Economic System in Cuba

An economic system is a pattern of organization which is aimed at solving the three central questions. These questions are: What should be produced? How should it be produced? For whom should it be produced? There are four systems that can be implemented in a country to solve the central questions, traditional system, command system, market system and mixed system. The most popular systems are the market and mixed system, however, there are still some countries, although very few, that follow a communist command system and Cuba is one of those very few countries.

When Cuba was discovered in 1492, it was colonized by Spain. Then, in 1898, after the Spanish-American war, it was briefly under the administration of the United States, until 1902 when it became formally independent. After being under a dictatorship and suffering through corruption, political oppression and economic regulations, the country had developed into a single-party state under the revived Communist Party of Cuba, which still rules to date. Most of the enterprises in Cuba are run by the state and the government owns and runs most of the means of reduction of the country.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Majority of the labor force is employed by the state, but the formation of corporative and self-employment has been strongly encouraged in recent years by the Communist Party. Although it is a communist country, the government use socialist principles to organism the economy. About 83% of the workforce is employed by the state, with an additional 5% employed by cooperatives closely connected to the state. This means that only 12% of the entire workforce is employed in the private sector. The 12% is made up of private farmers, artists and only about 142 000 self-employed people (Cuba: Economy).

Low housing and transport costs, free education and health care, and food subsidies are all provided for the citizens of Cuba. Even though these benefits are provided, Cuba is one of the world’s most corrupt states, but at the same time, it is one of the least corrupt Latin- American states (Economy of Cuba). Before 1959, the gap between social classes in Cuba was very big, with a lot of peasants who could barely support their families with the small plot of land they had, and at the other end of the scale was the small mindful of people who owned sugar mills and could afford to live a life of luxury.

Once Cuba was no longer a colony, but under dictatorship, the social classes disappeared completely and everyone was seen as equal, except for the people who worked in the government, military and communist party. The social classes are starting to come back slowly but surely, however, as Cuba works towards becoming a more socialistic country. Running Cuba as a communist country has been successful in many ways, but it has also been unsuccessful in many ways too. The country’s iterate percentage is one of the highest in the world due to the fact that everyone received an education.

The economy, however, is very poor because for many years they relied on trade with the Soviet Union, but when that came to an end, they had to find different ways to keep their economy going. Somehow, even after an embargo by the United States, Cuba has managed to keep its economy afloat. It might not be a very successful economic system, but the command system seems to be working for Cuba and it doesn’t look like it will be changed drastically anytime soon. Economic System in Cuba By shakiness