The Cuban Economy

Cuba faced an economic meltdown of catastrophic proportions in the early 1990s when covert subsidies from the former Soviet Union disappeared. In mid-decade, the island republic's government instituted a number of reform policies, including economic decentralization, opening the economy to foreign investment, allowing limited small-scale private enterprise, legalization of the dollar as a currency, and the establishment of farmers' markets and agricultural quasi-cooperatives. These policies, designed to deal with the worst of the economic problems facing Cuba, have had inconsistent results. Opening the economy to foreign enterprise through joint ventures with state firms has been successful in key sections such as tourism, cigar marketing, and nickel, which now contribute large shares of export earnings. Basic educational and health services have been substantially maintained, and there has been some economic recuperation.