least 35% between 1989 and 1993 as the loss of Soviet subsidies laid bare the economy's fundamental weaknesses. To alleviate the economic crisis, in 1993 and 1994 the government introduced a few market-oriented reforms, including opening to tourism, allowing foreign investment, legalizing the dollar, and authorizing self-employment for some 150 occupations. These measures resulted in modest economic growth; the official statistics, however, are deficient and as a result provide an incomplete measure of Cuba's real economic situation. Living conditions at the end of the decade remained well below the 1989 level. Lower sugar and nickel prices, increases in petroleum costs, a post-September 11, 2001 decline in tourism, devastating hurricanes in November 2001 and August 2004, and a major drought in the eastern half of the island caused severe economic disruptions. Growth rates continued to stagnate in 2002 and 2003, while 2004 and 2005 showed some renewed growth. Moreover, the gap in the standard of living has widened between those with access to dollars and those without. Jobs that can earn dollar salaries or tips from foreign businesses and tourists have become highly desirable. It is not uncommon to see doctors, engineers, scientists, and other professionals working in restaurants or as taxi drivers.

Castro’s regime has pulled back on earlier market reforms and is seeking tighter state control over the economy. The Cuban Government is aggressively pursuing a policy of recentralization, making it increasingly difficult for foreigners to conduct business on the island. Likewise, Cuban citizens are adversely affected by reversion to a peso economy.

Prolonged austerity and the state-controlled economy's inefficiency in providing adequate goods and services have created conditions for a flourishing informal economy in Cuba. As the variety and amount of goods available in state-run peso stores has declined, Cubans have turned increasingly to the black market to obtain needed food, clothing, and household items. Pilferage of items from the work place to sell on the black market or illegally offering services on the sidelines of official employment is common, and Cuban companies regularly figure 15% in losses into their production plans to cover this. Recognizing that Cubans must engage in such activity to make ends meet and that attempts to shut the informal economy down would be futile, the government concentrates its control efforts on ideological appeals against theft and shutting down large organized operations. A report by an independent economist and opposition leader speculates that more than 40% of the Cuban economy operates in the informal sector. Since 2005, the government has carried out a large anti-corruption campaign as it continues efforts to recentralize much of the economy under the regime's control.

Sugar, which has been the mainstay of the island's economy for most of its history, has fallen upon troubled times. In 1989, production was more than 8 million tons, but by the mid-1990s, it had fallen to around 3.5 million tons. Inefficient planting and cultivation methods, poor management, shortages of spare parts, and poor transportation infrastructure combined to deter the recovery of the sector. In June 2002, the government announced its intention to implement a "comprehensive transformation" of this declining sector. Almost half the existing sugar mills were closed, and more than 100,000 workers were laid off. The government has promised that these workers will be "retrained" in other fields, though it is unlikely they will find new jobs in Cuba's stagnant economy. Moreover, despite such efforts, the sugar harvest continued to decline, falling to 2.1 million tons in 2003, the smallest since 1933. The harvest was not much better in 2004, with 2.3 million tons, and even worse in 2005, with 1.3 million tons.

In the mid-1990s, tourism surpassed sugar as the primary source of foreign exchange. Tourism figures prominently in the Cuban Government's plans for development, and a top official cast it as at the "heart of the economy." Havana devotes significant resources to building new tourist facilities and renovating historic structures for use in the tourism sector. Roughly 1.7 million tourists visited Cuba in 2001, generating about $1.85 billion in gross revenues; in 2003, the number rose to 1.9 million tourists, predominantly from Canada and the European Union, generating revenue of $2.1 billion. The number of tourists to Cuba in 2004 crossed the 2 million mark (2.05 million), including the so-called "medical tourists" from other Latin American countries seeking free medical treatment at Cuban facilities. In 2005 the number of tourists increased to 2.32 million.

Nickel is now the biggest earner among Cuba's goods exports. The nickel industry has been operating close to full capacity and therefore currently stagnant, but it is benefiting from unprecedented increases in world market prices. Revenues have more than doubled from $450 million in 2001 to $1 billion in 2005. The government is making attempts to increase extraction capacity.

Remittances also play a large role in Cuba's economy. Cuba does not publish accurate economic statistics, but academic sources estimate that remittances total from $600 million to $1 billion per year, with most coming from families in the United States. U.S. regulation changes announced in June 2004 allow remittances to be sent only to the remitter's immediate family; they cannot be remitted to certain Cuban Government officials and members of the Cuban Communist party; and the total amount of family remittances that an authorized traveler may carry to Cuba is now $300, reduced from $3,000. (See also the Commission on Assistance to a Free Cuba report at www.cafc.gov, cited below.) The Cuban Government captures these dollar remittances by allowing Cuban citizens to shop in state-run "dollar stores," which sell food, household, and clothing items at a high mark-up averaging over 240% of face value.

Beginning in November 2004, Castro mandated that U.S. dollars be exchanged for "convertible pesos"--a local currency that can be used in special shops on the island but has no value internationally--for a 10% charge. The 10% conversion fee disproportionately affects Cubans who receive remittances from relatives in the U.S.

To help keep the economy afloat, Cuba has actively courted foreign investment, which often takes the form of joint ventures with the Cuban Government holding half of the equity, management contracts for tourism facilities, or financing for the sugar harvest. A new legal framework laid out in 1995 allowed for majority foreign ownership in joint ventures with the Cuban Government. In practice, majority ownership by the foreign partner is nonexistent. Of the 540 joint ventures formed since the Cuban Government issued the first legislation on foreign investment in 1982, 397 remained at the end of 2002, and 287 at the close of 2005. Due in large part to Castro’s recentralization efforts, it is estimated that one joint venture and two small cooperative production ventures have closed each week since 2000. Responding to this decline in the number of joint ventures, a spokesperson for the Ministry of Foreign Investment explained that foreign investment is not a pillar of development in and of itself. Moreover, the hostile investment climate, characterized by inefficient and overpriced labor imposed by the communist government, dense regulations, and an impenetrable bureaucracy, continue to deter foreign investment. Foreign direct investment flows decreased from $448 million in 2000 to $39 million in 2001 and were at zero in 2002. In July 2002, the European Union, through its embassies in Havana, transmitted to the Cuban Government a document that outlined the problems encountered in operating joint ventures in Cuba. Titled "The Legal and Administrative Framework for Foreign Trade and Investment by European Companies in Cuba," the paper noted the difficulty in obtaining such basic necessities as work and residence permits for foreign employees--even exit visas and drivers licenses. It complained that the Government of Cuba gave EU joint venture partners little or no say in hiring Cuban staff, often forced the joint venture to contract employees who were not professionally suitable, and yet reserved to itself the right to fire any worker at any time without cause. It noted administrative difficulties in securing financing and warned that "the difficulties of state firms in meeting their payment obligations are seriously threatening some firms and increasing the risk premium which all operators have to pay for their operations with Cuba." The Cuban Government offered no response.

Investors are also constrained by the U.S.-Cuban Liberty and Democratic Solidarity (Libertad) Act that provides sanctions for those who "traffic" in property expropriated from U.S. citizens. More than a dozen companies have pulled out of Cuba or altered their plans to invest there due to the threat of action under the Libertad Act.

In an attempt to provide jobs for workers laid off due to the economic crisis and bring some forms of black market activity into more controllable channels, the Cuban Government in 1993 legalized self-employment for some 150 occupations. This small private sector is tightly controlled and regulated. Set monthly fees must be paid regardless of income earned, and frequent inspections yield stiff fines when any of the many self-employment regulations are violated. Rather than expanding private sector opportunities, in recent years, the government has been attempting to squeeze more of these private sector entrepreneurs out of business and back to the public sector. Many have opted to enter the informal economy or black market, and others have closed. These measures have reduced private sector employment from a peak of 209,000 to less than 100,000 now. Moreover, a large number of those people who nominally are self-employed in reality are well-connected fronts for military officials. No recent figures have been made available, but the Government of Cuba reported at the end of 2001 that tax receipts from the self-employed fell 8.1% due to the decrease in the number of these taxpayers. Since October 1, 2004, the Cuban Government no longer issues new licenses for 40 of the approximately 150 categories of self-employment, including for the most popular ones, such as private restaurants.

In June 2005, 2,000 more licenses were revoked from self-employed workers as a means to reassert government control over the economy and to stem growing inequalities associated with self-employment. The licenses for self-employed workers were typically for service-oriented work, allowing the Cuban people to eke out a small living in an otherwise impoverished state. Moreover, workers in Cuba’s tourist sector--at resorts where native Cubans are prohibited unless they are on the job--have been prohibited by a Ministry of Tourism regulation from accepting gifts, tips, or even food from foreigners, in a further attempt at increasing the tourist apartheid that exists on the island.

A 2004 UN Economic Commission on Latin America and the Caribbean (ECLAC) report recommends that Cuba "redesign the parameters of competition in the public, private and cooperative sectors [and] redefine the role of the state in the economy." It recommends more flexibility in self-employment regulations, property diversification, economic decentralization, and a role for the market. The Cuban Government, however, is today reversing the economic liberalization of the 90s and re-centralizing its economy. Evidence of this is found in the decline in the number of firms participating in the perfeccionamiento empresarial, or entrepreneurial improvement (EI), program, which is based on capitalist management techniques. EI was instituted in the 1980s as a military-led pilot project, and in 1998, the Cuban Government extended it from military to civilian "parastatals," reportedly to foster capitalist competitiveness. At first, the government highlighted participating companies' achievements in cutting costs and boosting profitability and quality and suggested that the increased autonomy of state managers under EI was producing an efficient form of socialism with a strong link between pay and performance. However, many in the Communist Party, even Castro himself, resisted EI. Many of the original participants have since left the program and participating firms have seen little growth in revenue. The EI program has fallen far short of expectations and the Cuban Government no longer heralds its successes or its future prospects. In 2003 the Cuban Government also tightened foreign exchange controls, requiring that state companies hold money in convertible pesos and obtain special authorization from the central bank before making hard currency transactions. Practically speaking, this restricted companies from using the dollar for internal trade. Following this, in 2004 the government announced that all state entities must stop charging in U.S. dollars and charge only in pesos for any products and services not considered a part of a company’s "fundamental social objective." It also recently implemented new requirements to channel imports through monopolistic Soviet-style wholesale distribution companies.

Cuba's precarious economic position is complicated by the high price it must pay for foreign financing. The Cuban Government defaulted on most of its international debt in 1986 and does not have access to credit from international financial institutions like the World Bank, which means Havana must rely heavily on short-term loans to finance imports, chiefly food and fuel. Because of its poor credit rating, an $11 billion hard currency debt, and the risks associated with Cuban investment, interest rates have reportedly been as high as 22%. In 2002, citing chronic delinquencies and mounting short-term debts, Moody's lowered Cuba's credit rating to Caa1 -- "speculative grade, very poor." Dunn and Bradstreet rate Cuba as one of the riskiest economies in the world.

Health-care

Health care in Cuba follows the model of socialized medicine; all doctors are employees of the government, and the government does not charge citizens for health care, though many believe the services provided are alarmingly inferior for anyone but the party elite. Fred Thompson wrote:

"Castro won't allow observers in to monitor his nation's true state, but defectors tell us that many Cubans live with permanent malnutrition and long waits for even basic medical services. Many treatments we take for granted aren't available at all -- except to the Communist elite or foreigners with dollars. For them, Castro keeps "show" clinics equipped with the best medicines and technologies available."

The country's chief neurosurgeon, Hilda Morina, publicly protested the government's role in the deterioration of the health care system.

Education

According to the CIA World Factbook, the education system has achieved a 97% literacy rate on the island.

Assistance at universities even in the provinces, while nominally free, requires demonstration of loyalty to the government, such as belonging to the informer network Comités de Defensa de la Revolución, the Militias, and assistance at pro-government demonstrations. In pre-Castro times university fees were waved on presentation of proof of lack of means,

History

As part of Spain

In 1492, Cuba was Christopher Columbus's first sight in his first and most famous voyage to the Americas. Spain took control from a series of Neo-Taino chiefdoms in 1511.

Over three hundred years later, in 1868, a Creole farmer, Carlos Manuel de Céspedes, started a revolution for independence from Spain. Spain put down the insurgency after a ten-year struggle.

Under Spanish rule, Cuba relied on slavery longer than all nations in the Western Hemisphere except Brazil. Cuba had a slave trade from 1521 to 1886. In 1880, the Spanish Cortes approved the abolition law, which provided for an eight-year period of patronato (tutelage) for all slaves liberated according to the law. This only amounted to indentured servitude ^{[Who says?]} as slaves were required to spend those eight years working for their masters at no charge. On October 7, 1884, slavery was finally abolished in Cuba by a Royal Decree that also made the patronato illegal. In 1893, Cuba granted equal rights to all.

Treaty of Paris

Cuban natives revolted against Spanish rule fighting for 10 years from 1868 to 1878. Discontent again came to a head when on February 23rd, 1895 constitutional guarantees were suspended. Open revolt ensued which led to stringent, but unsuccesful measures taken by the Spanish to stop the rebellion. The Spanish had 200,000 men on the island to keep order. After initial Spanish efforts to stop the fighting by fencing in the insurgent areas with barbed wire and entrenchments didn't work, General Valeriano Weyler established what are now known as concentration camps, where noncombatants were swept up from their homes and confinded under abominable conditions. Americans were shocked to hear of the loss of life at these camps through disease or starvation. America demanded that Weyler be recalled. Spain acquiesced in October 1897, but tensions between the two countries still ran high. When the USS Maine blew up while docked in Havana Harbor in Cuba on February 15, 1898, Spain was blamed and the United States declared the war. President McKinley approved this Resolution of Congress:

Whereas the abhorrent conditions which have existed for more than three years in the island of Cuba, so near our own borders, have shocked the moral sense of the people of the United States, have been a disgrace to Christian civilization, culminating, as they have, in the destruction of a United States battle ship, with 266 of its officers and crew, while on a friendly visit in the harbor of Havana, and cannot longer be endured ...

Resolved by the Senate and House of Representatives ... That the people of the island of Cuba are and of right ought to be free.

The Spanish American War began on April 25, 1898. Spain's defeat led to Spain relinquishing Cuba to United States jurisdiction on December 10, 1898 at the Treaty of Paris.

• The result was Cuba's freedom, under temporary U.S. occupation. Treaty of Paris

Early Republic

Tomás Estrada Palma Cuba's first elected president took office in 1902. Tomas Estrada Palma was reelected in 1906, but this time against violent opposition by the Liberals. US troops were not needed put down the Liberal revolt, since the military leaders of the successful revolt [2], negotiated nominally with William H. Taft and Robert Bacon [3] but in reality with US General Frederick Funston who had also been a Mambi, took their “borrowed” horses and went home. Soon Estrada Palma resigned, against the wishes of Roosevelt, and another American government was established in Cuba under Charles Magoon.

In 1908, U.S. intervention ended when José Miguel Gómez was elected President, but the U.S. retained its Platt Amendment right to intervene in Cuban affairs.

1912 Race War

In 1912 Partido Independiente de Color attempted to establish a separate black republic in Oriente Province. Perhaps because the group lacked sufficient weaponry the main tactic was to set businesses and private residences on fire. The movement was a failure and General Monteagudo suppressed the rebels with considerable bloodshed. Historians differ on the interpretation of this circumstance. Some view it as suppression of Black rights, others as an attempt at racial cleansing and secession on part of the Black activists. The level of blood shed,according to some contemporary accountsm was far less than some present academics sustain.

World War I

During WW I elected president Mario Menocal, a Cuban War of Independence hero, was serving his disputed second term after his military victory over the Liberales in the Chambelona War. Contemporary accounts mention putative links between Liberales and Germany, U.S. President Woodrow Wilson declined to intervene in the Chambelona conflict which can, although it is not a popular view in Liberal circles, be considered part of WW I. At that time the New York Times was carrying reports that suggested German U-boat resupply from Cuba.

Some Cubans flew combat for France notable Captain Francisco Terry Sanchez and Lieutenant Santiago Campuzano

Cuba shipped considerable sugar to Britain, via smuggling which avoided U-boat attack by the subterfuge of shipping sugar to Sweden (this operation was managed by Cuban Ambassador Carlos Garcia Velez, General Calixto Garcia's eldest surviving son). During the unsuccessful revolt (the Chambelona War) against the Menocal government in 1917, the government attributed this in part to pro-German sentiment on part of the "Liberales." However, this was not proven to most historians' satisfaction. The Menocal government declared war on Germany very soon after the U.S. did, and as a result the Mexican government broke off relations with Cuba

Alfredo Zayas y Alfonso (1861 - 1934) was a Cuban lawyer, poet and political figure. He served as prosecutor, judge, mayor of Havana, Senator 1905, President of the Senate 1906, Vice-President 1908-13 and President of Cuba and elected president served from May 20, 1921 to May 20, 1925.

Cuba 1924-1933

Gerardo Machado, at first an elected president took power in 1924. Machado was a Cuban nationalist and his regime had considerable local support despite its violent suppression of critics. However, it was during this period that Soviet intrusion into Cuban affairs began with the arrival in Cuba of Fabio Grobart. During Machado's tenure, Cubans gained greater control over their own economy and major national development projects were undertaken. His hold on power was weakened, by the lowering demand of exported agricultural produce due to the Great Depression, the attacks first by War of Independence Veterans (lead by Independence general and ex-expresident Mario G. Menocal and others; however, they were defeated in 1931 primarily due to informants (said by some to have included the Cuban communist party) and the employment of government aviation. The principal encounters are Ceja del Negro in Western Cuba and Gibara in Eastern Cuba. After the defeat of the old Independence fighters other groups formed covert terrorist organizations principally the ABC

Then during a general strike in which the communist party took the side of Machado the Senior elements of the Cuban army forced Machado into exile and installed Carlos Manuel de Céspedes, son of Cuba's founding father, as President. In September, 4th-5th 1933) however, a second coup (led by sergeants, most notably Fulgencio Batista, overthrew Céspedes leading to the formation of the first Ramón Grau San Martín government. This government lasted just 100 days, but engineered radical liberal changes in Cuban society and a rejection of the Platt amendment.

1940-1952

In 1940 after a series of defacto presidents more or less under his control since 1933, Fulgencio Batista ran for presidency and won. A year later, Batista's administration formally took Cuba into World War II as a U.S. ally, declaring war on Japan on December 9, 1941, then on Germany and Italy on December 11, 1941. At the end of his term in 1944, Batista stepped down and Ramón Grau San Martin was elected to succeed him.

While Cuba, although supplying vast quantities of sugar, and strategic manganese metal, was not greatly involved combat in WWII; although, U.S. air bases were established, Cuban freighters were sunk, a German spy was discovered and executed, and a German submarine was sunk by the Cuban Navy. During WWII the Nazis counterfeited vast sums of U.S, currency which was sent via the Dozenberg group to Cuba and other parts of Latin America; Soviet directions to the Cuban communist party, seem to have been sent via radio from Switzerland by the Alexander Foote Network

A second elected president Antonio Prio Socarras took office in 1948.

Batista's coup

In 1952, Batista again ran for office, when it became apparent to Batista that he could not win, he staged a coup, whereby he again took office. In 1954, due to United States pressure, Batista agreed to hold elections, however ex-President Grau, withdrew from the race amid allegations that Batista was rigging the elections. In April 1956, Batista gave orders for Ramon Barquin to become General and Chief of the Army, however Barquin had already planned another coup to overthrow Batista. The coup was overthrown, and the officers were sentenced to the maximum terms allowed by Cuban Martial Law. Barquin was sentenced to solitary confinement for 8 years.

Communist Revolution

In 1956, a party of rebels led by Fidel Castro, landed in a yacht from Mexico and tried to start an armed resistance movement. In Mexico, the army was strengthened by the cooperation of Ernesto Che Guevara, who later became one of the most important people in the Cuban revolution. Throughout 1957 and 1958, opposition to Batista grew. However, during this process overt communists in the 26-July movement (such Ernesto Guevara, Raul Castro and Vilma Espin), employed a process of infiltration, false accusations, betrayals and executions that eliminated many non-communist insurgents. In response to Batista's plea to purchase better arms from the U.S. in order to root out the insurgents in the mountains, the United States government imposed an arms embargo on the Cuban government on March 14, 1958. Later in 1958, the rebels achieve significant victories, and Batista fled the country. Castro’s rebel forces entered the capital on January 8, 1959. As soon as the rebel troops loyal to Castro reached Havana the masked purges of non-communist rebels were again implemented, and following that rural armed resistance to Castro, sometimes called War Against the Bandits became apparent.Shortly after Dr. Manuel Leo Urrutia assumed power, to be followed by the February election of Castro to Prime Minister. Later in April, seeking to end the embargo as the new government had taken over, Castro, then despite his radical background and Spanish loyalist roots, played the role of a staunch United States supporter, flew to the United States to meet with President Eisenhower, however rather than meet with Castro, Eisenhower decided to play in a golf match. He did meet with then vice president Richard Nixon who reported that Castro probably was naive or a \a communist. The action marked the beginning of deteriorating relations between the two countries. In 1960, Castro officially declared Cuba communist. during the administration of President John F. Kennedy. They argued that the missiles were fair ground due to the United States having placed missiles in Turkey in a previous year. The high-pressure controversy that resulted quickly subsided when both sides withdrew.

The USSR provided $11 million in aid per day to Cuba, which, in turn, served as a Soviet client state to advance revolution in Nicaragua and El Salvador. [4]

References

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External links

• Cuba: A US Colony?