Castro�s Screw Up And Cuba's Economic Crisis

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accords signed with many countries including Colombia, Mexico, Spain and Venezuela.
Although Cuba's revolutionary leaders had intended to pursue a policy of economic diversification, they quickly had to abandon this approach. Instead, the government emphasized increased sugar production to garner essential foreign exchange earnings and Soviet subsidies. Sugar products represented 80% of Cuba's exports between 1920 and 1959 and amounted to 82% of total exports by 1986. Some 78% of Cuba's sugar production went to the former Soviet Union in barter trade with one percent kept for the domestic market and the remainder sold for hard currency on the world market. Bad idea!
Today Cuba is an anachronism, a small island of socialism in a hemisphere that has largely abandoned state-dominated economics, adopting market-based democracy as its path to prosperity, and is beginning to enjoy the fruits of investment and growth stemming from this transition. Still, Cuba remains one of the last ...

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60%, representing a contraction in GDP of over 25%. Most of the lost imports have been essential raw and intermediate materials, thereby severely depressing industrial production. Excess capacity in all sectors except agriculture and tourism is now estimated by local experts at more than 80%.
Because of the foreign exchange shortage, Cuba has been getting further into hock. Although official debt statistics have not been published since 1990, Cuba's external debt was estimated at $32 billion in 1991 and now hovers around the $35 billion mark. Worse yet, most of the debt is poorly structured, creating a tremendous drain on its limited resources and already depleted foreign exchange ...

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