The island nation of Cuba is known for its long and proud history of being one of the largest sugar manufacturers worldwide. Cultivation of sugar cane began as soon as Spaniards landed in the vicinity of the West Indies in the late 15th century, bringing with them the commodity which would drive the island’s economy for generations. Achieving phenomenal success throughout the 19th and 20th centuries, Cuba’s flourishing agricultural industry earned it a spot among the most highly developed Latin American nations. In 1959, however, Cuba’s relative well-being came crashing down as Fidel Castro’s rebel forces marched into the capital, completely removing all traces of the previous government. Castro’s rule saw the country transform beyond recognition, introducing communism as the new ideology and the Soviet bloc as its chief trading partner.
As has been mentioned, sugar cane has been present in Cuba from the time of the Spanish colonial expansion. Originally cultivated in small amounts only for local consumption, full-on production did not start until the beginning of the 19th century.
Cuba’s new class of sugar planters had established a strong presence on the global market by the 1850’s, providing the world one with one third of its sugar supply. US capital moved in to buy out sectors of the profitable industry, directing financial flows from the sugar trade into the United States.
Although the economy boomed and their work generated tremendous revenue, field laborers faced harsh conditions on the plantations. Slavery was abolished by the 1880’s, but true freedom was not available due to lack of alternative job opportunities. A Cuban field worker could expect to receive fifty cents a day, as well as minor rations in the form of bread, potatoes, coffee and beef. Plantations operated this way until the beginning of the Cuban War of Independence. After the war Cuba’s production capacity had greatly deteriorated, however, the breakout of World War I offered the country a chance at a quick comeback. Sugar prices went up and the earnings of Cuban and foreign mill owners experienced strong growth, while traditional European sugar producers in Belgium and France were devastated by the fighting. Cuba’s economy continued to reap the benefits of this period of rapid development, relying on sugar exports as its main source of income well into the 1950’s.
The concept of sugar production was completely revamped after Fidel Castro’s proclamation of a communist state. Taking pride in his adoption of the Soviet economic model, Castro set his sights on industrializing the Cuban economy and introduced heavy machinery for the cultivation and processing of sugar cane. Exports were now targeted exclusively at countries of the Eastern bloc, and Cuba was the sole producer of sugar among nations part of the Soviet-dominated Council of Mutual Economic Assistance.
Castro tried to follow the Soviet example everywhere he could. Ambitious production goals were stated, vast amounts of fuel and technology were imported, and production grew to 7.58 million tons by the year 1989 (Salazar-Carrillo, 2013). However, this approach proved to be highly inefficient. The machines needed to be serviced, the soil fertilized and the crops grown with pesticide. These expenses were covered by subsidies offered to Cuba by the USSR. In 1990, Cuba was producing sugar virtually for the same price others were willing to pay for it on the international market, making ends meet only through Moscow’s financial aid. This meant catastrophic failure in all sectors of the national economy following the breakup of the Soviet Union in 1991, leading to a steady decline in production and bringing the country to its knees. Others soon surpassed Cuba in sugar production, and the island nation was the only sugar supplier within the previous decade to have its market share reduced by a dramatic figure of 40%.
Cuba has attempted to conduct a few market reforms in the last ten years. Gone is the ineffective Sugar Ministry of the 1990’s responsible for production, shipping and distribution. Investment opportunities are being opened to foreigners, production is once again on the rise. Reuters (2014) has the following data: “AZCUBA, the state-run holding company that replaced the Sugar Ministry three years ago, announced plans to produce 1.8 million tonnes of raw sugar this season, 18 percent more than last season's 1.6 million tonnes”. Considering the government is planning to sell out a few mills to overseas companies, perhaps we are finally witnessing the communist ideology adapt to today’s economic reality, in which no single nation can expect to see any growth if does not open its doors to international cooperation.
References
Retrieved from http://www.historyofcuba.com/history/havana/Sugar1b.htm
Salazar-Carrillo, J. (2013, Novemver). The Collapse of the Cuban Sugar Industry: An Economic
Autopsy. Ideas. Retrieved from https://ideas.repec.org/p/fiu/wpaper/1306.html
Reuters. Retrieved from http://www.reuters.com/article/2014/03/04/cuba-sugar
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