Cuba remains the only communist country in this hemisphere. Their centrally planned economy is nearly bankrupt so they are trying to shift towards a more market oriented system. The government plans to lay off more than a half million state workers and encourage them to seek jobs in the private sector (although Cuba's private sector is incredibly small as 85% of Cuba's 5.5 million workers are state employees).
This will be the biggest step towards a freer economy since Cuba scrambled to stay afloat after the Soviet Union collapsed ( the Soviets were Cuba's main benefactor). This will also be President Raul Castro's first effort to revive the economy since he took over for his brother Fidel Castro.
The elder Castro had said in an interview that "the Cuban model no longer worked for any country, much less Cuba". However, later he said he was misunderstood and that it was capitalism that didn't work. Although it remains unclear whether Fidel has given his approval on this move, many believe that he will not be an obstacle in the move to capitalism.
Although in theory the move towards a free market is believed to help a country, Cuba is making a mistake. Laying off so many workers and supposedly encouraging them to join the private sector will not turn out well. Cuba has no private sector to absorb these workers. The immense number of unemployed individuals will most likely just become angry and retaliate.
This would seem to be an ideal time to repeal the trade sanctions on Cuba from the US: the Us could come make a sweeping statement about the superiority of market based systems by providing jobs to people who were laid off under a centrally planned regime. Economically it would also of course benefit us, and since the sanctions have done little to undermine the Castro regime and have instead only harmed Cuban citizens, it is high time they were repealed anyways. Doing so now makes it a much more powerful statement, as these people have all suffered at the hand of a mismanaged economy.
ReplyDeleteThis would seem to be an ideal time to repeal the trade sanctions on Cuba from the US: the Us could come make a sweeping statement about the superiority of market based systems by providing jobs to people who were laid off under a centrally planned regime. Economically it would also of course benefit us, and since the sanctions have done little to undermine the Castro regime and have instead only harmed Cuban citizens, it is high time they were repealed anyways. Doing so now makes it a much more powerful statement, as these people have all suffered at the hand of a mismanaged economy.
ReplyDelete