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Cuba Under Castro, Post-Cold War Era

Cuban troops, Cuban pesos, capitalist countries, Cuban economy, trade embargo

In 1989 two events shook the foundations of Cuban society. The first involved a political scandal. The government charged General Arnaldo Ochoa Sanchez, a decorated hero and the architect of Cuban victories in Angola, with drug smuggling. Ochoa had been an advocate for Cuban troops returning from overseas, helping them find employment. His efforts had made him popular among Cuban troops and the second most important person in Cuba. Many Cubans suspected that Ochoa’s crime was his popularity and his potential to challenge Castro for power. After a brief trial, Ochoa was executed.

The second event was more far-reaching. It began in the USSR when political and economic reforms were implemented in the late 1980s. These reforms decreased centralized control of the Soviet economy and increased citizens’ ability to participate in government. The idea that socialism could exist with a less regulated economy and a more participatory government appealed to younger Cubans. In 1989 the USSR disintegrated into a number of smaller republics. Soviet premier Mikhail Gorbachev visited Cuba in early 1990 to warn the government that economic reforms were forthcoming and not to count on the $5.5 billion yearly subsidies that the USSR had previously provided Cuba. The news was devastating in Cuba, since 86.2 percent of foreign financial and economic relations were with the USSR and its allies.

The Cuban economy faltered during the mid-1980s and declined precipitously into 1993. Beginning in 1991, Cuba had to import sugar from Brazil and other Caribbean countries to fulfill its foreign trade commitments with the Eastern European countries. As a result, Cuba borrowed money from capitalist countries and amassed a significant debt, which it has not yet repaid. Like other debtor nations, Cuba has imposed severe austerity programs on the populace and diverted money from social programs to pay for the debt. In addition, the price of Cuba’s imports rose from 16 to 40 percent from 1989 to 1992, while the price of Cuba’s exports, namely sugar and nickel, dropped by 20 and 28 percent, respectively.

As U.S. president Bill Clinton took office in 1992, Castro sent word to Clinton through diplomatic channels that there was a potential to improve relations. Cuba, however, was not a high priority for Clinton, who announced that the United States would not normalize relations with any country that had abandoned democracy. In 1992 U.S. senator Robert Torricelli authored the Cuba Democracy Act, which extended the trade embargo beyond U.S. companies. The act penalized foreign subsidiaries of U.S. companies trading with Cuba, as well as other nations that engaged in commerce with the island. His intention was to topple Castro in a matter of months by extending the 30-year-old embargo to cut off all trade with the island.

The economic situation in Cuba became grave. Inflation spiraled as the Cuban peso lost ground against foreign currency. The even distribution of wealth, so fundamental to the revolution’s ideology, was dismantled when Castro allowed Cubans to possess and spend dollars in 1993. People employed in the tourism industry and those who received money from relatives living abroad greatly increased their buying power compared with those with Cuban pesos.

Social unrest rumbled under the surface of daily life. Blackouts caused by deficient oil supplies left families without electricity, sometimes for up to 20 days. Food shortages were common. Transportation difficulties added hours to short trips. Cuba’s public health system, which had been the best in Latin America for decades following the revolution, ran short of medicine, sheets for hospital beds, and food for patients.

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