Growing Pains: Political Economy in Cuba
Brandon Davis
One of the topics I am most interested in about Cuba is the economic easing or loosing of government control over the economy. Cuba now is allowing people to own business, restaurants and rent rooms. This is important because it is a step away from socialism and communism and towards a free market economy. Because Cubans live with so little and having to make due will less they are very innovate and creative. As the government lessens the restrictions on economic freedom this will no doubt be a boost to their economy.
Because of the restrictions on who can make, buy or sell products there is a large black market in Cuba for all types of goods. Black markets are natural externalities of such repressive regulations. Also extreme penalties for violating the laws are natural externalities from heavily regulated markets. I met a man who was down and crying over his friend. He spoke really good English and informed me that his friend sold black market cigars for extra money but was caught. The penalty his friend received was 5 years in jail. In America (not a leader in criminal justice by any means) only having a stolen firearm can carry an equivalent sentence.
The Cuban government is on the right path towards deregulating its economic market. But it is uncharted territory. Since the revolution, no Cubans have ever paid taxes. Therefore the government is faced with developing an effective tax system. To this day, the government is still wrestling with an effective taxing scheme. From my various conversations with people and business owners, I found out that the taxes are too high. Many private restaurants can only cater to tourists due to their high costs and must close down after tourist season. Because of the taxes the prices are so high that the average Cuban cannot afford to eat there.
I think that Cuban officials are on the right track to grow their country. Allowing the Cuban people to be who they are, creative and innovative, will only help the country as a whole to continue to survive and thrive. In addition, the world must acknowledge that the half a century of an American backed blockade is too much and must stop. The Cuban government is not perfect, but forcing people living in unnecessary hardship because of an executive order is not a humanitarian act. The United Nations unfortunately does not advocate vigorously enough for Cuban people. The U.S. should not be allowed to unilaterally isolate an entire country from the world over a failed coup. As Cubans attempt to ride their economic ship, the world should also recognize Cuban currency and reject the blockade for what it is—54 year old vendetta.
Brandon Davis
One of the topics I am most interested in about Cuba is the economic easing or loosing of government control over the economy. Cuba now is allowing people to own business, restaurants and rent rooms. This is important because it is a step away from socialism and communism and towards a free market economy. Because Cubans live with so little and having to make due will less they are very innovate and creative. As the government lessens the restrictions on economic freedom this will no doubt be a boost to their economy.
Because of the restrictions on who can make, buy or sell products there is a large black market in Cuba for all types of goods. Black markets are natural externalities of such repressive regulations. Also extreme penalties for violating the laws are natural externalities from heavily regulated markets. I met a man who was down and crying over his friend. He spoke really good English and informed me that his friend sold black market cigars for extra money but was caught. The penalty his friend received was 5 years in jail. In America (not a leader in criminal justice by any means) only having a stolen firearm can carry an equivalent sentence.
The Cuban government is on the right path towards deregulating its economic market. But it is uncharted territory. Since the revolution, no Cubans have ever paid taxes. Therefore the government is faced with developing an effective tax system. To this day, the government is still wrestling with an effective taxing scheme. From my various conversations with people and business owners, I found out that the taxes are too high. Many private restaurants can only cater to tourists due to their high costs and must close down after tourist season. Because of the taxes the prices are so high that the average Cuban cannot afford to eat there.
I think that Cuban officials are on the right track to grow their country. Allowing the Cuban people to be who they are, creative and innovative, will only help the country as a whole to continue to survive and thrive. In addition, the world must acknowledge that the half a century of an American backed blockade is too much and must stop. The Cuban government is not perfect, but forcing people living in unnecessary hardship because of an executive order is not a humanitarian act. The United Nations unfortunately does not advocate vigorously enough for Cuban people. The U.S. should not be allowed to unilaterally isolate an entire country from the world over a failed coup. As Cubans attempt to ride their economic ship, the world should also recognize Cuban currency and reject the blockade for what it is—54 year old vendetta.