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The Five Main Causes of Poverty in Cuba

Causes of Poverty in CubaCuba is a unique island nation whose economy has been the subject of contention for decades. It is also a poor country that struggles to provide housing, transportation and other necessities. The Borgen Project outlines five of the main causes of poverty in Cuba.

Top 5 Causes of Poverty in Cuba

1. U.S. Embargo

Following Fidel Castro’s assumption of power in 1961, the U.S. imposed an embargo that abruptly deprived Cuban exporters of the recipient of 95 percent of their exports. Since then, the embargo has strictly restricted Cubans’ access to American products, contributing to shortages of everything from food, to electronics and internet access. The legislation of the embargo even includes sanctions against other countries that do business with Cuba. In this way, the embargo significantly limits Cubans’ access to products, partners and the means to climb out of poverty.

2. Agriculture

Like many developing countries across the world, Cuba has historically depended on agriculture as its main industry. Agricultural dependence often limits countries’ abilities to develop infrastructure and establish economic stability. Until the 1990s, the primary economic driver in Cuba was sugar. Because of this historical reliance on a single crop, Cuba has been ill-prepared to deal with changes in the global economy and to diversify beyond its agricultural roots.

3. Allies

For more than thirty years, Cuba was allied with the former Soviet Union. This relationship created special trading conditions which benefited the Cuban economy. Cuba traded sugar to the USSR for much-needed goods and economic support; but when the Soviet Union collapsed in 1991, Cuba experienced a 35 percent contraction of its GDP. In a country of only 11 million people, this financial crash was more extreme than the American Great Depression. Cuba has yet to fully recover from this economic blow.

4. Dependence

Cuba’s troubles with the USSR are part of a larger pattern of centralization. For the majority of the country’s history, Cuba depended on a single trading partner for over 90 percent of its foreign trade. Cuba’s exclusive relationship with first the U.S. and then the USSR caused big problems when these partners suddenly disappeared. Cuba also traditionally focused industrially on sugar production; this centralization further limits Cuba’s ability to find sources of revenue to meet the country’s needs.

5. Social Services

Cubans enjoy free health care and education, as well as subsidized housing and food rations. These social benefits form a safety net rare to the developing world and even many developed countries; but these social services come at a cost. Spending on social services can limit the amount of money available to the Cuban government and the Cuban people especially in times of economic crisis.

The causes of poverty in Cuba are similar to those in the rest of Latin America, but Cuba’s unique position also presents the country with some unique challenges. Still, thanks to Cuba’s vigorous social services, many Cubans can count themselves lucky compared to other impoverished nations.

– Bret Anne Serbin

Photo: Pixabay

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Progress Made on Reducing Poverty in Cuba

Poverty in CubaThe global financial crisis hurt first world nations as well as developing countries. As one example of this, poverty in Cuba has been affected. The country is doing better than some Latin American countries, but the government is struggling to maintain services such as free healthcare and education.

Cuba opened up its economy as a result of the global financial crisis, but it is worse off as a result. Fifteen percent of the population is living in poverty in Cuba. This most recent data is at least 10 years old, though, and more recent numbers are not available.

Because of the USSR’s collapse, Cuba was left to fend for itself. This has led to a restructuring of how goods and services are distributed. For example, instead of a universal food supply in the form of food stamps for everyone, Cuba is targeting the most vulnerable.

One problem Cuba faces is people living longer, despite the availability of junk food. It is estimated that the population of those over 65 in Cuba will double in the next 20 years. That will swell the number of people seeking healthcare as well as the costs associated as such.

About 40 percent of Cubans fall within the “middle class,” which is broadly defined, according to the Brookings Institute, but the average take-home pay for Cubans is $20 per month, or $0.66 per day, based on a 30-day month.

Despite this, 90 percent of Cubans own their own homes. Most Cubans can buy and sell property, open small businesses, have cell phones and form cooperatives both on and off farms.” President Raul Castro, who encourages the high ownership rate, is trying to “preserve socialism while introducing new market-based mechanisms,” according to Ted Piccone, a senior fellow at the Brooking Institute who specializes in International Order and Strategy and Latin American Initiatives.

Just as towns that concentrate and depend on one industry or business, with the risk of seeing that business close or fail, Cuba replaced dependence on the United States with dependence on the former USSR, only to see it fall. Castro inherited a Cuba that was dependent on sugar production, but with the deep socio-economic and racial scars of slavery. Some believe the revolution interrupted capitalistic growth, while others say it was “a precondition to resolving the contradictions obstructing development by ending Cuba’s subjugation to the needs of U.S. capitalism.”

Adding to the problem was Batista’s taking millions with him as he fled. This left Cuba without much of the money it needed to rebuild.

Despite the country’s economic problems, prices are kept low across the board, with some services still coming free, such as education and healthcare. Those who rent do not pay more than four percent of their income.  Cuba’s infant mortality rate is 4.5 per 1,000 live births, placing it among the rates in first-world countries, even ranking above the United States. The wealth indicators here are not necessarily material goods but instead are reflected in the quality of life. This quality does come at a price, though: Cuba’s infrastructure is in very poor shape.

Despite Cuba’s economic problems, its medical triumphs show how, despite the embargo by the United States, a country can survive if it looks for help elsewhere, and even become a leader. By investing in people and reaching out, poverty in Cuba and other countries like it can be reduced, and developing nations can make their mark on the world and life for its citizens better as time goes on.

– Gloria Diaz

Photo: Pixabay

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U.S.-Cuba Relations: A New Future for Cuba

US and Cuban Relations: A New Future for Cuba
After 54 years of severed diplomatic ties, the United States and Cuba, once bitter Cold War enemies, demonstrated their newfound diplomacy by reopening each other’s embassies this past Monday.

It is the most concrete example of the diplomatic thaw since President Obama and Cuban President Raul Castro announced last December that U.S.-Cuba relations would be restored.

In an interview with MSNBC, President Obama said he believed that Proclamation 3447, the embargo signed by President Kennedy in 1962, has served neither people well and that it was time to go in a new direction.

Although Congress has to pass legislation to formally end the embargo — something that will be very challenging to do — Obama is using his executive power to ease travel and trade restrictions.

For the first time in half a century, the United States is able to transparently see the type of living conditions Cubans have been in for the past 50 years.

There is poverty in Cuba, but it’s not traditional poverty. When Fidel Castro came to power in 1959, the government became Socialist and then reformed to become the Communist Party of Cuba. During this time, all aspects of Cuban society became nationalized. For the past 50 years, Cubans have enjoyed access to a free healthcare system that has produced a very healthy populace.

Today, Cuba ranks 61st in the world for life expectancy. Its citizens live roughly to the same age as their American counterparts. This statistic is even more surprising considering that per capita GDP is almost ten times higher in the United States than in Cuba.

Economists have coined this phenomenon the ‘Cuban Health Paradox.’ Normally, countries with low per capita GDPs also have low life expectancies.

Cubans also have access to free education and the government has tried to make housing and nutrition a priority for its citizens.

Based on government numbers, Cuba ranks 48th in the world for poverty. The island nation is one of the least impoverished countries in the developing world

Although 15 percent of the population still lives in extreme poverty, most of the country is poor. Reports of living conditions are less than ideal. The Cuban peso, which hasn’t been convertible since the revolution, has suffered from inflation. In U.S. dollars, the average Cuban worker earns $17 to $30 a month.

Cuba also scores at the bottom of Freedom House’s annual report on civil and political freedoms. Freedom House describes Cuba as ‘not free.’

Since the Castro family has been in power, Cuba has been relatively isolated. This has led to the country’s lack of overall wealth. The fall of the Soviet Union worsened matters as the country lost the financial support it used to have from Moscow.

The country has persisted; however, this has usually caused Cuba to become more self-reliant, therefore poorer.

Recently, Cuba has tried to reform its economic system to open up investment to other governments and private companies to accelerate development.

The United States re-establishing diplomatic relations with Cuba presents a great opportunity for this to happen. The United States can expand trade markets to one of its closest neighbors, while the influx of capital will raise living standards in Cuba.

– Kevin Meyers

Sources: Procon, Geoba, MSNBC, New York Times, Poverties, Reuters, Rural Poverty Portal
Photo: USA Today

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Poverty in Cuba

poverty in CubaThe largest island of the West Indies, Cuba, has often been scrutinized for its turbulent political history. A variety of factors have come into play to make the island nation one of the poorest countries in the world, with a significant portion of the population living in poverty. Such a statistic goes hand-in-hand with Cuba’s unfortunate reputation of struggling to provide housing, healthcare and other necessities. Here are the top five facts about how many people are adapting to living in poverty in Cuba.

1. Agriculture and Climate: Much of Cuba’s economy has heavily depended on the farming of specific crops such as sugarcane, one of the main export products used in trade. In addition, a significant portion of industrial work goes into processing much of these crops for commercial use, such as turning sugarcane into sugar crystals. In total, agriculture and industrial production of these goods make up nearly 30% of Cuba’s GDP. Unfortunately, this dependence on agriculture imposes limitations on Cuba’s ability to make great advances in infrastructure and maintain economic stability. The situation is only made worse due to the tropical climate and prevalence of hurricanes during the rainy season, which can cause widespread damage, suffering and loss of life. When Hurricane Irma struck in 2017, the cost of damages reached well over 13.6 billion pesos (more than $628 million). Over 7,400 acres of plantation farmland were destroyed, causing a brief food shortage and exacerbating poverty in Cuba.

2. The United States Embargo: After the rise of Fidel Castro in 1961, the United States placed an embargo that suddenly deprived Cuban exporters of a significant majority of their exports. Since that point, the embargo continues to restrict trade and access to American products. As a consequence, many people experience a lack of daily necessities from electronics to food. The embargo even includes sanctions against other nations trading with Cuba. The economic restrictions imposed by the embargo have disastrous consequences for those living in poverty in Cuba as they lack daily resources. As of now, there doesn’t seem to be any immediate action towards removing the embargo, but an increase in tourism (especially from Americans) can provide the first step in easing relations between the two countries.

3. Jobs and Employment: Cuba has a very low unemployment rate compared to other nations of similar economic standing, resting at 1.7%. However, a significant portion of working families in Cuba are at risk of income poverty, with an individual having a 41.7% chance of having income problems. These people work in jobs for an average salary lower than that of the national average. Given that the typical family consists of about three people, this results in nearly four million individuals who live in households at risk of income poverty. Moreover, the workforce of Cuba is further destabilized due to the rampant rise of an aging population. Over 20% of the Cuban population is above the age of 60, which also means that fertility rates are low due to these demographic imbalances. So for the average family living in poverty in Cuba, finding work can be difficult. On the bright side, charities like the Caribbean Movement Trust can aid such families in becoming more self-sufficient and maintaining a steady income through education, training and healthcare projects.

4. Housing and Energy: The Cuban government closely oversees transactions and logistics involving real estate and homeownership. It is incredibly difficult to change one’s place of residence as the government imposed a system of enforced home exchanges where homeownership is typically seen as collective ownership, which is controlled by the state. The situation is worse for those living in poverty in Cuba, as they cannot afford constant change and are often living without clean water, gas and electricity. However, international charities such as the Nextenergy Foundation are working toward providing renewable energy to contribute to poverty alleviation in many countries, including Cuba.

5. Healthcare and Education: Despite the many difficulties in their lives, Cubans are able to enjoy free health care and education at all levels. The government controls the distribution of goods such as foodstuffs and medications and has mandated that physical education and sports be integrated into Cuban education in order to promote healthy living. Even for those who live in poverty in Cuba, primary education for children between ages six and 11 is compulsory. As a result, a significant majority of the Cuban population is literate. In addition, women are guaranteed equal educational opportunities and account for more than half of all university graduates.

Cuba’s environment, trade restrictions and general lack of everyday necessities place many of its citizens in poverty. Thankfully, many organizations are working to spread awareness and to donate money and resources to those living in Cuba. Over time and through the efforts of many people, it is possible to speed up the process of development to help this country in need of aid.

– Aditya Daita
Photo: Pixabay

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Economic Reforms Increase Poverty in Cuba

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During the recent Community of Latin American and Caribbean States (CELAC) summit, Cuban president Raúl Castro expressed that Latin American and Caribbean leaders all have the ability and resources to end poverty, but merely lack the political willpower.

Approximately 26 percent of Cuba’s population is living in poverty, which is the equivalent of 11.2 million people. Over the last five years, Castro has made multiple changes in an attempt to better income gaps. But very few of these changes (such as allowing Cubans to work more than one job at a time) have made a positive impact on the economy and have actually increased poverty in Cuba.

Cuba had a thriving health care system not too long ago, but multiple hospitals and emergency clinics have recently been shut down due to scarce medicine and a reduction in government spending.

Cuba’s elderly population has been especially affected by Castro’s recent economic reforms. In terms of medical care, which is free, an increasing number of Cubans claim that in order to received proper attention they need to “give doctors under-the-table gifts.”

With the growing Cuban population aging 65 years and over, Cuba is on the verge of bankruptcy. The government cost to support health care is skyrocketing since the population of senior citizens is continuing to double.

On the 200 pesos ($8 per month) pension given to 1.6 million retirees, medicine can cost upwards of “70 pesos per month,” says Maximiliano Sánchez, a senior citizen, allowing him only “to survive, not to live.”

Sánchez explained that electricity costs him up to 40 pesos and his telephone costs him up to 20 pesos per month. With Fidel Castro’s 2005 energy reduction campaign, which forced residents to update old appliances to energy efficient ones, Sánchez now has to pay 65 pesos to the government each month. He states there is very little money left to spend on food.

Public education spending has also been reduced, but because much of the younger generation is leaving the country, there has not been a dramatic affect on the population. Without younger and physically capable people, however, Cuba does struggle with housing maintenance and hurricane damage repair. Although the birth rate is relatively low, providing housing for Cuba’s public has been difficult, and this contributes to poverty in Cuba and homelessness. Only about 21,000 houses were constructed in 2013, compared to the 111,400 erected in 2006.

– Becka Felcon

Sources: The Guardian, Poverties.org
Photo: Travel Adventures