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NATIONAL LAW SCHOOL OF INDIA UNIVERSITY

BANGALORE

ECONOMICS II

Cuba - On a Sugar High

Submitted By:

Jinal Dadiya

ID No: 1816

I Year, B.A. LL.B. (Hons.)

Date of Submission:

25th August, 2010

Table of Contents

1. Table of contents 2

2. Introduction 3

3. Economic Situation in Present day Cuba 4

4. Cuba’s Twin Deficit 10

5. Fiscal Deficit in Cuba 11

6. Raul Castro’s policy 13

7. Conclusion 15

INTRODUCTION

Cuba is one of the few countries in the world that has sustained communism since its revolution till present times. It has survived the severe economic threats that Communist economies have faced, through the Cold War, economic embargoes, economic slowdowns, globalisation and other influences. Set in a world atmosphere of liberal free trade and market forces, Cuba manages to maintain a centrally planned, socialistic character without succumbing to the pressures that other Communist states like the erstwhile USSR have. At the same time, Cuba remains the one country that has been carrying on sustainable development and causes very little harm to the environmental, even as it satisfies the needs of its present generation. It is these stands of the country that have caught the researcher’s interests to the economy of Cuba. The extremist policies of Fidel Castro and his dream of creating a utopian Communist State in Cuba urge the researcher to try and understand how this was actually attempted to be created and whether the experiment succeeded. The situation the Cuban economy is in today is a definite result of the Socialist policies of transfer payments, and welfare measures that it employs. This policy has the inherent danger to the state having an unfavourable balance of accounts, internally as well as externally; and a deficit is a naturally conceived result of it. This works as a strong pressure on a socialist state, and often becomes a reason for it to move...