Cuba’s Economic Transition: A Cooperative Model
By admin November 15, 2016

Tags: , , ,


Cuba has long represented one of the greatest examples of healthcare system in the world, largely through providing critical access to services to all segments of its population and by achieving outstanding results comparable to those of developed nations. Overall, Cuba represents an inspiring model of development for its neighboring countries and for the rest of the Developing World. With a highly literate population – thanks to Castro’s literacy campaign that started in 1961- Cuba set a political standard, which always aimed to favor fairer distribution and the eradication of extreme poverty rather than a fast-growing creation of wealth for small elites.

Development successes have continued until today, along with their societal consequences. Firstly, the new wealthier generation began asking for higher living standards and, secondly, due to the cost of state-led development and investment, wealth had to find a different source of growth, which specifically implied a new ground for private sector development.

The capitalism of the West has dominated other forms of political stability for a long period of time while it has also demonstrated positive and negative realities. Indeed, Cuba’s development achievements shows a sustainable alternative, which, as every other state-model, has met many economic issues: especially, Cuba’s energy dependence from the Venezuelan regime and of course, the major influential roles that China and Russia play as creditors and investors in the Island.

An economic transition from a central planned economic structure to the free market does not represent the best choice for Cuba as many countries already proved the contingencies provoked by rising inequality and deprivation due to capitalism. Most importantly, Cuba has a lot to learn from eastern European countries since many of them transitioned from a socialist protectionist system to a capitalist free-market based system. The biggest lesson to learn is undoubtedly that economic shift needs institutional support. Therefore, Cuba has to build a solid institutional framework to counterbalance the social shocks that the free market entails.

History teaches that many protectionist countries such as Vietnam, for instance, were able to engage with the open free-market economy quite efficiently due to their long-term structural reforms and a central government heavily involved in every macro- and micro-economic policy. Following these examples, a Cuban government able to direct its economy towards an open but sustainable model will need strategic support and investments in innovation, education and infrastructure among others key sectors. The right investments as well as research and development will guarantee increasing state revenue and rapid expansion of those institutions in support of the transition, such as development banks and local financial organizations.

In the recent years, Cuba has been building an organizational framework that aims to raise living standards while also protecting social justice and equality. An example of this is visible in the agricultural sector where the government is shifting its centralized business cooperatives from state-owned to “non-state owned” – not private either – cooperatives, resulting in increasing productivity and output. In many other sectors, Cuba is beginning to adopt this cooperative model, transforming state-owned businesses into worker cooperatives.

However, there is still a long way ahead before Cuba will obtain those economic targets of a “development state”. Its political and economic decisions will play a fundamental role in this regard for both its success and for setting an example for the global South.

For more information:

Cuba: A development model that proved the doubters wrong

Cuba’s Health Care System: a model for the world

Will Cuba Be the World’s Next Leading Biotech Hub?

Cuba must shun capitalism and seek development solutions from within

Thanks for sharing !

Comments are disabled.