CUBAN TRANSITIONS

The moment we arrived at Varadero, Cuba, the tourist hotspot of Cuba, I was surprised to discover that such a place exists in the socialist country. Large five-star hotel resorts have been constructed throughout the peninsula since the Special Period where guests have access to clear blue ocean water, white sand, pools, open snack and drink bars, and air-conditioned rooms with cable television. The more we traveled across Cuba, the more it became apparent that Cuba has proved that it can develop without the need of U.S. capital and investment. Cuba has initiated joint ventures or projects with other countries to gather the funds necessary to construct, manage, and maintain hotel resorts across Varadero specifically and the nation in general. To some extent, it seems as though the U.S. embargo is a positive rather than negative aspect that affects the Cuban economy. The embargo has provided the opportunity for investments from other countries that do not wish to compete with the U.S. multinational hotel corporations. Thanks to the Cuban government’s attention to social justice, it ensures that such hotel resorts are owned by both the foreign company and the Cuban state. This allows the Cuban government to reap a significant portion of the revenues in the hotel industry to fund the ambitious social programs in healthcare, nutrition, education, housing, and social security. I believe this is a great alternative to the dominant free market model of economic development where wealth is transferred from developing host countries to developed countries.

The Cuban government has the right priorities when it takes advantage of the global capitalist system of investment and consumerism to directly benefit the poor population. All it takes is for the government to implement regulation of multinational corporations and foreign investment to utilize the revenue generated by such institutions and redirect it to the population who needs it the most. Supporters of neoliberalism claim that a developing country must not attempt to regulate multinational corporations and their investments as they run the risk of such institutions leaving to other host countries, thus contributing to high rates of unemployment and halting economic development. In Varadero, I have seen the exact opposite. Cuba is regulating the hotel industry and its foreign investment and foreign companies are still willing to conduct business in Varadero to reap some level of profit even if it is shared with the Cuban state. Cuba has ended all ties with the Unholy Trinity of the World Bank, World Trade Organization, and the International Monetary Fund and yet it seems to be doing quite well for a developing country without the “support” of these institutions. Perhaps this implies that these economic institutions are not helping the economies in developing countries, but rather are making the economic situation far worse by forcing developing countries to focus solely on the production of not-very-profitable products, eliminate social programs, and remove labor and environmental standards. The Cuban government has realized that it would have a greater degree of national sovereignty and freedom if it was not tied to the institutions that do not take into consideration the interests of the Cuban population. Overall, I am quite impressed with how the Cuban economy is a direct and concrete challenge to the dominant economic discourse. More Latin American countries should adopt a similar approach to developmental economics.