The Five Main Causes of Poverty in Cuba

Overview

Cuba is an island nation with an economy under contention for decades. It struggles with poverty, affecting its ability to provide basic necessities like housing and transportation. The Borgen Project highlights five major causes contributing to poverty in Cuba.

Top 5 Causes of Poverty

1. U.S. Embargo

• Imposed in 1961 after Fidel Castro's rise to power.
• Abruptly deprived Cuban exporters of the recipient of 95% of their exports.
• Restricts access to American products, leading to shortages (food, electronics, internet access).
• Includes sanctions against other countries trading with Cuba, limiting economic opportunities.

2. Agriculture

• Historically reliant on agriculture, particularly sugar, as the main economic industry.
• Dependence on a single crop limits economic diversification and infrastructure development.
• Unprepared for global economic changes due to historical reliance on sugar.

3. Allies

• Formerly allied with the Soviet Union, which provided beneficial trading conditions.
• Traded sugar for goods and economic support.
• Collapse of the Soviet Union in 1991 led to a 35% contraction of Cuba's GDP.
• The economic crash was more severe than the American Great Depression, and recovery is ongoing.

4. Dependence

• Historical dependence on a single trading partner for over 90% of foreign trade.
• Centralized focus on sugar production limits economic adaptability.
• Exclusive relationships with the U.S. and USSR caused economic instability when those partners withdrew.

5. Social Services

• Free healthcare, education, subsidized housing, and food rations.
• These social benefits form a safety net rare in developing nations.
• Spending on social services limits government financial flexibility, especially in economic crises.

Conclusion

While the causes of poverty in Cuba mirror those in Latin America, unique challenges due to geopolitical and historical factors exacerbate them. Cuba's robust social services, however, provide a level of protection uncommon in many impoverished nations.

Author: Bret Anne Serbin Source: The Borgen Project (Published on August 29, 2017)