Economic Relations Between Cuba and the USA: A Comprehensive Analysis
Introduction
Since the early years of the 20th century, the economic relationship between the United States and Cuba has been marked by periods of cooperation and friction.
Historical Background
The economic ties between the USA and Cuba trace back to the aftermath of the Spanish-American War, when both nations signed the Treaty of Paris in 1898. By this agreement, Spain ceded Puerto Rico, the Philippines, and Guam to the USA, while Cuba remained a protectorate. However, only a brief period of occupation followed before Cuba gained independence. Despite this initial cooperation, economic relations have been strained over the decades due to political and social policies.
Exchange and Trade
There is a common belief that the United States could benefit from an economic exchange where the USA sends a portion of its population to Cuba in return for the population already residing in the USA. However, such a proposal is both impractical and unrealistic. Exchanging population sizes on this scale would have profound implications for immigration policies and social structures on both sides. Furthermore, the current economic landscape does not support such a drastic and immediate change.
Instead, a more feasible approach is to understand and leverage the existing trade and humanitarian relationships. The USA is a significant supplier of humanitarian goods to Cuba, including medicines and medical products. Total exports to Cuba in 2018 amounted to $275.9 million, with a notable mention being the value of remittances from the USA, estimated at $3.5 billion for 2017. These remittances play a crucial role in Cuba's state-controlled economy, reflecting the ongoing economic interdependence between the two nations.
Strained Relationships and Political Issues
While there have been efforts to ease travel restrictions and improve economic relations under different administrations, these efforts have often been met with challenges. For instance, during the Obama and Trump administrations, there were attempts to open diplomatic channels and ease travel restrictions. However, these efforts were often offset by political actions, such as Cuba's involvement in the Venezuela situation.
Cuba's actions in Venezuela, such as providing military support and safeguarding the dictatorship, have been viewed unfavorably by the USA. Furthermore, Russia (referred to as Putin's regime) supplied arms and training to Cuban installations, which strained US-Cuba relations. This continued opposition to the popular vote in Venezuela and the geopolitical tensions have kept Cuban delegates at a distance, indicating that there are still unresolved issues between the USA and Cuba.
Current Economic Trends
Today, Cuba relies on a variety of economic supports from the USA. The US government has gradually relaxed travel restrictions, allowing Americans to visit Cuba more freely. Despite these efforts, the embargo remains in place, limiting direct trade and investments. Nonetheless, the USA continues to import goods from Cuba, particularly in the areas of agriculture and tourism.
The Cuban economy remains largely state-controlled, with the government playing a significant role in setting prices and quotas. The lack of a transparent and robust private sector has made it challenging for the country to fully recover from economic shocks, such as natural disasters. However, the increasing number of small businesses and the arrival of foreign investments through businesses and tourism present promising opportunities for economic growth.
Conclusion
The economic relationship between the USA and Cuba is complex and multifaceted. It involves a mix of humanitarian support, trade, and political intricacies. While there have been efforts to improve relations, the legacy of historical events and ongoing geopolitical tensions continue to shape the economic landscape between these two nations. Moving forward, increased dialogue and cooperation can facilitate a healthier and more integrated economic relationship.