Assessing Fidel Castro Strategies and Policies in Overcoming U.S – Cuba Trade Relation Issue in the Case of Trade Embargo by the U.S 1960 -1965

ASSESSING FIDEL CASTRO STRATEGIES AND POLICIES IN OVERCOMING U.S – CUBA TRADE RELATION ISSUE IN THE CASE OF TRADE EMBARGO BY THE U.S 1960 -1965

By: Devita Kania Prawira ID No. 016201100118

A thesis proposal presented to Faculty of Humanities President University In partial fulfillment of the requirements of Bachelor Degree in International Relation Concentration of Diplomacy Studies

2015

PANEL OF EXAMINER

APPROVAL SHEET

The panel of examiners declare that the thesis entitled “Assessing Fidel Castro Strategies and Policies in Overcoming U.S – Cuba Trade Relation Issue in the Case of Trade Embargo by the U.S 1960 – 1965” that was submitted by Devita Kania Prawira majoring in International Relation from the Faculty of Humanities was assessed and approved to have passed the Oral Examinations on (February 6th 2015)

Teuku Rezasyah, Ph.D Chair – Panel of Examiners

Witri Elvianti, MA Examiner

Dr. Endi Haryono, M,Si Advisor

DECLARATION OF ORIGINALITY

I declare that this thesis, entitled “Assessing Fidel Castro Strategies And Policies In Overcoming U.S – Cuba Trade Relation Issue In The Case Of Trade Embargo By The U.S 1960 -1965” is, to the best of my knowledge and belief, an original piece of work that has not been submitted, either in whole or in part, to another university to obtain a degree.

Cikarang, Indonesia, ______

______Devita Kania Prawira

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ABSTRACT

Title: Assessing Fidel Castro Strategies and Policies in Overcoming U.S – Cuba Trade Relation Issue in the Case of Trade Embargoes by the U.S (1960 – 1965)

Trade has become an interested topic of being discussed in international relation study. The trade role is considered as one of the important factors to determine a country growth. A little restriction could impact badly to the country’s development. In this issue, Cuba and United States have experiencing the turbulence relation especially related to their economy partnership. As the new leader of Cuba, Fidel Castro established significant strategies and policies that influence both countries economic relation. Since the strategies and policies disadvantages United States Corporation, they imposed trade embargoes to Cuba as the sanction. In this study, the historical background also provide as its influence to the establishment of the strategies and policies. For over years, United States role in Cuba’s economic was significant which means Fidel Castro’s role through his decision making was very important in dealing with the embargoes. In examining Castro strategies and policies, the writer uses qualitative method to gather all the data and historical materialism approach to support the analysis. The result of this research proves that Castro strategies and policies, that have the tendency to the socialist, are very significant and succeeded in overcoming/dealing with the impact of the embargoes.

Keywords: Socialism, Trade embargoes, Fidel Castro, Cuba, United States, Policies, Strategies

ABSTRAK

Isu perdagangan telah menjadi topik yang menarik untuk didiskusikan di dalam mata pelajaran hubungan internasional. Peran perdagangan memiliki salah satu faktor penting untuk menentukan pertumbuhan suatu negara. Pembatasan sekecil apapun bisa berdampak buruk terhadap pembangunan negara. Dalam masalah ini, Kuba dan Amerika Serikat telah mengalami pasang surut hubungan terutama berkaitan dengan kerjasama ekonomi dua negara tersebut. Sebagai pemimpin baru Kuba, Fidel Castro menetapkan strategi dan kebijakan yang mempengaruhi hubungan kedua Negara. Karena strategi dan kebijakan banyak merugikan perusahaan Amerika Serikat, Kuba dikenakan embargo perdagangan sebagai sanksi. Dalam penelitian ini latar belakang juga disediakan atas pengaruhnya ddalam pembentukkan strategi dan kebijakan. Selama bertahun-tahun, peran Amerika Serikat cukup signifikan didalam ekonomi Kuba yang berarti peran Fidel Castro melalui pengambilan keputusan sangatlah penting dalam menghadapi embargo. Dalam mengkaji strategi dan kebijakan Castro, penulis menggunakan metode kualitatif untuk mengumpulkan semua data dan menggunakan pendekatan historis materialisme untuk mendukung analisis. Hasil penelitian ini membuktikan bahwa strategi dan kebijakan Castro, yang memiliki kecenderungan terhadap sosialime, sangatlah signifikan dan berhasil dalam mengatasi dampak embargo.

Kata Kunci: Sosialisme, Embargo perdagangan, Cuba, Amerika Serikat, Kebijakan, Strategi

ACKNOWLEDGMENT

Giving such a wonderful opportunities and experiences in my entire life, I would like to express my highest gratitude first to, Allah SWT. Who always guided and helped me for every single step I take, until finally I have finished this thesis as the requirement to gain my degree. In finishing my thesis, I’m surrounded by many people who always support and help me a lot. Therefore I would like to express my gratitude to all of them in this page. I realize that I couldn’t reward all of their kindness during my thesis, but I always pray to God to repay the good things that they had gave me.

I would like to thank for my families, to my mom, Nila Novita; my grandmother, Rossy Agoes; my brother and sister, Rionaldi and Safira who always support and motivate me no matter what happen, in good and bad. Special thanks to my dad because even though he wasn’t here during my thesis, I know that he always pray for me and his life spirit motivate me more in completing my thesis. I wouldn’t be able to be what I am now if it’s not because all of them.

I would like to deliver my gratitude also for my great advisors; Mr. Endi Haryono and Ms. Witri Elvianti. I couldn’t thank enough for their support and willingness in helping me to complete my thesis. I know that they have always spending their time to read and then guiding me to right direction in the writing process. And I want them to know that I’m grateful to have them as my advisors.

Then, I would like to show my gratitude to others lectures in International Relation Faculty who provides an excellent education to the entire student. Various knowledge are well obtained during the university. To other lectures and all staffs in President University, I would like also to send my gratitude for their togetherness which provided comfortable place during my time as the student.

Last but not least, I would like to thank to all my friends in IR Family for their love, laugh, and share which make wonderful memories and experiences. Special thanks to Eka, Tiffany, and Bella who always accompany me since entering the university, in good and bad times. Finally I would like to express my gratitude to my previous internship place, PT. DBS Indonesia, which taught many unforgettable experiences.

Jakarta, 9 January 2015

Devita Kania Prawira

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TABLE OF CONTENTS

PANEL OF EXAMINER...... ii APPROVAL SHEET ...... ii DECLARATION OF ORIGINALITY ...... iii ABSTRACT ...... iv ABSTRAK...... v ACKNOWLEDGMENT ...... vi TABLE OF CONTENTS ...... viii List of Tables ...... x CHAPTER I INTRODUCTION ...... 1 1.1 Background of Study...... 1 1.2. Problem Identification ...... 7 1.3 Research Question ...... 9 1.4 Research Objectives ...... 9 1.5 Scope and limitation of the study assumption ...... 9 1.6 Thesis Outline ...... 10 1.7 Research Methodology ...... 11 1.7.1 Research Table ...... 12 1.7.2 Research Framework ...... 14 1.8 Literature Review ...... 14 1.9 Theoretical Framework ...... 17 CHAPTER II HISTORICAL BACKGROUND ...... 24 2.1 History of Cuba and United States Relation ...... 24 2.2.1. Cuba under Spain ...... 25 2.2.2. Post Spanish American War ...... 29 2.2.3. The Establishment of the Treaty of Reciprocity ...... 32 2.2.4. The Rising of Cuban Nationalism ...... 35 2.2.5. The Downturn of Cuban Economy ...... 37

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2.2.6. Cuba under Batista Regimes ...... 38 2.2 The Need of Socialism for Cuba ...... 40 2.3 U.S Embargoes ...... 42 2.4 Chapter Summary ...... 43 CHAPTER III U.S. EMBARGOES TO CUBA ...... 45 3.1 The Beginning of U.S. Embargo in 1960 ...... 47 3.2 United States Embargo in 1961 ...... 48 3.3 United States Embargo in 1963 ...... 50 3.4 The Impact of Trade Embargoes on Cuba ...... 53 3.4.1 The Economic Effects of the Embargo ...... 54 3.4.2 The Social Effects of the Embargo ...... 59 3.5 Chapter Summary ...... 61 CHAPTER IV FIDEL CASTRO STRATEGIES & POLICIES...... 62 4.1 Fidel Castro’s Policies and Strategies ...... 62 4.1.1 Instant Industrialization Strategy, 1961 – 1963 ...... 64 4.1.2 The Ten Million Ton Sugar Strategy, 1964-1970 ...... 66 4.1.3 Cuba Socialist Strategies & Policies ...... 68 4.1.3.1 Education & Social Services Policy ...... 69 4.1.3.2 Nationalization Policy ...... 73 4.1.3.3 Cuba Partnership with USSR and Socialist Countries ...... 75 4.1.4 Cuba’s Achievements ...... 78 4.2 An Analysis of Cuba’s History Development ...... 84 4.3 Fidel Castro Socialist Strategies and Policies Analysis ...... 85 4.4 Chapter Summary ...... 89 CHAPTER V CONCLUSION ...... 92 Bibliogaphy ...... 95

List of Tables

Table 1: State Ownership Shares in the Cuban Economy, 1959-1988 ...... 56

Table 2. Cuba’s Main Trade Partners, 1955-1990 ...... 57

Table 3: Major Economic Reforms ...... 63

Table 4: Cuban Merchandise Trade, 1958-1965 (millions of pesos) ...... 67

Table 5: Cuban Sugar and Quantities base on the agreement ...... 77

Table 6: Total Number of Person Taught During the Literacy Campaign ...... 80

Table 7: Total Number of Those Who Remained Illiterate ...... 81

Table 8: Cuban Cattle Production, 1960-1965 ...... 83

CHAPTER I INTRODUCTION

1.1 Background of Study

Trade is a key feature to the country’s economy growth and development. It provides countries the resources they do not have and provide economic welfare. In this globalization era, international trade becomes increasingly important to a country due to the many benefits that the country will get around the world. Based from economy watch, international trade is the exchange of services, goods, and capital among various countries and regions, without much hindrance.1 It is one of the important sources of revenue for all country across the globe. The international trade system is now growing and spreading fast, with the help of modern production, highly advanced transportation system, transnational corporations, and rapid industrialization.2

International trade is usually relevant to the concept of openness degree, showing the importance of a country’s international trade by economy openness indicators; hence, a high openness degree of an economy represents a high level of participation within the international interlocking of trade.3 Many benefits of international trade become the important factor that can influence a growth of a country in this globalization era. As we seen now, the strong international trade become an important measure for a country to determine their power to another country. The other benefit from trade is that it can reduce the poverty in one country.

1 Trade benefit, retrieved from http://www.economywatch.com/international-trade/benefit.html on October 4th,2014 at 9:46pm 2 Ibid 3 International Trade, retrieved from https://www.uclm.es on October 4th,2014 at 10.30pm

According to David Ricardo, a classical economist, explained how trade can benefit all parties such as individuals, companies, and countries involved in it, as long as goods are produced with different relative costs.4 He continued that the net benefits from such activity are called gains from trade. And this becomes one of the important points in the international trade.

According to the scholar5, there are three kinds of sanctions in the international trade, which are boycotts, embargoes, and financial sanction. A boycott is a restriction of imports of one or more goods from the target country while an embargo restricts exports of certain products to the target country. The prohibition on exports may be partial or complete. It is usually enforced by a system of export licenses and supporting measures. And finally, financial sanctions restrict or suspend lending and investing into target economy.

The economic, political, and social are the part that cannot be separated that playing a significant role in the international trade system. The restrictions to international trade would limit the nations to the services and goods that they needs and it would hamper the nation’s economic development. Usually the objectives of imposing trade embargo is to change the behavior of the target country’s regimes, individuals or groups in a direction which will improve the situation in that country.6

For nearly half a century, United States has imposed an economic, commercial, financial, embargo against Cuba.7 In the case between United States and Cuba, trade embargo is used as the weapon to enforce United States interest goals in Cuba.

“The embargo on Cuba is the most comprehensive set of US sanctions on any country, including the other countries

4 Trade benefit, retrieved from http://www.economywatch.com/international-trade/benefit.html on October 4th,2014 at 9:50pm 5 The Impact of International Economic Sanctions on Trade An empirical Analysis, retrieved from http://michau.nazwa.pl/ on November 10, 2014 at 10.17 am 6 Sanction, retrieved from https://www.gov.uk/sanctions-embargoes-and-restrictions on October 3,2014 at 3.40 pm 7 Retrieved from http://www.amnestyusa.org/ on October 3,2014 at 7.30 pm

designated by the US government to be state sponsors of terrorism”.

United States Government Accountability Office8

Through trade embargo, United States government has tried to isolate Cuba economically as an effort to undermine the regime and deprive its resources. United States government has also imposed restrictions on travel to that island on its own citizen. They tried to prohibit their citizen from trading, investing, or travelling to Cuba. As a foreign policy tool, the embargo really destabilized Castro’s regime by giving him a reason for the failures of his socialist leadership. Castro implementation in reform Cuba by nationalizing factories and plantation in an effort to end United States economic dominance, had ignited Americans reaction.

U.S – Cuba trade bilateral relation has become the main spotlight in the international news for over years. Fidel Castro or in full Fidel Alejandro Castro Ruz (Born August 13, 1926, Birán, Cuba) was a political leader of Cuba from 1959-2008. United States – Cuba relations was go back well before Fidel Castro regime. In 1898, at the end of the Spanish-American war, a defeated Spain signed the rights to its territories — including Cuba, Puerto Rico and Guam — over to the U.S., which subsequently granted Cuba its independence with the stipulation that the U.S. could intervene in the country's affairs if necessary.9

Prior to the revolution, United States used Cuba to serves their interest through intervene in the Cuban economics. In this time, McKinley promised to let the Cubans govern themselves after the Spanish-American war, but the dominant Republicans in the Congress had other ideas and were only willing to go along with the island’s self- rule if under it the US was allowed ―to veto any decision (the Cuban government)

8 Ibid 9 Retrieved from http://content.time.com/time/nation/article/0,8599,1891359,00.html on October 2,2014 at 9.50 pm

made‖.10The United States then established Platt Amendment in 1901, three years after US assisted Cuba to get their Independence. This federal law allowed United States to intervene Cuba if it’s necessary. Regardless of Cuban people, through this law, United States feel that they the right to intervene the country.

Before Fidel Castro ruled Cuba, Fulgencio Batista, has a full backing from the US, instituted a brutal police state that served the interests of capital and turned the island into a casino and brothel.11 His action such as corruption, didn’t pay attention to the social services, and violent action to maintain the order became Castro concerns. And Fidel Castro wanted to change it. He wanted to change it and learned that if it couldn’t happen politically then it would have to happen by force.

The U.S consumed most of Cuba’s exported sugar, tobacco, cacao, coffee, tropical fruits, and nuts; US exports in return were cereals, meats, manufactured goods, condensed milk, vegetable oils, cheese, and fuel as documented by Wakefield (1937). Cuba also exported iron ore. The US imported all of Cuba’s copper production, about a quarter of US copper imports.12The United States interventions become more appear when there was Spanish – American War happened and the U.S occupied the Cuba. The United States took the control in almost Cuba trade system and country’s economy. They reduced tariffs by 52%, reduced taxes, established a land market liberalizing the land tenure system, expanded railways and communications, and protected Cuban assets from international buyers. It was created Cuba sugar industry became more efficient but Cuba also became more dependent to it.

When Castro came to power, he has no interest either to United States government or to private business interest. It was showed by Fidel Castro treatments

10 Retrieved from http://www.globalresearch.ca/cuba-under-fidel-castro/3084 on October 2,2014 at 5.30 pm 11 Retrieved from http://www.globalresearch.ca/cuba-under-fidel-castro/3084 on October 2,2014 at 7.35 pm 12 Retrieved from http://www.auburn.edu/~thomph1/simcuba.pdf on October 4,2014 at 8.45 pm

which nationalizing US industries such as the public facility, executed land reform, closed the casinos that owned by the Mafia and tried to end the corruption. Fidel Castro intended to lead the country to become socialist state based which based on the principles of state-owned and the government has the control over the economy including the producing and distributing the goods. He did it and transformed the country from one controlled mostly by United States interest into one political system which most of the production are possessed and operated by the government.

At first Americans assumed that Fidel Castro charismatic leader would guide Cuba into democracy.13 But the perception immediately changed when the nation conducted a meeting with the Soviet Union and decided that the Soviet Union will purchase of Cuban sugar and purchase of Russian oil. Following the meeting, the Cuba entered into a trade agreement with the USSR and causing the United States to drastically limit the import of Cuban sugar into the nation.14 In response to that, Cuba then nationalized all remaining American properties, increased taxes on American import, negotiated an expanded trade agreement and loaned with the Soviets, caused the United States to freeze Cuban assets in America, a near-full trade embargo break all diplomatic relations with the country (Cuba).15 These conditions were the beginning of Cuba – United States trade disputes.

It was recorded that there was about $355 million of United States direct investment in Cuba in 1959. United States investment included most of the utilities, half the railways and almost half of the sugar refineries. The US also held significant portions of cattle, tobacco, timber, banking, oil, and mining assets. Claiming United States monopolies was a threat, Castro acquired over $4 billion of assets.16 The U.S in the other hand cut supplies of arms and economic assistance. Cuba then

13 Retrieved from http://www.writework.com/essay/causes-tension-between-cuba-and-united- states-and-bay-pigs on October 2,2014 at 10.03 pm 14 ibid 15 Retrieved from http://www.cfr.org/cuba/us-cuba-relations/p11113 on October 4,2014 at 7.30 pm 16 Retrieve from http://www.auburn.edu/~thomph1/simcuba.pdf on October 4, 2014 at 8.45 pm

strengthens their trade relation to Soviet Union and became dependent to Soviet aid and subsidies. The nationalization process itself had through a quite long process.

Nationalization measures had been included before in Cuba’s revolutionary project. They had actually been announced in Fidel Castro’s well known allegation – History Will Absolve Me -, when he spoke as his own defense attorney.17 The Nationalization process was marked with the establishing of the first Agrarian reform law in 1959. Cuba agrarian Reform Law affected Cuban and foreign land holders. After the enforcement of the 1959 Agrarian Reform Law, Cuba’s Revolutionary Government enacted different laws to complement its nationalization process, based on the constitutional principle which allowed compulsory expropriation to use nationalized properties for public benefit.18

As the effect of trade embargo, the economic downturn happened in Cuba and caused mass emigration. There were thousands of Cuba people seek politic asylum in foreign countries as a dissatisfy expression from Cuba people. Castro announced that they could leave the country for anyone who wanted and there were approximately 125.000 Cubans leave to foreign countries.19 In 1962, another sanction was given by the United States when the Kennedy administration decided to impose a full economic embargo on Cuba, whose economic infrastructure greatly depends on trade with United States. This of course caused huge impacts to the country. Food consumption decreased and there was no import for Americans cars.

Fidel Castro decision making had a great impact to the trade bilateral relation between these countries. Whatever people’s view about Fidel Castro leadership, it is clear that the achievements of Cuba under Fidel Castro for nearly 48 years have been

17 Retrieved from http://www.cubaheritage.org/subs.asp?lID=1&sID=7 on October 4, 2014 at 9.08 pm 18 ibid 19 Retrieved from http://content.time.com/time/nation/article/0,8599,1891359,00.html on October 5, 2014 at 7.05 pm

significant. He managed to do what’s best for his country in spite of the oppressive partial embargo came from the United States and its allied countries.

During this time, Castro repeatedly denied being a communist. If the United States intervention toward Cuba is to help its people achieve freedom and a better life, then the embargo has completely failed. The embargo effects make the people of Cuba worse. The effects had also impacted not only to Cuba itself but also impact to other countries which have close trade relation with Cuba. The embargo has failed to reach any political objectives of the United States. In fact it was only make Fidel Castro became spotlighted in international news. With no embargo, Castro wouldn’t have any publicity and Cuban people support. United States embargoes to Cuba have shown that, embargoes have failed to change the behavior of certain regimes.

1.2. Problem Identification

By the end of 1800s, Spain had lost all of its colonies except Cuba and Puerto Rico. There were many Cubans that fled to Florida and other regions around United States because they didn’t want to be ruled by the Spanish. As Cuba struggled with their independence, United States watched this as their opportunity to intervene the country. The United States had millions of dollar invested in Cuba and there were many United States citizens residence there. The US possesses beneficial trade relation with Cuba. Therefore it would be easy for United States to intervene the country.

In 1898, to help its citizen and businesses in Cuba, United States assisted in terms of military. It was also aim to help Cuba to get their country independence. This war was known as Spanish – American War. The war was declared by United States after the US warship was exploded and sank in Havana, Cuba. There were thousands of troop sent from United States to fight in Cuba. The war was lasted less than a year and then was over when Spain signed a peace treaty. In this treaty United States had

the right to control Cuba, Puerto Rico, the Philippine Island, and Guam. And this is when the United States intervene began.

Prior to Fidel Castro regimes, United States became a dominant actor in Cuba system including trade system. United States was able also to intervene the Cuba government regulations and policies if necessary. At this time, trade relation between both countries remains good. United States provides a lot of support in Cuba trade system. But this makes Cuba become more dependent to United States. Castro then tried to revolutionize the country. He began to change trade regulation and tried to nationalize foreign companies including United States. Castro also created trade agreement with the Soviet Union. US began to assume that Fidel Castro is a communist and decided to give trade embargo to Cuba.

There is no doubt that trade hold a significant influence to the development of a country. A little restriction could impact badly to the target country. United States trade embargo had made the people of Cuba deprived. United States even expand their sanction by restrict US foreign aid to countries that provide assistance to Cuba. United States clearly wanted to destabilize Fidel Castro leadership in Cuba. During his leadership, the tension from both countries was getting higher and hard to find any good resolution. Leadership plays a key role in transforming society or nation through their strategies and policies. Based on the issue in this thesis, strategies and policies that Castro made determined whether the country could survive or not in facing the embargoes.

To survive from external challenges, it would not only need proper strategies and policies but also the implementation of those policies that lead by the leader. Hence in this thesis, the writer tries to provide the strategies and policies, how it affects the country especially in overcoming the embargoes impacts. In this work, we can see whether the country succeed in overcoming the impact of embargoes through the establishment of Castro significant strategies and policies. This research is aim to examine and elaborate Fidel Castro strategies and policies direction to endure with

the embargoes. In here we also can see how far the strategies and policies influence the relation between two countries.

1.3 Research Question

 How did Castro policies and strategies overcome in situation that Cuba is technically under effective United States economic embargoes

1.4 Research Objectives

The writer came up with bringing the topic into discussion mainly to describe and enlighten the readers to a significant study focusing Fidel Castro strategies and policies to overcome the United States embargoes. In this thesis the writer tries to elaborate the case from the beginning of Fidel Castro leadership in Cuba and explain his strategies in dealing with the embargoes chronologically. The writer also tries to provide an explanation after the strategies and policies took place during the time period.

1.5 Scope and limitation of the study assumption

The issue discusses mostly about strategies and policies that Fidel Castro took during United States embargoes. Since the issue has a quite extensive coverage, the writer limits the study of this thesis as following limitation below:

a) This thesis discusses about the trade embargoes by United States during Fidel Castro regimes. Hence the writer is going to elaborate the strategies and policies in response to that matter. In here, the writer also describe and analyze about the history of both countries in term of economic, politic, and military which became the background of the establishment of Castro strategies and policies. b) This work provides an analysis about Fidel Castro regulations and policies under his regimes in the case of trade embargo. Since the trade embargo

happened many times, the writer is going to elaborate the embargo chronologically and the impacts to Cuba. c) This thesis proves that Fidel Castro strategies and policies have great influence to the tension of trade bilateral and overcoming United States embargoes. This issue becomes interesting because in the first years of Castro leadership he implemented significant policies that ignited the embargoes whereas United States became the biggest market of Cuba.

1.6 Thesis Outline

This thesis consists of five chapters and the outline can be seen as below explanation:

Chapter I: Introduction

Starts with the introduction part which comprises background of study, problem identification, research question, research objectives, scope and limitation of the study assumption. In this chapter, the writer identifies the background and the problem of this whole research.

Chapter II: Historical Background

It begins with discussion on United States and Cuba history that not only discus about economically but also politically and to some extent military. The aim of this chapter is to provide discussion about Fidel Castro leadership which further gives significant influenced on Fidel Castro decision making to overcome the trade issue in the case of United States embargoes against Cuba.

Chapter III: U.S. Embargo to Cuba 1960 - 1965

This chapter is divides into three sub-chapters. The first sub-chapter discusses about the United States embargoes during 1960 – 1965. In that period the embargoes was happened twice so the writer discuss it chronologically. The second sub-chapter

discuss about the impact on Cuba as the effect of United States embargoes. The impact itself is divided into two forms such as the impact on Cuba’s economically and the impact on Cuba social condition on Cuba. And the last is the chapter summary

Chapter IV: Fidel Castro’s Strategies in Facing U.S. Embargo

It focuses about the Fidel Castro’s strategies in facing United States embargoes. The writer also provides an analysis of Cuba’s development through their history. The chapter is divide into five sub-chapter that begin with Fidel Castro’s policies and strategies in overcoming United States embargoes, then continue to the analysis, and the last is chapter summary.

Chapter V: Conclusion

This chapter provides the conclusion part in order to conclude the entire discussion elaborated in the previous chapter. At the end, we will see that Fidel Castro, despite the radical movement, has made successfully in bring Cuba to become independent country and maintain the condition even in worse condition.

1.7 Research Methodology

This thesis will adapt Historical materialism method in order to analyze the variables that construct to the title, hence the discussion able to encompass the details of the topic. Historical materialism itself is a methodological approach to the study of society, economics, and history.20 This method is look for causes of development and changes in human society in the means by which humans collectively produce the necessities of life.21 Prior to the revolution, class struggle has already occurred in Cuba. This happened due to United States intervention within Cuba’s society as a result of capitalism system. Since this thesis is associates to the Cuba’s society

20 Historical materialism, retrieved from http://www.princeton.edu/ on January 17, 2015 at 9.15 pm 21 Ibid

development and look for the causes of it, the writer put historical materialism as the appropriate method to be used. Historical materialism also posits that the development occurs as a result of class struggle. Hence this method is associates and support with the theoretical framework that the writer uses.

In bringing the topic into discussion, this thesis will use qualitative method to gather all the data from primary sources coming from both Cuba’s and United States’ international mass media release, governmental websites, annual reports of both countries and several studies from various authors coming from international relations background to support the theoretical framework. Thus, by using qualitative method it can help us to interpret the data and collect the evidence that support historical materialism approach.

1.7.1 Research Table Chapter I Chapter II Chapter III Chapter IV Chapter v - Background - U.S-Cuba - U.S - An analysis Conclude of study economic, Embargoes of Castro the - Problem politically, - Embargoes policies & research Identification social, and to effects to the strategies coming Important - RQ some extent economic and using the from all Elements - Theoretical military social theoretical important Frameworks historical environmental framework element of background in Cuba each chapter www.pbs.org A history of www.amnesty Socialist Chapter http://news.bbc the Cuban usa.org economy I,II,III,IV .co.uk Revolution www.academi arm & A history of book a.edu strategy the Cuban www.cubanher http://michau. book Revolution itage.org najwa.pl/ www.philos Sources book http://usforeign ophybasics.c policy.about.co om\ m A theory of socialism & capitalism book

1.7.2 Research Framework

Cuba – US Socialist Marxism Historical Revolution Background

IR Cuba’s economy transform to Fidel Castro centrally Socialism US Embargoes Strategies & planned Policies socialist system

The above figure elaborates the flow and the variables the writer will further elaborate. Marxism theory will be used in analyzing and understanding Cuba’s society development that influence in forming Castro strategies and policies, through US – Cuba historical background . In here it becomes the influence aspects of Castro strategies and policies. The socialism theory will be used in analyzing Castro strategies and policies in overcoming United States embargoes impacts. Then from that analyzing we can see the outcomes that measure whether those strategies and policies were succeeded in overcoming the impacts as will answer the research question.

1.8 Literature Review

In this literature review section, the writer uses one of reliable sources comes from Aviva Chomsky (2010) with the tittle The History of Cuban Revolution. As explained before, the writer has already summarized and took some important points of this research. And this book will complete and support the explanation related to the thesis issue. The content of the book not only discuss about the history of Cuba revolution but also discuss about capitalism and socialism. Since this thesis is discuss about trade embargoes that has direct influenced to economic relation between

United States and Cuba, this book is in line with the writer theoretical framework. It is clear that strategies and policies that leader made took an important role in governing the country. This book also consists of trade relation between United States and Cuba which discuss in terms of economy, politic, and military.

Political independency and social justice were deeply rooted in Cuba revolutionary history. Some people argued that the Cuban revolution began in 1511 when Taino Indian Hatuey took up arms against the Spanish colonizers. His statue now becomes the symbol of the first rebel of America. It is clear that Cuban revolutionaries emphasize the anti-colonial struggle on the island leading up to 1959. As the new leaders analyzed their country’s situation, they began to develop and implement policies to develop their program. Cuban revolution itself is often related to the nature of economic development.

For this literature review, the writer concludes that is necessarily for us to know about the Cuban revolution history. The history of a country of course will influence the leaders action in order to make the country a better place. From the history the leader will learn and analyze the situation as the background of the leader action when they ruled the country. Therefore it is appropriate to discuss the history of Cuban revolution.

The second book that the writer uses is about Cuba as the politics of socialist revolution by Harvey F. Kline. This book will also complete and support the thesis explanation because this book provide about reforms that had been established by Fidel Castro. Not only that, this book is also providing some information about Cuba geography, political culture, history, revolution, and United States interest toward Cuba.

As the introduction section, Harvey F. Kline, slightly describe about Cuba’s geography. He stated that one of important feature of Cuba is its location. Located in the Northern part of the Caribbean Sea, it is only 90 miles from Florida Keys, close

to the Mississippi Delta, and in strategic position between the continental United States and Central America and the Panama Canal. Also, to other Latin American countries, Cuba is country with few geographic barriers causing problems of transportation and communication

In this book, Harvey F. Kline continued to explain that several economic policies show Cuba socialist nature. There are no old capitalist class such both foreign and domestic. Numbers of collective goods such as education and health care are equally share. But wage differential still exist to encourage the development of technicians and managerial personnel.

He added that, as any socialist society, there is a dominant ownership by the state. Cuba government itself controlled about 70 percent of landownership with the other 30 percent controlled by ANAP and INRA. In socialist characteristics, economic decisions tend to made by central planners. In the 1960s, after Castro ruled, the Cubans adopted highly centralized and radical mode in economic decision making.

Central planners fixed production targets in quantitative terms by setting desired goals and matching those with projected resources, without regard to profit or monetary calculations except for bookkeeping purposes (Kline, Cuba:the politics of Socialist Revolution). Therefore this system was perceived as one that would allow the most rapid radical transformation in Cuba.

Aside the reforms and policies that Castro made, the author is also explaining about foreign policy of Cuba under Castro. The basic foreign policy of Fidel Castro was to end Cuba dependencies on United States and for Cuba independence. In bipolar world like in 1960s, this policy meant to increased cooperation with the Soviet Union.

1.9 Theoretical Framework

To examine the influence of Castro strategies and policies in overcoming U.S embargoes impacts, this section is going to discuss about the theory that the writer uses (Marxism and socialism) in order to explain whether the socialist strategies and policies that Castro used, which constructed from Marxism theory, were succeeded in overcoming the impacts of embargoes.

Marxism

Marxism theory is political and economic philosophy in which the concept of class struggle plays a central role in understanding society’s allegedly inevitable development from bourgeois oppression under capitalism to a socialist and ultimately classless society.22 This theory was derived from Karl Marx and Friedrich Engels (1829 – 1895). The class struggle that happened by the proletariat must be the central element in social and historical change.23 In this study, the Marxism will become the principle/basic of socialism theory in explaining the main variable of the topic.

As United States intervention became the important factor that ignited the revolution, it is important to understand the historical background which formed Cuba’s society development. Thus we can see the development from the beginning of United States intervention and analyzing the aspects that ignited the revolution through Marxism theory.

According to Ted Trainer, Marx theory can be thought of as having offered of sets of ideas. Marx gave us a theory of society, i.e an explanation of how society works, of how and why history has unfolded, and especially an account of the nature of capitalism. Hence Marxism theory is uses in describing Cuba’s condition before the revolution to understand the problems and Cuba’s revolution directions.

22 Marxism, retrieved from http://www.thefreedictionary.com/ on January 15, 2014 at 8.20 pm 23 The Basic of Philosophy, retrieved from http://www.philosophybasics.com/ on January 15, 2014 at 9.45 pm

From above point we can see that understanding the problem through the history could lead to the directions of society today. The key point in understanding the society is to focus first on the mode of production. Marx believed that the economic situation, the system of production, is the most important aspect of all other society aspects.24 Hence a socialist revolution must occur with the ultimate goal of public ownership of the means of production, distribution, and exchange.25

The basic principle of Marxism theory involves a number or differing ―sub- perspective‖ that is tends to be a general agreement about the need to construct a capitalist society.26 In accordance to that, the writer summarize some of Marxist ideas that in line with the topic, as follows:

1) Marxist emphasized about the conflict of interest that happened between the bourgeoisie and the proletariat 2) Marxism is a political theory that one of the main concern is to expose the political and economic contradiction inherent with capitalism (for example, the fact that people co-operate to produce goods, a capitalist class appropriates these goods for its private profit) 3) Marxism is a philosophy history which has the basic explanation for how societies go through the process of change 4) According to Marx, Historical materialism was the ultimate driving forces that lead to revolution. 5) In Karl Marx’s view, the dynamic of capital would eventually impoverish the working class. Private ownership over the means of production and

24 Marxist theory, retrieved from https://socialsciences.arts.unsw.edu.au on January 15, 2014 at 10.00 pm 25 The Basic of Philosophy, retrieved from http://www.philosophybasics.com/ on January 15, 2014 at 10.20 pm 26 Marxism: Basic Principles, retrieved from http://www.sociology.org.uk/ on January 20, 2015 at 3.00 pm

distribution is seen as creating a dependence of non-owning classes on the ruling class, and ultimately as a source of restriction of human freedom27

Sources: Marxism: Basic principles28

Those basic principles will be used in this study to make better understanding in analyzing the Cuba’s society development that lead to socialist revolution. Those principles are also help in narrowing the analysis due to the comprehensive scope of the Marxism theory.

Socialism

Refer from the previous theoretical framework, Marx believed that mode of production is the key point to understand the society’s development that ignite socialist revolution. Therefore in this section, the writer uses socialism to examine and measure Castro revolutionary strategies and policies whether it succeeded in overcoming the embargoes impacts.

According to the British Dictionary, socialism is an economic theory or system in which themeans of production, distribution, and exchangeare owned by t he community collectively, usually through the state. It is characterized by production for use rather than profit, by equality of individual wealth, by the absence of competitive economic activity, and usually by government determination or investment, prices, and production level compare capitalism.

In general, socialism is an ideology whose defining condition is ownership of the means of production are owned by the government or collective and used to common needs. The means of production refers to the tools, technology, buildings,

27 The Marxist Critique of Capitalism, retrieved from www.boundless.com/ on January 20, 2015 at 8.00 am 28 Marxism: Basic Principles, retrieved from http://www.sociology.org.uk/ on January 20, 2015 at 9.00 am

and other materials used to make the goods or services in an economy.29 It could also refer to private corporations and ownership such as health care, public education, and education.

Socialism theory is relevant to this issue because during Castro leadership, he often established trade regulations and policies that based from government determination, equal distribution, and public ownership. Fidel Castro action in nationalizing foreign companies is one of the examples which reflected to the socialism theory because the means of production should be owned and controlled by the state. This becomes the basic of socialism theory. This action indeed influences the relation between United States and Cuba that caused the embargoes.

Similar with Marxism, Socialism is also associated with Karl Marx. He was the major theorist of the socialism tradition. He brought together in a powerful theoretical synthesis the key elements of the existing socialist critiques.30 Marx provided socialism as an economic critique of capitalism. It seemed to explain the ills of capitalism and the necessity for socialism at one and the same time.31

The socialists believe that is possible to make the transition from capitalism to socialism. The bulk of Marx’s scientific work was concerned with capitalism; he wrote little about the future socialist society.32 Marx stated about the ability of capitalism to develop the forces of production, eliminate medieval backwardness, promote technical progress, and bring to production better organization and greater concentration. He argued that this process takes place amid the exploitation of the proletariat. The accumulation of capital is accompanied by the increasing poverty of

29 Socialism. Boundless Sociology. Retrieved from www.boundless.com on November 17, 2014 at 8.52 pm 30 Socialism & Communism, retrieved from http://www.eolss.net/ on November 17, 2014 at 9.49 pm 31 Ibid 32 Kornai(1992), 18

the exploited class. In the end the process leads inevitably to a revolution: the power of the capitalist is overthrown and ―the expropriators expropriated‖.33

According to the Socialism book, these thought of Marx indicates that socialism will replace capitalism to improve the conditions for workers. The replacement will occur in places where the capitalist system of production has become an obstacle to the development of the forces of production but has also paved the way for a more highly developed system of production than itself by providing the material conditions for socialism. In Cuba itself there were still workers that starved during part of the year.

Marx also said that socialism is the transitional period between capitalism and communism. Hence, socialism and communism theories are similar. Socialism is considered as part of communism. They both attempt in eliminating private ownership, and believe that land, factories, and other economic resources should be government owned instead of privately owned. This theory of public ownership and 34 centralized planning are the main similarities. Under communism, the government controls the means of production and work together. The result is shared among the people based on their needs, rather than on their contribution to the work while socialism is distributed according to their contribution. Some people also argue that socialism is generally refers to economic system while communism generally refers to both economic system and political system. These become the difference between those two theories.

The depictions of socialism from Marx above are prominently describing Castro strategies and policies against the United States embargoes. From that we can see the outcomes and measure whether it could successfully manage the impacts of embargoes.

33 ibid 34 Socialism vs communism similarities, retrieved from https://socialismvscommunism3.wikispaces.com on November 17, 2014 at 10.57 pm

According to the other English scholar, Hans Hoppe, within the structures of socialism, he distinguished the left and right version. ―Conservative‖ socialism favors with high regulation, behavioral controls, protectionism, and nationalism while the "liberal" version tends more toward outright public ownership and redistribution.35 Hoppe continued that the consequences of socialism vary based on their degree and kind, but they have similarities: high costs, resource waste, low growth.36 In here the degree means the country adoption of socialism itself, whether they want to implement as a total or partial.

It is pointless to define precisely about socialism definition due to innumerable definition given by many parties. The nature and the form also have changing over time. Similarly under different circumstances and at different places the interpretation of socialism has varied.37 However despite of overlapping forms and diverse definition, socialism has certain features in common which characterize socialism theory. Thus these become the features that the writer uses in analyzing strategies and policies, such as (1) Emphasis on equality – Economic and Social Socialism developed as a reaction against the injustice and miseries of industrial capitalism.38 From that, the introduction of greater equality into economic relation has emerged. Since the 19th century, socialism concept aims to provide equal opportunities to all. Almost all socialist movement aspired to a human society.39According to the scholar, Laveleye, ―Every socialist doctrine aims to introduce more equality into social conditions‖. He continued that the significant inequalities could lead to socially unjustified, politically undesirable, and economically harmful. Therefore

35 Hans-Hermann Hoppe. A Theory of Socialism and Capitalism: Economics, Politics, and Ethics.1988 36 Ibid 37 What is socialism and what are its essential characteristic, retrieved from http://www.publishyourarticles.net/ on November 27, 2014 at 9.50 pm (Raul) 38 Ibid 39 Introduction to 19th century socialism, retrieved from http://public.wsu.edu/ on November 27, 2014 at 10.15 pm

socialism occurs with aims to introducing equality in the distribution in income, wealth, and opportunities. (2) Public ownership of the means of the production In socialism, it has public ownership of all the means of production and the distribution. Means that the government owned, controlled, and regulated all the means of public or collective ownership. According to the Marian approach under socialism, all lands; mines; mills; factories; the entire system of finance and trade, etc, would be nationalized.40 The means of production become social property that given equally to the people. According to this approach nationalization is essential to socialism theory. There’s also other opinion from other theorist about socialism that closely related to nationalization program. (3) State provide basic necessities of life Under socialism, the government is responsible for the basic need of the people such as education, health, and etc. in this system state need to provide the basic needs without any discrimination. (4) Planned Economy As the means of production and distribution are controlled by state or the government, economic planning is very important in socialism. With the establishment of social ownership of the principal means of production, the whole development of society is brought under conscious control.41 (5) Establishment of Classless Society Unlike capitalist economic system that differentiates living standards like upper, middle, and lower class, socialist economic system considered everyone as equal. Under socialism there’s only one class and it’s all equal. Automatically capitalist class does not exist as all the meant of production are owned by the state.

40 What is socialism and what are its essential characteristic, retrieved from http://www.publishyourarticles.net/ on November 27, 2014 at 9.50 ppm 41 ibid

CHAPTER II HISTORICAL BACKGROUND Cuba – United States economic relation has been established before Cuba got its independence. United States took an important role to the Cuban economy development. Beginning with illicit trade in the 1700s, the United States quickly became not only the primary market for exports from Cuba but also the primary source of imports into Cuba.42 Cuba gains its independence with the help of United States. Since then the relation between two countries continue to grow and strengthen. United States assisted in almost Cuban affairs, such as economically, militarily, and to some extent politically. Therefore in this chapter the writer wants to discuss about United States and Cuba history relation that not only focus on the economy side but also on the military and politic side.

By understanding the history relation between United States and Cuba, we can better understand about how this past relationship influence Fidel Castro strategies and policies, and also how its effect to the United States trade embargo. In this chapter we can see the simple relation from both countries that started from trade agreement, turns out became more complicated and led to the downfall of it.

2.1 History of Cuba and United States Relation

Cuba gained its independence after the war between Spain and United States. Since then Cuba – United States relation continued to grow and strengthen. The United States plays a significant role in both Cuban politics and Cuba economic. United States had a lot of investment in various filed. It assisted Cuba financially, militarily, and to some extent politically. Long ago, United States provided

42 Louis A. Pérez.Cuba and the United States: Ties of Singular Intimacy. Athens, GA: University of Georgia Press,1990, 1

weapons and training to Cuba to build their military power in the fight against communism.

According to Archibald Ritter, Professor in Carleton University, Cuba’s economy appeared to be more advanced compare to other countries in Latin America and Caribbean. From many indicators Cuba systems were relatively developed in 1958 such as infrastructure, education, and health system. However, Archibald continued, Cuba faced number economic problems. The most serious problems that Cuba faced were income mal-distribution and poverty. The high unemployment rate became the ultimate cause of the poverty. Even though Cuba got important benefits from the United States presence, there were also cost such as profit repatriation, decision-making in the US rather than in Cuba and cultural impacts.43 In this sub-chapter, the writer tries to elaborate the United States presence in Cuba since Cuba under Spain until the revolution began.

2.2.1. Cuba under Spain

United States and Cuba relation was started from trade agreement. With time, the relation became more complicated due to the politically and economically driven. These complications had also formed the relationship between both countries. The relationship began, based on the basic supply and demand to fulfill country’s need. During the Spanish occupation, traders in Cuba and the American colonies established illicit trading contracts to obtain commodities needed in the colonies as well as for colonists to avoid paying colonial taxes on the imports to Great Britain.44 Over time, trade between Cuba and the United States waxed and waned based on the whims of the Spanish government, the ability of Spain to stop smugglers, and the recognition of local Spanish officials in Cuba of the need

43 The Cuban Economy: Revolution, 1959-1990. 2010. Archibald R. M. Ritter 44 The United States and Cuba, retrieved from http://www.hpu.edu/CHSS/History/Ann_Marie_Holmes.pdf on October 14, 2014 at 4.25 pm

for trade with the colonies.45 By the late 1700s, sugar had replaced tobacco as Cuba’s main crop and by the mid-1800s Cuba produced 25 percent of the world’s sugar.46 For Cuba, United States became the biggest market due to a heavy consumer of sugar and the United States itself didn’t have a sugar industry to meet that demand. In the early 1800s, United States expanded their territory to the Louisiana and Florida. Under President Thomas Jefferson government, United States decided that it would be best for Cuba to remain stay under Spanish government control. The United States was as important to Cuban imports as it was for Cuban exports, especially in regards to sugar, and by 1818, with Cuba still under Spanish rule, trade agreements between Cuba companies and their United States counterparts began to replace the trade agreements traditionally held with Spain.47

In 1823, John Quincy Adams as United States secretary stated that Cuba offered multiple opportunities both commercial and politically and the United States should be concerned about that. He was suspicious that France was going to seized Cuba from Spain. He was also suspicious that Great Britain was planning to join Spain against France. Suspicious to those countries, Adams voiced his concerns to President James Monroe. Then President Monroe announced the Monroe doctrine on December, 1823. It stated that American continents were free and independent, were not to be considered subjects for future European colonization, and any attempt by a European power to extend their territory into the Americas would be considered a threat to American "peace and safety" and dealt with accordingly.48 In the next following years, it became the headline of United States policies in an attempt to occupy Cuba based on the

45 ibid 46 Henry Teller. The Sugar Industry and Reciprocity with Cuba, March 18, 1903. On October 14, 2014 at 4.36 pm 47 The United States and Cuba, retrieved from http://www.hpu.edu/CHSS/History/Ann_Marie_Holmes.pdf on October 14, 2014 at 7.53 pm 48 The United States and Cuba, retrieved from http://www.hpu.edu/CHSS/History/Ann_Marie_Holmes.pdf on October 15, 2014 at 12.26 am

fear that Cuba would be control by the European. For the American, the occupation itself was seen as a mission of liberation; annexation was not just an act of manifest destiny for the United States but also one of self-determination for Cubans.49

International sugar market collapsed in 1884 and resulted loss of revenue for Cuban industry. Knowing the opportunity, investors from United States came and invest their capital to re-build the sugar industry in Cuba. The result of the capital brought Cuban Sugar Industry to some improvements and modernization. Seeing this, Spanish government established a close relation with Cuba in an effort to take more control in Cuba. One of Spanish government efforts to control Cuba was that the Spanish government closed Cuba down to outside trade with another country including United States. Over the next decade, the Spanish government continued to control Cuba trade market depending on who was allied at that time. This situation continued to run, depend on the Spain’s political climate rather than on the Cuba needs.

In gaining its independence, Cuba experienced several violent conflicts such as the he ten year war of Cuban independence that happened in 1868 and conflict between in 1895. Conflict between Cuba nationalist and Spain was larger than any previous conflicts in Cuba and United States felt that the Spain couldn’t prevail against Cuba. On the other hand, the United States economy was in ruin because of the unstable situations in Cuba. The commerce in Cuba was in severe conditions and United States doubted that Cuba couldn’t restore their economy. The United States, which had many businessmen investment in Cuba, became concerned. They could not stand by watching American interest in Cuba suffer while Spain did nothing about it. Knowing that US had a lot of investment in Cuba, Spain government asked United States to help them bring peace in Cuba.

49 ibid

The Spanish government wanted the United States government to side with Spain to crush the hopes of the insurrectionists and trusted the United States would assist Spain in its endeavors by not supporting the Cubans.50 However the situation did not improve. In 1898, the United States sent the USS Maine on a mission to Cuba. The ship was prepared for to rescue United States citizen in Cuba who might be endangered by the conflict. On February 1898 the ship mysteriously blew up. United States blamed Spain as the cause of the blew up even no one really knows what caused the ship to explode. On April 11, 1898, President McKinley sent a resolution to Congress asking for declaration war on Spain. He stated that the damage in commerce productivity in Cuba could harm and threat American interest.

In that statement, McKinley didn’t mention about Cuban Independence or recognition of the Cuban Government. In response to that statement, prominent Cuban comments that they opposed any intervention which would not lead to Cuba Independence. They also add that any United States intervention based on McKinley’s statement would be viewed only as declaration of war by United States against the Cuban Revolutionists. As a result, in order to assure the world that it was fighting only for the good of Cuba and not for colonial gain, the US passed the Teller Amendment, which promised to make Cuba independent after the war was over.51 It stated that the United States "hereby disclaims any disposition of intention to exercise sovereignty, jurisdiction, or control over said island except for pacification thereof, and asserts its determination, when that is accomplished, to leave the government and control of the island to its people".52

50 ibid 51 Spanish American history, retrieved from http://www.sparknotes.com/history/american/spanishamerican/summary.html on October 15, 2014 at 7.12 pm 52 Teller Amendment, Retrieved from http://www.loc.gov/rr/hispanic .html on October 16, 2014 at 8.45 pm

Once declared, United States with Cuba fought the war against Spain. United States also invaded Guam, Puerto Rico, and other Spanish colonies. In October 1898, Spain and United States agreed to meet in Paris to finalize the terms to ending the conflict. The once-proud Spanish empire was virtually dissolved as the United States took over much of Spain's overseas holdings.53 The release of Cuba was provided in the article I and XVI of the treaty of Paris. It stated under article I that Spain relinquished all claims of sovereignty over and title to Cuba. And after Spain’s evacuation, the island could be occupied by the United States. Still under article I, United States would be responsible for any obligations that may result under international law based on United States occupation in Cuba. In article XVI stated that any obligation assumed under the treaty by the United States to Cuba would be limited only the time United States occupied Cuba. Once the occupation ended, the United States would then advise any government established on the island to assume the same obligation.54

2.2.2. Post Spanish American War

Headed by Governor General Leonard Wood, a military government was established and in February the evacuation of Spanish troops was complete. Under Wood leader, the troops began disarming the Cuban rebels as well as those who had been loyal to Spain. They were also providing aid to Cuban people, improving Cuba’s infrastructure, and setting up the Cuban government. In September 1900, the military government called for a convention to adopt a constitution outlining the relationship between the United States and Cuba and

53 Treaty of Paris, retrieved from http://www.history.com/this-day-in-history/treaty-of-paris-ends- spanish-american-war on October 15, 2014 at 9.22 pm 54 Treaty of Paris agreement, retrieved from http://avalon.law.yale.edu/19th_century/sp1898.asp#art1 on October 15, 2014 at 10.53 pm

providing for the election of a Cuban government to assume control of the island.55

The election was held twice, June and December. Before the election began, the United States examined the candidates first. They want to check whether the candidates were competent and qualified to control the Cuba. However, the members of Cuban Independence party, the Independintistas, succeed in defeating the majority of American backed candidates in June election. The Independintistas then won again in December election. Seeing this, General Wood, reported to the Senator Oliver Platt and informed that the result of the election was not suitable for the protection of American interest and for a stable Cuban government. As a result United States judged that the result of the election flawed.

Knowing the result of the election, United States Government felt that it was necessary to establish constitutional limitations which would allow the United States to intervene in order to protect American interests after independence. It was the United States obligation to Cuba to establish a Cuban government by the people of Cuba because that was promised by the United States. Therefore United States established the Platt Amendment.

United States didn’t grant Cuban independence after Cuba had agreed to the Platt Amendment which indirectly bind Cuba’ economic into America’s interest. The amendment stipulated that Cuba could not transfer land to any foreign power except the United States; that it could not acquire any foreign debt without U.S. approval; and it would allow American intervention in Cuban affairs whenever the U.S. thought it necessary.56 There were eight conditions that the Cuban

55 Dana G. Munro. The United States and the Caribbean Area. Boston: World Peace Foundation, 1934. Questia. 9 Dec. 2007 , 8 56 US Foreign Policy, retrieved from http://usforeignpolicy.about.com/od/backgroundhistory/a/U-S- Cuban-Relations-Remain-A-Complex-Problem.htm on October 15, 2014 at 11.49 pm

government had to agree with U.S before the removal of United States forces from the island and transfer of sovereignty would begin. Several of the articles in the Platt Amendment, are listed below:

 The government of Cuba may never enter into a treaty that will tend to reduce the independence of Cuba  The said (Cuban) government shall not assume any public debt that it cannot repay with ordinary revenues  United States may exercise the right to intervene for the maintenance of a government adequate for the protection of life, property, and individual liberty  Cuba shall sell or lease to the United States lands necessary for a coaling or naval stations (now, Guantanamo)  Cuba will include the foregoing provisions in a permanent treaty with the United States57

From several articles above we can see the United States purpose through establishing Platt Amendment was to help the United States in intervene the Cuban affairs. Under this Platt, the Cuban government was prohibited from entering into any international treaty that would compromise Cuban independence or allow foreign power to use the island for military purposes. The amendment also gave the United States a military base on the island. Finally the Platt Amendment required the Cuban government to make the Platt Amendment legally binding and embedded in the Cuba institution.

United States argued that the establishment of the Platt Amendment was the right thing to do in order to safeguard its significant commercial interests on the island in the wake of Spain’s inability to preserve law and order.58 They added that as United States military occupation has ended, they needed some method in

57 Platt Amendment, retrieved from on October 16, 2014 at 12.30 am 58 Platt Amendment, retrieved from https://history.state.gov/ on October 16, 2014 at 3.57 pm

maintaining their presence and order, since the United States had a lot of investment interest in the island at that time. By establishing the Platt Amendment into the Cuban institution, indirectly United States government was able to shape Cuban affairs without violating the teller Amendment.

Platt Amendment was presented in the late 1900s by General Leonard Wood. Many Cuba delegates refused to include it within their constitution because they realize that the amendment significantly will limit Cuban sovereignty. They believed that it would make Cuba even far away from its independence. They thought that the Platt was not acceptable because they modified Cuba sovereignty. But the United States government had another idea, they promised to Cuba with a trade treaty that would guarantee Cuban sugar to be exported to the Unites States market. Knowing their choices was between limited Cuba sovereignty or no sovereignty at all, Cuba accepts the Platt Amendment. After several failed attempts by the Cubans to reject or modify the terms of the Platt amendment, the Cuban Constitutional Convention finally succumbed to American pressure and ratified it on June 12, 1901, by a vote of 16 to 11.59 With the signed off of the Platt Amendment then the United States military occupation in Cuba officially ended on May 20, 1902, however the United States still maintained the control of Guantanamo Bay.

2.2.3. The Establishment of the Treaty of Reciprocity

The first governor of Cuba was Leonard Wood. He was a proponent of United States. Palma itself came in power during the 10 Years War of 1868 to 1878. He was a supporter of the Platt Amendment and his policies were in line with the American interest. He also thought that Cuba was not ready yet in governing themselves that could also protect the American interest.

59 ibid

On May 20, 1902 Leonard Wood handed over the control of Cuba to Palma.60 At that period, Cuba suffered a lack of trade money. The need to establish a treaty alliance and commerce between United States were highly important. He thought that it would help Cuba in the middle of economic crisis after the Spanish American War. Therefore Palma encouraged foreign investment and Cuba’s export.61In 1903 Cuba signed the reciprocity treaty which gave Cuban products, especially sugar, a special rate for to be imported to United States and gave selected American product a special rate to be exported to Cuba.

However, in the House of Representatives, many argued about this treaty. Representative John Williams of Mississippi for instance, felt that it was wrong for the Congress of 1903 to bind all other upcoming congresses to the duty of sugars from foreign countries, including Cuba.62 They concerned that it would take away American ability to produce sugar.

Despite of those opposing views, Roosevelt still pass the treaty and came into effect on December 27, 1903. The treaty gave Cuba more advantages in the American trade than any other country.63 As the elections of 1905 approached, political difficulties increased; corruption increased, tensions mounted, and accusing the administration of fraud.64 Palma declared that he supports to stop the rebellions, but he would be open to outside intervention. The main concern of the United States was the effect of the conflict on the sugar and tobacco crops.65 Then Palma stated that he could not stop the rebellion He made the decision to

60 Telegram from General Wood, Military Governor of Cuba, to the Adjutant General of the Army, May 20, 1902. FRUS 1902, 320. 61 Tomas Estrada Palma, retrieved from http://www.encyclopedia.com/ on October 17, 2014 at 1.03 pm 62 Ann-Marie Holmes, 23 63 Roosevelt, Theodore. “Message of the President of the United States Communicated to the Two Houses of Congress”. Washington: Government Printing Office, 1903. 64 TomaS Estrada Palma, retrieved from http://www.encyclopedia.com/ on October 17, 2014 at 10.14 pm 65 Telegram from Chargé Sleeper to the Secretary of State, September 4, 1906. FRUS 1906, Volume I, 467.

resign and turn the Government of Cuba over to whoever the United States designated as their representative.66

After Palma and his cabinet officially resigned on September 1906, United States sent William Howard Taft in an attempt to create peaceful situation. Two years later, United States issued a statement to Cuba which stated that internal issues within the country should set aside and focus to larger problem, international conflict. Since the United States relied heavily on Cuban sugar production, any effort to interfere in that production would be considered a hostile act and all those in rebellion with Cuba were ordered to restore their allegiance or the United States would regard them as enemies and deal with them accordingly.67

After the statement, President Menocal and Vice President Nunez, as country’s representative were sworn in and would serve the terms until 1921. In 1917, during World War 1, the price of sugar in international market increasingly jumped. This condition was also happened in the New York Market. The price reached to the highest point in the United States since the civil war. As a result, United States passed the lever act which gave the government power to control the production and manufacturing of foodstuffs. The United States government created food administration under Herbert Hoover. One of his duties was that to find a way to control the sugar market during the war. As Cuba became one of the biggest sources of sugar to all allied countries including United States, Hoover wanted to control of the sugar supply so that the United States could control the pricing and would not have to compete with allied countries for sugar supplies. Despite the willingness of Cuba to side with United States, this plan would eliminate Cuba’s bargaining power and disadvantage Cuba’s economy.

66 Telegram from Consul General Steinhart to the Secretary of State, September 13, 1906. FRUS 1906, Volume I, 477. 67 Department of State, May 15, 1917, FRUS 1917, 407.

The International Sugar Committee was created as Hoover’s proposed plan to United States and Great Britain. Hoover appointed Earl Babst as the head of committee. He was lower the price of sugar to 4.6 cents per pound plus the cost of freighting to New York.68 The Cuban sugar producers protested saying that it would negatively impact to Cuba. Cuban couldn’t afford to buy imported food from United States anymore. In order to buy wheat or coal, Cuba should get import licenses first from United States government. Once the Cuban sugar producers set the price as defined by the committee then the import licenses were granted. Since Spanish American War, United States businesses came to dominate in Cuba. Investments by American companies increased 536% between 1913 and 1928.69

2.2.4. The Rising of Cuban Nationalism

In 1921, Alfredo Zayas was elected as the next Cuba President. Cuba experienced difficult times situation during his leadership. Cuba was suffering a sharp recession from the decline in sugar prices following the end of World War I.70 Cuban sugar mills owner had to borrowed funds from the banks during the time the price of sugar was high. When the land value fell some Cuban producers forced to let the bank foreclose their land because of their debt on their land was greater than its market value. At that time, the bank also experienced severe financial conditions.

The government of Cuba was experience severe indebted not only because of the recession during World War 1 but also as the result of the past President. It was heavily in debt and had inadequate means to service the debt so it was

68 History Cuba and United States, retrieved from http://www.hpu.edu/CHSS/History/.pdf on October 18, 2014 at 1.43 pm 69 ibid 70 Alfredo Zayas leadership, retrieved from http://www.sjsu.edu/.htm on October 18, 2014 at 2.30 pm

virtually bankrupt.71 Knowing the Cuba economic situation, Zayas requested economic assistance to United States. He requested a loan of $50 million. Though Cuba was prohibited from assuming or contracting any public debt, United States decided to loan Cuba the money with certain conditions. United States considered Cuba recession because of Cuban congress and Cuban President to enact the budget. The Cuban government had to act all conditions or United States would intervene Cuba.

Cuba nationalism was rising in 1925 during President Machado period. He felt that Cuba’s economy was tied to United States market. Machado's campaign for national regeneration initially received wide support, he taxed American capital investments, initiated the construction of a 700-mile (1,127 km) central highway and promoted investments in tourism, industry and mining.72 Through his policies at that time, he recognized as the most important achievement for a Cuban politician. He manipulated the support from United States while defending Cuban sovereignty.

Machado also feels that the Platt Amendment was an embarrassment and Cuba deserves to be independent. Machado told to the Cubans his intents that the Platt Amendment no longer existed. In response to that, United States passed a bill to Cuban senate which stated any Cuban that infringes the Platt Amendment would face imprisonment. Even though Machado’s program were so "full of patriotism", but the general economic situation was not good for Cuba in the late 1920s, and Machado's attitude towards opposing points of view was arrogant and dictatorial.73

71 ibid 72 Gerardo Machado, retrieved from http://www.historyofcuba.com/ machado.htm on October 19, 2014 at 4.03 pm 73 ibid

2.2.5. The Downturn of Cuban Economy

Cuba experienced economic crisis again when Wall Street crash in October 1929. The battle over sugar tariffs happened again. United States response to protect American businesses in Cuba creating Cuba more suffered. The economic crisis caused sugar production in Cuba drop by 60 percent and Cuban export dropped by 80 percent.74By the end 1930, the situation became worse for Machado due to economic recession and strong opposition. Many businesses bankrupt and cause the high rate of unemployment. American banks loaned millions of dollars to Cuba and Machado to covers his personal debts.

Roosevelt sent Ambassador Summer Welles in order to resolve the economic crisis and political situation in Cuba. The United States government told that a shipload of relief would be sent to Cuba if Machado step down from Cuban official. But Machado continued to defy United States and called for Cubans to defend their homeland against United States. The Cuban military leaders recognized that they could not win the war and forced Machado to leave the office. Then on August 1933, Machado resigned from office and fled to Bahamas.

The downturn of Cuban economy was happened due to their dependencies with United States. Cuba’s economy was dominated by United States corporations’ monopolies. Thus the share of US firms was 90 per cent in the telephone and electric services, about 50 per cent in public services and 40 per cent in raw sugar.75 United States also became the biggest market for Cuba and most of Cuba’s sugar was exported with fixed and set price by the United States. The United Fruit Company and other Americans companies owned 1,2 million

74 Mark T. Gilderhus, The second century: U.S.--Latin American relations since 1889. Wilmington, DE: Scholarly Resources, Inc, 2000. 76 75 Cuba: Socialism and capitalism, retrieved from c/pubs/Cuba/cuapp1.html on January 17, 2015 at 7.50 pm

hectares of land.76 From that there were 42 % of the labor force were engaged in agriculture while other 20% were employed in the tourism.77 These conditions proved that Capitalist system in Cuba had not been able to carry out.

2.2.6. Cuba under Batista Regimes

On January 1934, President Mendieta was elected to be the next President of Cuba. Under President Mendieta, Fulgencio Batista served as Chief of Staff of the Army. There were some changes in the Platt Amendment during this time. This was happened because American believe that Platt Amendment caused problems as Cuban officials often used the Platt to push United States in intervening Cuba during conflicts for their own benefit. As a result, a new treaty was established and agreed to revoke the Platt Amendment. In the Treaty of 1934, the United States gave Cuba tariff benefits for sugar and Cuba gave United States concessions on duties, taxes, and a promise of no new restrictions on payments for goods.78

Replaced President Laredo Bru, Fulgencio Batista was elected as the new president in 1939. Under his leadership, he expanded trade with United States. He argued that he wanted to create social reform to benefit the labor. Batista continued to build up close relation with United States and introduced war taxes to help America in 1944. United States gave full back up for Batista because of his support to the capitalist system that in line with American interest. Batista developed an idea of a military alliance with United States. He thought that military assistance from United States would help to increase the effectiveness of Cuban military. United States agreed and signed series of agreements regarding to military cooperation. In 1944, Batista was replaced by Ramon Grau San

76 Cuba: The Crisis of State Capitalism, retrieved from http://www.isreview.org/ on January 17, 2015 at 7.40 pm 77 Ibid 78 History Cuba and United States, retrieved from http://www.hpu.edu/CHSS/History/.pdf on October 19, 2014 at 7.07 pm

Martin and went into voluntary exile in the Dominican Republic before moving to Daytona Beach, Florida.79 Batista won a seat in Cuban senate again in 1952.

After he came to power on March 1952, Batista directly put himself at the head of another military force. Batista’s rule was oppressive; Batista suspended the island’s constitution and established a one-party dictatorship with him as the leader.80 In 1950-54 the average per capita income in Delaware, the richest state in the United States of America, was $2,279, while in Cuba it was only $312, ie $6 a week.81 Infrastructures in rural area were bad, 54% didn’t had toilet at all. The high unemployment rate was happened in Batista regime also. Approximately 25% were unemployed. According to Castro, 700.000 workers and were unemployed, while another 500.000 were seasonal farm laborers who starved for part of the year.82 The child mortality rate was 60 out of 1000 birth, while life expectancy was 55%.83 Thirty-one percent of the population had no education at all; 29% had three years or less; 3.5% had some high school and only 1% percent had attended college.84 As we can here before the revolution, Cuba was a paradise for the rich – especially for Americans – but a nightmare for workers and peasants.85 In 1959, Castro finally succeeds in an attempt to overthrow Batista and replaced him as the new President of Cuba.

79 Fulgencio Batista, retrieved from http://www.historylearningsite.co.uk/fulgencio_batista.htm on October 19, 2014 at 9.15 pm 80 Ibid 81 Cuba: Socialism and Democracy, retrieved from http://www.socialistworld.net/ on January 17, 2015 at 5.20 pm 82 “History will absolve me,” speech reproduced in F. Castro and R. Debray, On trial (London: Lorrimer Publishing Ltd.,1976), p.200 83 F. Castro. Informe al Primer Congreso del Partido Comunista de Cuba (Barcelona, 1976) 84 Cuba: The Crisis of State Capitalism, retrieved from http://www.isreview.org/ on January 17, 2015 at 6.30 pm 85 Cuba: Socialism and Democracy, retrieved from http://www.isreview.org/ on January 17, 2015 at 6.45 pm

2.2 The Need of Socialism for Cuba

There is no continent in the world compare with Latin America in the amount of cultivable high – yield soil or in reserves of timber.86 As a part of Latin America, Cuba has abundance natural resources in the world. Cuba has biodiversity and unique natural resources. The island nation and its archipelagos support thousands of plant and animal species, many of which are endemic, making Cuba the most naturally diverse Caribbean nation.87 Not only that, Cuba has number of metal that important to industrial development such as cobalt, nickel, iron ore, copper, as well as petroleum and extensive arable land.

Latin America abundance of natural resources is necessary to make a country developed. But yet, the people in Latin America were relatively poor, including Cuba. The illiteracy rate was high, the average per capita and life expectancy was low too. Cuba was economically and socially dependent to United States. And this was continued to happen until Fidel Castro lead the country. After elaborate United States and Cuba history, this sub-chapter shows the need of socialism for Cuba in revolutionize the country. In here the writer tries to elaborate the mode of production that should be changed by Cuba in order to become developed and independent country. This was proposed by the experts and other sources. This also emphasize the important of mode of production that in line with the theoretical frameworks.

United States was intervene Cuba in almost Cuban affairs. Cuba is rich with natural resources but their people were poor. This happened because Cuba economy was controlled by United States monopoly. The wealth flowing from their natural resources was appropriated by United States monopoly corporations which have distorted these economies by their concentration on the extraction of profitable raw

86 Latin America and Underdevelopment, retrieved from http://monthlyreview.org/2003/10/01/latin-america-underdevelopment/ on November 2014 at 3.20 pm 87 Cuba: The Accidental Eden, retrieved from http://www.pbs.org/wnet/nature/cuba-the-accidental- eden-a-brief-environmental-history/5830/ on November 2014 at 3.22 pm

materials.88 United States domination did not give a real independence. Without genuine independence, Cuba will remain weak and will be difficult to arise as a free nation.

Despite the importance of political independence, economic independence is also important to be obtained. With economic independence, a country has the power to establish their own control over their own economic surplus for the planned economic development of the whole nation, involves those far – reaching social changes which spell revolution – and socialism.89 In the New York Times Magazine of Sunday, December 4, 1960, Senator Mike Mansfield addressed himself to ―The Basic Problem of Latin America‖. Below is what he proposed must be done by any Latin America nation that wished to develop:

(1) It must act, at once, to alleviate the most glaring inadequacies in diet, housing, and health from which tens of millions of people suffer. (2) It must improve agriculture by diversifying crops, broadening land ownership, expanding cultivable acreage and introducing modern agricultural techniques on a wide scale in order to increase production, particularly of food. (3) It must bring about the establishment of a steadily expanding range of industries. (4) It must wipe out illiteracy within a few years and provide adequate facilities to educate an ever – increasing number of highly trained technicians, specialists, and professionals to provide the whole range of modern services.

88 Socialism in Cuba. 1969. Leo Huberman / Paul M. Sweezy 89 Ibid. Pg 19

(5) It must end the relative isolation of the beachheads from the interiors and the parts of the interiors from one another by a vast enlargement of existing systems of transportation and communications90

Apparently, this recommendation had been recommended many years before. In different words but same meaning, it was prescribed for Cuba by the Foreign Policy Association in 1935, by the World Bank in1950, and by the United States Department of Commerce in 1956. But it was never being followed until the revolutionary government – Fidel Castro – came to power. After Fidel Castro ruled, he took revolutionize measure for making a healthy and independence nation. What a Senator Mansfield, the Foreign Policy Association, the World Bank, and the United States Department of Commerce said had to be done is being done – in socialist Cuba.91The prescription above can be achieved through the implementation of socialist strategies and policies. In here, mode of production has become the important aspect to be measured to achieve an independent Cuba without any intervention.

2.3 U.S Embargoes

For almost a decade, United States has imposed embargoes toward Cuba in order to overthrow Fidel Castro regimes.92 The embargoes were not only happened once but also repeatedly. The first embargo was happened in 1960 and United States extended it until 2000. However United States policies have been softening since Raul Castro, Fidel Castro’s brother, took the control and Barrack Obama became the United States President. Like his brother Raul Castro had also implemented significant economic reforms and remove travel restriction in order to strengthen Cuba’s international position.

90 Ibid A 91 Ibid B 92 U.S Embargoes, retrieved from http://www.state.gov/r/pa/ei/bgn/2886.htm on February 16, 2015 at 01.00 am

United States embargoes were occurred when Fidel Castro came to power. With seen the past relation between United States and Cuba, of course the embargoes had directly influenced Cuba especially in Cuba’s economic. In the first year of Castro leadership, he established the first agrarian law that disadvantages United States Company. Afterwards in 1960, Castro built economic partnership with Soviet Union which adds the tension between Cuba and United States. And that was the beginning of United States embargo and continued to extend during Castro leadership.

In 1961, United States approved Foreign Assistance Act that prohibits aid or assistance to all communist countries, including Cuba. United States government again extended the embargo which was Cuban Assets Controls Regulation. In 1991, when Soviet Union collapse, United States strengthen with establishing Cuba Democracy Act in 1992 and Helms-Burton Act in 1996.The embargoes itself more or less had definitely impact negatively on Cuba’s economic since United States had been the biggest market on Cuba’s export.

2.4 Chapter Summary

Since Fidel Castro took control Cuba in 1959, he became the symbol of Cuba Revolution. His anger toward Batista government, a corrupt ruler, eager him to transform the country. Fidel Castro was a young lawyer in Cuba when he launched his first attack in an attempt to overthrow Batista on 1953 . He was born in the family that had no political background. However he entered law school in the university and became interested in social justice since then.

As we can see in the sub-chapter explanation that Cuba long history was dominated by United States intervention, Fidel Castro want to liberate Cuba from foreign intervention. This goal had been voiced by many Cuban nationalist since the Spanish American War. United States owned almost Cuba’s sugar companies and land which became the ultimate source of living for Cuban. Capitalism occurs and

caused class struggle between the bourgeoisie and proletariat. United States gains more benefit than the worker.

Cuba’s economy showed many of the characteristics that associated with economic dependency and capitalism. United States investors controlled most of Cuba’s infrastructure such as telecommunication, electrical services, and half of the country’s railroads. United States intervention not only on Cuba’s economic but also politically, and militarily. The history of United States and Cuba had ignited the revolution to transform the country. Socialism became highly important for Cuba to achieve that.

CHAPTER III U.S. EMBARGOES TO CUBA

The Cuban revolution had ignited the inevitable conflict with the United States. The revolution had challenged United States domination for half of century in the island. After the revolution, United States government tried to manipulate and disrupt the new Cuban government, in particular in regard to threat United States investors in Cuba. Over the course of 1959, United States policymakers had attempted a tactics and methods to undermine and overthrow the revolution. One of the methods that United States applied in an attempt to undermine the revolution was the embargoes.

This chapter contains about the embargoes on the early period under Fidel Castro leadership (1960 – 1965). During that period, United States imposed two embargoes to Cuba. This was in response to Cuba Nationalization of foreign businesses that majority owned by United States. The first embargo happened in 1960. Since then, United States extended the scope of the embargo to Cuba. In here, the embargoes will be analyzed based on resources gathered by the writer. The chapter then explains further about the impacts of the embargoes on Cuba that not only affected the economic situation but also affected to the social and environmental development in Cuba. Below is the timeline that consist of United States embargoes regulations during Fidel Castro leadership, as follow:

U.S. Embargoes Regulations Year Foreign Assistance Act 1961 Cuba Assets Control Regulations 1963 Cuban Democracy Act / Torricelli Act 1992 Cuban Liberty and Democratic Solidarity Act 1996 The Trade Sanctions Reform and Export 2000 Enhancement Act

From: http://www.amnestyusa.org/

Before explaining further about the embargoes, the writer would like to elaborate first about the United States concerns in establishing the embargoes. According to Margaret Daly Hayes (1984, page 104), United States concern over Cuban foreign policy activities responds to a reverse order of concerns; that is, it is Cuba’s support of revolution, its influence over the revolutionary left, and its influence over other governments, as well as its close relationship with the Soviet Union, that are of concern to the United States. There are a number of reasons for such concerns:

 Cuban activism in other world regions threatens United States interest in those regions and increases opportunities for more direct confrontation between the United States and the Soviet Union.  Cuban activism in support of revolutionary tendencies in the hemisphere contributes to instability in a region of vital United States interest and directly threatens United States interest in democratic regimes in the region.  Cuba provides a base of operations for Soviet fishing, naval, satellite, and communications intelligence operations and other activities that reduce United States freedom of movement in its southern flank region and that make defense preparedness in the region more costly.93

The United States concerns were reasonable because Cuba took an active role in supporting oppositions to government in Latin America in the early 1960s. Because of its support for revolutionary movement in the hemisphere, nearly every country but Mexico had broken diplomatic relations with Cuba by 1965.94 Cuba actively sought to bring about the overthrow of the Betancourt and Leoni governments in Venezuela, supporting a guerilla movement that was not quashed until well into the decade; relation with right-wing governments in both Nicaragua and Guatemala were

93 Hayes. Latin America and the US Interest.1984 94 Ibid A

colored by those governments’ support for the Bay of Pigs invasion in 1961.95 One of the Cuba’s famous actions in promoting revolution in the hemisphere was in Che Guevara’s effort to lead a revolution in Bolivia.

3.1 The Beginning of U.S. Embargo in 1960

For almost half a century, the United States has tried to isolate Cuba economically. During Fidel Castro leadership the embargoes had been broadened in Cuba economic situation. Before he rule Cuba, United States imposed embargoes against foreign nations under Trading With the Enemy Act of 1917, section 5(b) which stated ―prohibiting, limiting or regulating trade and financial transactions with hostile countries in times of war‖.96 Based on the provision, President Eisenhower imposed this sanction to Cuba as the effect of Castro policies which disadvantaging United States Company.

The TWEA prohibits any type of trade or financial transaction, including those related to travel, transportation or business, in times of war or when a national emergency has been declared in relation to a specific country.97 Automatically, these prohibitions imposed to Cuba later on after the establishment of Castro’s policies. These provisions were imposed to all hostile countries but not specifically to Cuba.

In the first year of Castro’s leadership, he decided to create a trade agreement with the Soviet Union. Under the trade Soviet Union agreed to buy sugar and other items from Cuba and to supply Cuba with crude oil. In response to that United States oil firm in Cuba stop refining oil purchased from USSR; Cuba nationalizes

95 Ibid B 96 The US Embargoes Against Cuba, retrieved from http://www.amnestyusa.org/ on October 23, 2014 at 2.46 pm 97 TWEA, retrieved from http://www.treasury.gov/resource-center/sanctions/Documents/twea.pdf on October 23, 2014 at 3.00 pm

refineries; President Dwight D. Eisenhower cancels most of Cuban sugar quota (prior to 1960, sales to US were 3 million tons annually, half of Cuban crop).98

Cuba then expropriates all US property, valued at about $1 billion, discriminates against imports of US products.99 On October 1960 United States imposed embargo on export to Cuba (except medicine and food) including reduces Cuban sugar quota in United States market, and also blacklist vessels carrying cargo to and from Cuba.

3.2 United States Embargo in 1961

In 1961, the United States Congress approved the Foreign Assistance Act.100 It prohibits aid or assistance to all communist countries, including Cuba, as United States assumed Cuba as communist country. The sanction was also applied to countries that gave assistance to Cuba and the United States President would give an authorized to create total embargo upon all trade to Cuba. In this period, diplomatic relation between Cuba and United States are severed and United States restrict travel to Cuba.

As the relation between two countries heats up, United States launched the Bay of Pigs invasion. It begins when a CIA – trained former member of Castro’s government – lands in Cuba in an attempt to overthrow the communist government of Fidel Castro. This program had already planned in 1960 under President Eisenhower leadership. It started on April 1961, 1.200 exiles which armed with American weapons, landed at Bay of Pigs in Cuba. The hope was that the exile force would serve as a rallying point for the Cuban citizenry, who would rise up and

98 Case Study in Economic Sanctions and Terrorism, retrieved from http://www.iie.com/publications/papers/sanctions-cuba-60-3.pdf on October 23, 2014 at4.09 pm 99 ibid 100 Foreign Assistance Act, retrieved from http://legcounsel.house.gov/Comps/Foreign on February 15, 2015 at 12.15 pm

overthrow Castro's government.101 The plan failed when the landing force met with unexpectedly rapid counterattacks from Castro's military.102 The Cuba victory over the invaders at the beach was call as ―the first defeated of imperialism in Latin America‖ by Cuba.

In 1962, occurred several changes on United States restrictions to Cuba. On February, acting under Foreign Assistance Act, President Kennedy suspended all trade with Cuba. He broadens the embargo on Cuba by prohibiting the ―importation into the United States of all goods of Cuban origin and goods imported from or through Cuba‖ and ―all exports from the United States to Cuba‖.103 On March, President Kennedy again expand the Cuban embargo include import of all goods that containing Cuban materials, even if made from other countries. United States Congress then passed the Foreign Assistance amendment on August that prohibits aid to any country that provides assistance to Cuba.

The United States embargo became tense during the Cuban Missiles Crisis. It began in October when United States spy secretly photographed nuclear missiles sites that being built by Soviet Union in Cuba just 90 miles from United States shores. President Kennedy discovered that and notified the missiles to the Americans, explained his decisions to enact a naval blockade around Cuba. This was aim to prevent the Soviets from bringing military supplies to that area. He added that the United States was prepared to use military forces if necessary to neutralize the situation that could become a threat to United States national security.

However, the disaster was avoided when the U.S. agreed to Soviet leader Nikita Khrushchev’s (1894-1971) offer to remove the Cuban missiles in exchange for the

101 The Bay of Pigs invasion, retrieved from http://www.history.com/this-day-in-history/the-bay-of- pigs-invasion-begins on October 24, 2014 at 2.04 pm 102 ibid 103 Embargo on All Trade With Cuba, retrieved from, http://www.presidency.ucsb.edu/ws/?pid=58824 on October 24, 2014 at 2.19 pm

United States promising not to invade Cuba and Kennedy also secretly agreed to remove United States missiles from Turkey.104 Even though United States agreed to not invade Cuba, they continued to impose the embargoes by forced all Latin Americans Government and NATO countries to tighten the economic embargo against Cuba. United States tried to ―quarantine‖ Cuba from economic assistance.

3.3 United States Embargo in 1963

In 1963, the United States government established another embargoes which was Cuban Assets Controls Regulation (CACR) under section 5(b) of the Trading with the Enemy Act of 1917. The stated goal of the sanctions was to ―isolate the Cuban government economically and deprive it of U.S. dollars‖.105The sanctions froze all Cuban assets in the USA and mandated the US Treasury Department to regulate all commercial transactions with Cuba, including authorized travel to Cuba by US nationals.106 It was estimated that United States freezes all Cuban assets in the United States about $33 million. All transaction related to travel to Cuba were also restricted therefore the freedom of movement between the United States and Cuba had been limited.

The transactions include food, hotel accommodation, and transportation. The CACR has been modified over the last four decades; travel restrictions were eased under the presidency of Jimmy Carter and then tightened again under the presidency of George W. Bush.107 Beside the prohibited export of United States products, services, and technology to Cuba, the provisions also provide regulation for criminal

104 Cuban missiles crisis, retrieved from http://www.history.com/topics/cold-war on October 25, 2014 at 11.30 am 105 US Department of the Treasury, Office of Foreign Assets Control, What you need to know about the US embargo, retrieved from http://www.treas.gov/offices/enforcement/ofac/programs/cuba/cuba.pdf on October 26, 2014 at 10.04 pm 106 ibid 107 The US Embargo against Cuba, retrieved from http://www.amnestyusa.org/pdfs/amr250072009eng.pdf on October 26, 2014 at 11.03 pm

penalties for those who violate the provisions. The penalties was applied differently, for corporate the fines up to US$1 million, for individual the fines up to US$250,000, and 10 years in prison. In July, under United States pressure, NATO countries finally agree to embargo military item except economic trade with Cuba.

Issued by the United States Government on July 1953, CACR was established because of unfriendly action from the Cuban Government. The Cuban Assets Control Regulation applies to all American citizens. This includes all U.S. citizens and permanent residents, whether at home or abroad; all persons located or living within the United States; and any branch of any U.S. government organization located anywhere in the world.108

To be more specific, this provision prohibits transactions that involving property, exporting to Cuba, importing Cuban-origin goods or services, vessel engaged trade with Cuba, and transaction involving Cuban nationals. Under the regulation of transaction property, it prohibits any person subject to U.S. jurisdiction from dealing in any property in which Cuba or a Cuban national has or has had any interest.109 The word of ―property‖ in here was very broadly defined and includes such things contracts and services.

For example persons subject to U.S. jurisdiction (including U.S. overseas subsidiaries) may not purchase Cuban cigars in third countries; may not sign a contract with a foreign firm if the contract terms include Cuba-related provisions, even if those provisions are contingent upon the lifting of the embargo; and may not

108 Cuba Control Assets Regulation, retrieved from http://ofaclawyer.net/ on October 27, 2014 at 4.18 pm 109 What you need to know about US Embargoes against Cuba, retrieved from http://www.treasury.gov/resource-center/sanctions/Programs/ on October 27, 2014 at 5.44 pm

provide accounting, marketing, sales, or insurance services to a Cuban company or to a foreign company with respect to the foreign company’s Cuba-related business.110

With certain exceptions, exporting to Cuba was also prohibited. No products, technology, or services was allowed for United States to be exported to Cuba, either directly or through third countries. The other prohibition under this provision was about the vessel that carrying goods or passengers from and to Cuba, and they may not enter the United States port. Similar thing also applied for those vessels carrying goods that related to Cuba or a Cuban national has any interest. Any vessels that enter to United States port for only to take fuel and supplies was also prohibit.

The next regulation was about importing Cuban origin goods and services. It was stated about specific prohibition on importing and dealing in merchandise that is of Cuban origin, that has been derived from Cuba- origin materials, or that has been located or transported through Cuba.111 The last regulation of trade transaction was relating to Cuban nationals. The regulation forbids transaction involving Cuban nationals wherever they are located. However there are no restrictions for those Cuban national that have become permanents residents or citizens of United States.

Still in 1963, the Foreign Assistance Act was amended to prohibit United States aid to countries that continue to trade with Cuba.112 The restriction on the travel to Cuba became loose after the assassination of President John F. Kennedy on December 1963. It was proposed by Robert F. Kennedy, United States Attorney General, which refers the ban inconsistent and hard to enforce. However the ban still continued to enforce due to rejection in the State Department meeting.

110 Ibid A 111 Ibid B 112 United States Economic Embargoes, retrieved from http://www.historyofcuba.com/history/funfacts.htm on October 26, 2014 at 11.54 pm

The export of food and medicine was allowed by the United States Department of Commerce to Cuba in 1963 but the license was revoked in 1964. The Organization of American States (OAS) calls for mandatory sanctions covering all trade except food, medicine, and severing of diplomatic relation. OAS which mostly consist of Latin American countries, finally agreed in 1964 to adopt the mandatory sanctions due to the discovery of arms cache in Venezuela. All the members comply the mandatory except Mexico.

Even though United States always imposed the embargoes against Cuba in an attempt to overthrow Castro’s regimes, United States still trades with Soviet Union. They argued that the Soviet Government is a permanent while the United States views Castro as temporary.

3.4 The Impact of Trade Embargoes on Cuba

Trade embargo is one of the forms of international economic sanction that commonly occur in the political interaction between states. The United States has been the most frequent country that imposing this sanction after World War II. They have maintained the policy of economic embargo and diplomatic isolation for over 50 years.113 In the case of Cuba, the embargoes itself had become more strict during Fidel Castro leadership.

However, the United States direct investment did not immediately slow during Fidel Castro regimes. It was recorded that there were about $355 million total investment in 1959. In fact, the United States capital in Cuba was over three times that for all the rest of Latin America.114 US investments included most of the utilities, half the railways, and almost half of the sugar refineries; the US also held

113 Reexamining the Cuban embargo, retrieved from http://harvardpolitics.com/world/reexamining- cuban-embargo/ on October 28, 2014 at 9.49 pm 114 The History and Potential of Trade between Cuba and the US, retrieved from http://www.auburn.edu/ on October 28, 2014 at 10.45 pm

significant portions of cattle, tobacco, timber, banking, oil, and mining assets.115 There were about 75% of the arable lands that United States owned at that time. When United States imposing the first trade embargo to Cuba, it would definitely impact to the development of country’s economy. As the United Nation has recorded, the negative impacts of the embargo not only affected to the economic situation but also on social and cultural rights of the Cuban people.

3.4.1 The Economic Effects of the Embargo

The United States has maintained the policy of economic embargo on Cuba for over 50 years. Since its establishment, the economic damages directly felt by Cuba. Even though many people argued that the embargoes would hurt United States more than to Cuba itself, the embargoes still impacted serious consequences.

The damages include i)the loss of earnings due to the obstacles to the development of services and exportations (tourism, air transport, sugar, nickel); ii) the losses registered as a result of the geographic reorientation of the commercial flows, (additional costs of freight, stocking and commercialization at the purchasing of the goods…); iii) the impact of the limitation imposed on the growth of the national production of goods and services (limited access to technologies, lack of access to spare parts and hence early retirement of equipment, forced restructuring of firms, serious difficulties sustained by the sectors of sugar, electricity, transportation, agriculture…); iv) the monetary and financial restrictions (impossibility to renegotiate the external debt, interdiction of access to the dollar, unfavorable impact of the variation of the exchange rates on trade, "risk-country", additional cost of financing due to US opposition to the integration of Cuba into the international financial institutions…); v) the pernicious effects of the incentive to emigration, including illegal emigration (loss of human resources and talents generated by the

115 ibid

Cuban educational system); vi)social damages affecting the population (concerning food, health, education, and culture).116

Beside the impact to the Cuba’s export and import, the embargoes directly hamper the Cuban economic revenues that came from tourism, foreign direct investment (FDI), and currency transfers. Many European subsidiaries of United States firms had recently cut off negotiations with the management of hotels in Cuba, because their anticipated that the contract would be sanctioned under the United States economic sanction provision. The transfer of currencies from the United States is limited (less than 100 dollars a month per family) and some European banks had to restrain their commitment under the pressure of the US which let them know that indemnities would be required if the credits were maintained.117

The economic situation

In the first years of Fidel Castro leadership, policy changes were implemented and transforming Cuba economic system from mixed market system to became centrally planned socialist planned. One of the significant reforms that Castro made was agrarian reform law. This provision restricted the size of farms to 3.333 acres, brought the conflict between the Cuban governments goals and the interests of United States investors to a head.118 The land seized included major land that owned by United States corporations. Land in excess of this size would be expropriated and compensated with 20-year government bonds; the value of the land would be determined by the value that the owners had declared for tax purposes.119 The

116 The effects of the US embargo against Cuba and the reasons of the urgent need to lift it, retrieved from http://www.cetim.ch/oldsite/2003/ on October 30, 2014 at 11.43 pm 117 ibid 118 Wiley-Blackwell. A History of the Cuban Revolution. 2010 119 Ibid, pg 71

government established the National Institute of Agrarian Reform (INRA) as the central activist organization in the Revolution to enforce the revolution.120

In the mid - 1960, revolutionary nationalization took place, caused the worsening relations with United States and for the trade embargo itself. As we can see in the table 1 below, by the end of 1961, the Cuban economy had transformed into a state owned economy system in which many private sectors had been eliminated by the state.

Table 1: State Ownership Shares in the Cuban Economy, 1959-1988

Sector 1959 1961 1968 1988 Agriculture 0 37 74 97 Industry 0 85 100 100 Construction 10-20 80 100 100 Transportation 15-29 92 98 99 Retail trade 0 52 100 100 Wholesale trade 5-10 100 100 100 Banking 5-10 100 100 100 Education 80 100 100 100 Source: Mesa-Lago, 2000

The embargo led to a rapid reorientation of Cuba’s international trading relations.121 Soviet Union became Cuba’s close trading partner. Essentially, the Soviet – Cuban economic relation began in early 1960 when the Soviet – Cuban economic agreement was signed in 13 February. Under this agreement, the Soviet Union would buy 425.000 tons of sugar in 1960 and 1m. tons of sugar each of the subsequent four years (Walters, 1966). In July 1960, United States first sanction on Cuba which cut Cuba’s sugar quota and Soviet Union announced that they would buy the sugar that US had just refused to buy and also also began to engage in a

120 The Cuban Economy, retrieved from Paper by Archibald R. M. Ritter, on October 31, 2014 at 2.26 pm 121 ibid

substantial programme of military assistance shortly after Raúl Castro’s July 1960 visit to Moscow.122

Despite of Cuba and Soviet economic partnership, the socialist countries also provide a large market for Cuban sugar industry, as can be seen in the table 2 below:

Table 2. Cuba’s Main Trade Partners, 1955-1990

(Total Value in Current $US and Percentages of Total)

Major Sources of Cuba’s Merchandise Imports Year 1955-58 1960 1965 1970 1975 1980 1985 1990 TOTAL $US, Millions 692.0 638.0 866.2 1300,5 3113.1 4627.0 7983.2 7416.5 Socialist Countries (%) 0.3 18.7 76.0 69.4 51.4 78.0 83.7 -- Of which China 0.0 0.2 14.2 5.5 2.8 2.3 2.9 4.5 USSR 0.0 13.8 49.5 52.8 40.2 62.8 71.8 69.0 Rest of the World (%) 99.3 81.3 24.0 30.6 48.5 22.0 16.3 -- of which: Japan 0.6 1.6 0.5 2.4 11.6 3.9 2.7 0.6 Spain 1.7 2.1 5.4 2.0 4.9 3.0 2.2 2.4 United Kingdom 2.7 3.6 5.8 4.5 4.1 1.7 1.3 1.0 United States 73.3 48.5 0 0 0 0 0 0

Major Destinations of Cuba’s Merchandise Ex ports Year 1955-58 1960 1965 1970 1975 1980 1985 1990 TOTAL $US, Millions 700.4 618.0 690.6 1043.4 2952.2 3966.7 5983.0 5414.9 Socialist Countries (%) 4.1 24.2 77.7 74.5 67.2 70.1 88.9 -- Of which USSR 3.8 16.7 46.7 50.7 56.3 56.8 74.9 66.4 China 0.0 5.2 14.6 7.8 2.7 2.9 2.7 4.9 Rest of the World (%) 95.9 75.8 22.3 26.3 32.8 29.9 11.1 --

122 (Hampton, 2006)

Of which Japan 6.1 1.4 3.1 10.2 7.5 2.9 1.3 1.6 Spain 1.7 1.2 4.9 3.9 7.7 1.2 0.8 1.7 United Kingdom 4.1 1.4 1.9 3.9 0.4 0.4 0.5 0.8 United States 63.8 52.8 0 0 0 0 0 0 Sources: Oficina Nacional de Estadisticas, Anuario Estadistico de Cuba, La Habana, 1985, pp. 384-391 and Naciones Unidas, CEPAL, La Economia Cubana, 2000 Cuadro A33 and A34 From the table above, we can see that the embargo didn’t have much impact to the Cuba’s export and import revenues. In fact the embargo created detrimental effect to the United States because it would not only hurt Cuban economically but also United States. Indeed, Soviet Union had provided a lot of economic aid and also development assistance to Cuba so that the effects of the worst embargo were prevented.

The economic assistances that were given such as, the Soviet Union would pay the world market price with 20 percent, of the purchase price being in US dollars and the reminder applying against Cuban purchases in Russia; provided credit to Cuba about $100m which could be used for equipment, machinery, materials, and technical assistance.123 The credit itself carried an easy terms for Cuba which were provided 2.5 percent interest and repayable in traditional exports over period of 12 years.

From this view, we can see that Soviet Union was actively concerned to the Cuban affairs. Soviet initial interest in Cuba was stimulated by two major considerations such as, a desire on the part of Soviet policy makers to exploit a useful source of Cold War propaganda; and an eagerness on their part to seize an opportunity to fulfill their self-appointed role as a leaders of the world revolutionary (Boughton, 1974).

123 Walters, R. S. (1966). Soviet Economic Aid to Cuba: 1959 - 1964 . Wiley .

3.4.2 The Social Effects of the Embargo

The United States embargo on Cuba has been place since the early of 1960s. It was one of the few of embargoes (Iraq, Iran, and Libya) that given by the United States. A study by Marc Bossuyt which in charge in the Sub-Commission on the Promotion and Protection of Human Right, stated that the adverse consequences of embargoes beside to the economic situation, was also on the fulfillment of human rights.

Marc concluded that the US embargo violates human rights law in two distinct ways. Firstly, ―the fact that the United States is the major regional economic power and the main source of new medicines and technologies means that Cuba is subject to deprivations that impinge on its citizens’ human rights.‖ Secondly, by passing legislation that ―tries to force third-party countries into embargoing Cuba as well‖ – the 1992 Torricelli Act – the US government attempted to turn ―a unilateral embargo into a multilateral embargo through coercive measures, the only effect of which will be to deepen further the suffering of the Cuban people and increase the violation of their human rights‖.124

The reduction of the availability of this type of embargo threatens Cuba national health, to its nutritional stability and its health. The living standards for the average Cuban citizen became at depressed level, without access to dollars. However a humanitarian tragedy - which seems to be the implicit objective of the embargo - has been avoided only thanks to the will of the Cuban state to maintain at all costs the pillars of its social model, which guarantees to everyone, among others, a staple food for a modest price and a free consumption in the crèches, schools, hospitals, and homes for the elderly.125

124 The US Embargo agains t Cuba, retrieved from http://www.amnestyusa.org/ on November 1, 2014 at 11.01 pm 125 The effects of the US embargo against Cuba and the reasons of the urgent need to lift it, retrieved from http://www.cetim.ch/ on November 2, 2014 at 1.05 am

Despite of the government efforts to maintained Cuba’s health development, they faced an extraordinary cost to the overall welfare of the Cuban people. The embargoes had caused the limitation on Cuba’s access to the supply of medicines and medical equipment. Furthermore, the expansion of US pharmaceutical companies in the last three decades has limited the number of companies able to export their products to Cuba without facing penalties from the US government.126

United States has become the suppliers’ goods that necessary for Cuba’s health sector since long time ago. It provides a wide range of goods for health purposes and technologies such as medicines, laboratory products, anesthetics, defibrillators, artificial breathing apparatuses, dialysis apparatuses, and pharmaceutical stocks. Of course the embargoes would impact directly to the needs of the Cuban health sector. The shortage or the limitation could affect many medicines - which were not produce in Cuba - complicate the immediate and complete the implementation of the procedures of health treatments. Since health is the basic need and rights to every human all over the world, the embargoes practically disrupt the principles of the promotion and protection of human rights.

Moreover, the US authority’s infringements on individual freedom of movement and scientific knowledge (restrictions on travel of US researchers, the disrespect of bilateral agreements on Cuban researcher’s visas, refusal to grant software licences or to satisfy the orders from Cuban libraries of books, magazines, diskettes or CD-Rom of specialized scientific literature) have in fact led to the extension of the embargo to areas formally excluded from it by the law.127

The Fact that United States extended their embargoes to food and medicines in 1962 and also revokes the general license that permitting the export food and

126 ibid 127 ibid

medicines in 1964, created a wide impact of the embargo to Cuba. In here, Fidel Castro role on create decision making was very needed to cope with these challenges.

3.5 Chapter Summary

During period of 1960 – 1965, there were two embargoes imposed by the United States. The embargoes that happened in 1961 and 1963, had impacted to the Cuba’s economy and social development. In 1961, United States imposed Foreign Assistance Act which was prohibits aid or assistance to all communist countries and in 1963 United States imposed another embargoes which was Cuba Assets Control Regulations. The goal of the sanctions was to ―isolate the Cuban government economically and deprive it of U.S‖. dollars. Even though many argued that the embargoes didn’t hurt much to the Cuba’s economic, due to the economic assistance from Soviet Union and socialists countries, there were still some serious consequences to Cuba. Meanwhile, the embargoes also impacted to the social living development of the Cuban since United States embargoes limit the export and influenced to the Cuban health sector.

CHAPTER IV FIDEL CASTRO STRATEGIES & POLICIES IN OVERCOMING U.S TRADE EMBARGOES

Cuba and United States have been experiencing the turbulence relations since Cuba got its independence. As United States intervention became more widespread in the Cuban affair, revolutionary leaders have appeared to get Cuba’s full independence. Fidel Castro as one of revolutionary leaders in Cuba tried to achieve these goals. Since the beginning of his first year as a leader, Castro contrived his policies and strategies which opposed to the United States interest. The embargoes have been conducted at that time, as a United States response to Castro’s policies.

As in the previous chapter II, the writer has briefly provided the historical background of United States and Cuba which describing Cuba’s society development as well as became the basic aspect that associated with Castro strategies and policies. Further in the chapter III critically described the United States embargoes in chronological order during 1960 -1965 and also the economic and social impacts of embargoes. This chapter elaborates the discussion in chapter II and chapter III to furthermore answer the research question as how did Castro socialist strategies and policies in overcoming the impact of embargoes. The discussion elaborates first of Castro strategies and policies during the embargoes.

4.1 Fidel Castro’s Policies and Strategies

During 1960 - 1965 period, there were some reforms that Fidel Castro executed through his strategies and policies. According to English Dictionary, policy is a defined as a plan or course of action. On the other hand, strategy is defined as a careful plan or method for achieving a particular goal usually over a long period of

time.128 Hence in general the adoption of course of action and allocation of resources that necessary to achieve the long-term goals. At the first year of Castro leadership, he created the first policy that claimed as the greatest significance reforms which was the agrarian law. The main key of this policy was the expropriation and redistribution of landholdings for about 996 acres that included some United States corporations land. Aside that policy, there were some policies that also ignited United States Embargoes. The strategies and policies have reforms Cuba’s economic and below is the following the reforms:

Table 3: Major Economic Reforms

Date Reform Measure Specific Objectives 1960 March Establishment of the Junta Institution preparatory for Central de Planificaci ́n more centralized planning (JUCEPLAN ) June 29 Nationalization of oil companies July 6, Law 851, ―Nationalization of Authorizing nationalization of US Properties‖ law all assets owned by US  July 21 citizens  August 6  Nationalization of three US sugar mills  Sept. 17  Nationalization of all US sugar mills plus telephone and electricity companies  Nationalization of US- owned banks July-Sept. Nationalization of foreign owned enterprises October 13 Law 890 Nationalization of many Cuban owned enterprises October 15 Urban Reform law Nationalization of non-owner

128 Strategy Definition, retrieved from http://www.merriam-webster.com/ on February 15, 2015 at 11.30 pm

occupied housing and allocation to former renters under favorable terms 1961 “The Year of Education” January Launch of Literacy Campaign Objective: universal literacy by Dec., 1961 Expansion and Structural Establishment of universal change in education coverage for primary school; expansion of secondary and university education June Law for the Nationalization of Take-over of all education by Education the state

Source: The Cuban Economy: Revolution, 1959-1990. 2010. Archibald R. M. Ritter

From the table 3 above, we can see that in the mid-1960 nationalization policy has established and worsening the relation of these states. Effective reforms and expansions in education had been implemented in 1961. It was provided functional literacy to about 700.000 adults.129 In this year also, Cuba economy has transformed into a state owned economy in which the government took control over the corporations, as we can see in the table 1 above.

4.1.1 Instant Industrialization Strategy, 1961 – 1963

The Cuban revolution in 1959 has brought significant changing in Cuban economy. Castro believes that the economic transition to central planning was well advance to promote the development of the economy. Cuba’s first development strategy, installed by the Castro Government in 1961, called for ―Instant Industrialization‖, the rapid installation of a wide range of import-substituting

129 The Cuban Economy. 2010. Archibald R. M. Ritter

industries, such as metallurgy, heavy engineering and machinery, chemical products, transport equipment and even automobile assembly.130

According to Arch Ritter, Professor in Carleton University, there were four backgrounds that influenced the establishment of this strategy. The First background was inspired by traditional criticism of the dependence on sugar production and the economic and social structures it endangered. As we know that Cuba sugar plantations became the most important world producer of sugar and sugar plantations was the ultimate revenue for the country at that time. So from this view it felt necessary to diversify out of sugar.

The second was the conventional wisdom came from the United Nations Economic Commission for Latin America that stated there was no future for developing countries in primary commodity production due to declining prices vis-à- vis manufactures implying that they should industrialize behind protectionist barriers.131 Third view came from the Soviet and East European development approach that emphasize on industrial sector rather than agriculture. The last view was come from the uncertainty of future market and will influence the sugar prices, even though socialist countries stated that they will buy and give economic assistance. From this background, considerations in mode of production are critically important as the economic situation is the most important aspect to be measured within the revolution.

Even though the aimed of this strategy was to reduce the dependence of Sugar, the first instruction to do was to assure a high level of sugar production. The Most important thing was that industrial transformation with the installation of a wide range of import-substituting industries, such as metallurgy, heavy engineering and machinery, chemical products, transport equipment and even automobile

130 Fidel’s Phenomenal Economic Fiascoes: the Top Ten, retrieved from http://thecubaneconomy.com/ on November 7, 2014 at 1.24 am 131 ibid

assembly.132 This had to be achieved by a major investment financed by foreign exchange profit from sugar and credits from socialist countries.

However the strategy was failed. This happened because in order to make industrial transformation required technologies which made a massive imported of machinery, raw material, maintenance equipment, and equipment. The sugar sector was also ignored at that time and caused the harvest fell from 6.7 million tons in 1961 to 3.8 in 1963 generating a balance of payments crisis.133 The result was that Cuba became more dependent on sugar export and import many kind of goods.

4.1.2 The Ten Million Ton Sugar Strategy, 1964-1970

After the failure of the first strategy, the government reassessed again for Cuba economic direction strategy. Due to the long time period, in this sub-chapter the writer elaborates the ten million ton sugar strategy based on the topic time period scope. The writer is also describing further about the current situation in that period as the effect of the first strategy and explains the strategies that the government took to overcome the problems.

The scarcity of foreign exchange was seen as the fundamental obstacle to economic improvement, in view of Cuba’s need for many types of imports for investment purposes (Ritter A.R, 2010). Then the appropriate solution to deal with the crisis was to increase the production of sugar to be exported. As explained before, the first strategy had neglected the sugar production and caused the low of sugar harvest in 1962 - 1963. Therefore reinforcing the decision to emphasize sugar production became the best solution to rebuild the economic development. With the production target of ten million ton per year by 1970, the government had faced major problems as the failure of adopted measure in 1961 -1963. Sugar production remained relatively low in the early years of strategy. To carry out the strategy

132 ibid 133 Fidel’s Phenomenal Economic Fiascoes: the Top Ten, retrieved from http://thecubaneconomy.com/ on November 7,2014 at 10.47pm

automatically the government should control the land and sugar mills to achieve the strategy goals. This means almost all the agricultural private sector in Cuba was control by the government.

The 1964-1970 sugar plans was grounded on Cuba’s historic record as the world’s major sugar producing country for more than a century.134 The last industrialization program was a failure that caused trade deficit and indebtedness to the country. The government needs to turn Cuba again to become a massive sugar export. One of the efforts that the government executed was signed a new trade agreement with Soviet Union in 1964. The Soviets made a commitment to purchase 2.1 million tons from the 1965 harvest at the preferential price of 6.11 cents a pound and to increase annually the Cuban sugar quota for the next five years.135 Also, the Soviets subsidized the Cuban economy by providing it with crude oil at prices well below the world market.136 It was expected to provide sufficient foreign exchange and accelerate Cuba’s development after the failure of the first strategy. In here the Cuba’s government was prefer to choose cooperate with Socialist countries and Soviet Union rather than open up their market for foreign investment. Table 4: Cuban Merchandise Trade, 1958-1965 (millions of pesos)

134 The Ten Million Ton Sugar Harvest, retrieved from http://faculty.mdc.edu/ on November 14, 2014 at 10.20 pm 135 Ibid 136 Encyclopedia of Cuba: people, history, culture, retrieved from http://digital.csic.es/ on November, 16 2014 at 9.26 pm

Sources: Trade data for 1958-1989 is from Junta de Planificion, Boletin Estadistico de Cuba (La Habana, 1968)

To achieve the strategy goals, the government also established other agricultural export crops such as coffee, tobacco, and citrus fruit including domestic food crops. The Ten Million Ton Harvest marked Cuba’s return to sugar specialization for a single market, the difference now being that the Soviet Union replaced the U.S. market.137Even though the strategy faced major problems and the goal was not achieved (the harvest only reached about 8,5 million tons) but still it was the largest harvest ever until 1990.

4.1.3 Cuba Socialist Strategies & Policies

Nationalization became the significant point of Fidel Castro’s policies during his leadership. Nationalization is often refer to a way of a government to expand its economic resources and power by took over the ownership under the state control. It became one of the important features in socialism theory. In 1960 – 1963, Castro established seven laws that were related to nationalization in Cuba. The First Nationalization act (June, 1960), the Second Nationalization Act (August 6, 1960); a Third Nationalization Act (October 13, 1960); the Bank Nationalization Law (October 13, 1960); the Urban Reform Law (October 14, 1960); the Nationalization of Education (June 6, 1961); and the Second Agrarian Reform Law (October 3, 1963). Under these laws the nationalization policies established during the embargoes that transformed Cuba became an independent country that free from foreign intervention.

A series of nationalization became the important aspects of the Cuban economy that control under the government. These also occurred as a response of United States embargoes. Fidel Castro was not only established this policy for

137 Encyclopedia of Cuba: people, history, culture, retrieved from http://digital.csic.es/ on November 16, 2014 at 11.31 pm

economic purposed, but also for social purposed. This sub – chapter elaborates Castro’s policies in overcoming the impact of United States embargoes that in line with socialism theory.

4.1.3.1 Education & Social Services Policy

“From now on, the children of the peasants will have schools, sport facilities and medical attention, and the peasants will count for the first time as an essential element of the nation.”

Fidel Castro138

Fidel Castro revolution in advancing Cuba’s education had been remarkable. There were so many significant changes that Castro had done in a very short period of time. From the beginning of the revolution, Castro had transformed Cuba’s economic system that accompanied by transforming social initiatives equally also. As underdeveloped country, Cuba had a high illiteracy rate especially in the rural area. Then Castro asked for a thousand men and women as the volunteer to teach, reading, writing, and nutrition in the rural areas. These people were including doctors and engineers that were persuaded because the revolution needed their own profession.

Then in 1961, a great literacy campaign was launched in Cuba. This year was labeled as the Year of Education to eradicate illiteracy. In the same year, education for primary school, secondary, and university has expanded and diversified. The faculties at the university have been expanded such as, technology, agronomy, medicine, sciences, teaching, economy, humanities, and the wokers’ and peasants’ faculty – an adult extension division that prepares lower – class students to enter one of the other seven faculties. The government also opens another schools to enter beside university such as, schools of agronomy and fishing and industrial schools.

138 George Calloway, Fidel Castro Handbook, page 179

One of Castro’s strategies to eradicate illiteracy in Cuba was the establishment Law for the Nationalization of Education. Through this law Castro take over all of education and made all educational facilities public and free. This was accomplished through the state seizure of all private and religious educational institutions along with all their rights, materials, and assets. This seizure was justified by the need to place at disposal of the revolution all instructional facilities to facilitate the ―construction of the new man‖, a project that has resulted in a colossal failure in the long term.139

Nationalization of education facilities in Cuba were more often occurred in Cuba’s private educational sector because it was expanded significantly during and after United States occupation. New schools were founded also by missionaries that had come to the island during and after the invasion to alleviate suffering and missionize after the turmoil and destructions of the Wars for Independence. The attraction to private schools increased due to the fact that the public school system was insufficiently developed; moreover, the educational system was very centralized, corrupt, and despite valuable exceptions, according to Cuban critics, not attuned to economic demands and modern pedagogical methods.140 A 1950 World Bank study found that ―a lack of confidence in the public schools is reflected in a disproportionate increase of private school enrollment, with a tendency to intensify social class division‖ (Economic and Technical mission to Cuba 1951).

Public schools in Cuba were more common at the primary level while for secondary level was more weighted mostly at the private school. For higher education, public universities were founded in 1949 (Oriente and Villa Clara University). One year after, established two private universities (Santo Tomas de Villanueva and La Salle). Fidel Castro envisioned a stronger and more just state that included measures for redistribution and social justice; among others, this would

139Ted A. Henken, M.C. Latin America Focus in Cuba. 2013 140 On the Nationalization of Cuba’s Private Education, 1961, retrieved from http://www.academia.edu/ on November 23, 2014 at 4.30 pm

lower rents, increase certain taxes, and build a social infrastructure.141 The form of expropriation itself was explicitly mentioned as a possibility however was restricted to excessive land possessions by individuals or corporations which then would have to be compensated.142 In his speech, Castro once stated his greatest concerns about education in Cuba to provide sufficient payment and training of teachers to all Cuba.

It had also to be noted that to achieve instant industrialization strategy, needed an advanced human resources. And human resource is the most important and vital factor to enhance economic development in a country. The country will develop if the human resource is developed too. Better education will improved skill and will result an increase in economic production. So it became a compulsory for the government to provide adequate and sufficient education facilities to become an independent country.

Aside education facilities, the government of Cuba also provide a number of collective goods that all share equally. Castro established a policy in 1961 which nationalized the health care system, making it free to all Cubans. Since the beginning of the revolution, Cuba’s health system was faced some important challenges. First of all, most health care was concentrated in urban areas, and was offered through a network of private clinics and a weak public system that was generally regarded as deficient; second, in the first years after the revolution, about one-half of the physicians left the country. Cuba was left with the burden of caring for its people with greatly diminished resources and the need to train almost all its medical personnel.143

For the other basic needs, the government provided ―Ration Card‖ for regulating of foodstuffs and articles of clothing that was adopted on March 12, 1962. The aimed of the policy was to assured access to a basic level of necessary products

141 Ibid A 142 Ibid B 143 Views on Cuba, retrieved from http://www.pbs.org/ on November 27, 2014 at 4.30 pm

for all Cubans for many years. Castro believes that the government obliged to fulfill and distribute equally the other basic needs of its people. He realized that to become an independent and strong country, human resource should be advance. Education and health are important but there are also other human basic needs that need to be fulfilled equally. However the rationing system also led to major economic distortions and disincentives, in particular, has functioned in practice as a key source of corruption.144

Fidel Castro revolution in economy, health, and education of Cuba was also influenced by Cuba’s Socialist Party (PSP) in the formation of ―revolutionary consciousness‖. PSP declared that Cuba’s revolution demanded socialism point. The intervention of the private school sector was devoted in the sense that the government wanted to provide universal and free education to every child in Cuba. Hence to make this happen, Cuba’s education facilities should be converted into state property through nationalization policy.

From above explanation we can see that the government control over the public ownership for basic necessities of the Cuban life. There are a number of collective goods such as health and education, that all share equally. This characteristic indicates the tendency of Cuban society as socialist nature. As a dictatorial regime, Castrol vastly expanded the country’s social services, extending to all classes of society on an equal basis.145The nationalization also was conducted to support Castro campaign to eradicate illiteracy.

In the socialist nature, there is no more structure of capitalist society that determined through financial and economic position of members. Everyone is equal as far as economic status is concerned which connected to socialist society.146

144 Ted A. Henken, M.C. Latin America Focus in Cuba. 2013 145 Fidel Castro, retrieved from http://www.britannica.com/ on November 27, 2014 at 5.21 pm 146 Features and Characteristics of socialism, retrieved from http://www.studylecturenotes.com/ on November 24, 2014 at 10.00 pm

Nationalization purpose was not only to take over the control to the government but also to distribute all the wealth to share equally for the citizen. And it’s also applied to Nationalization in Cuba. The nationalization didn’t mean to take over all the private school in Cuba. There was also private school but the number was limited by the government

4.1.3.2 Nationalization Policy

Between 1960 – 1963, under the rule of Fidel Castro, he implemented an ambitious policy of economic nationalization. Specifically, there were six laws that enacted by the new government. Foreign and national enterprises were the initial target of these expropriations. Apparently Cuban artisans and small traders were also including to the expropriations. However assurances were provided by the government as a compensation of the expropriation. The seven laws were the First Nationalization act (June, 1960), the Second Nationalization Act (August 6, 1960); a Third Nationalization Act (October 13, 1960); the Bank Nationalization Law (October 13, 1960); the Urban Reform Law (October 14, 1960); the Nationalization of Education (June 6, 1961); and the Second Agrarian Reform Law (October 3, 1963).147

In February 1960, Cuba signed a trade agreement with the Soviet Union, which included Cuba buying Soviet oil and when the oil began arriving in June, US (ESSO and Texaco) and a British-Dutch company (Shell) refused to refine it.148 Castro constrained they have to do so if want to do business in Cuba. On June Castro nationalized the refineries because they still refused. As response to that, United States prohibited all sugar imports from Cuba. Castro then, nationalizing all United States – owned businesses, industries, and farms.149

147 Ted A. Henken, M.C. Latin America Focus in Cuba. 2013. Pg 142 148 Policy Toward Cuba, 1959-2004, retrieved from http://historicaltextarchive.com/ on November 24, 2014 at 10.21 pm 149 Ibid

This was followed by nationalizing United States banks companies. The government took over almost all Cuba’s private banks as well as credit unions. This measure was preceded by a resolution adopted days earlier through which the United States banks the First National City Bank of New York, the First Bank of Boston, and the Chase Manhattan Bank were confiscated together with all their branches in the country.150

In October 14, Urban Law Reform went into effect which nationalized all commercial real estate, lowered rents by half, and allowed formers renter to gradually become owners of their apartments. The Eisenhower Administration responded to 151 Cuba's radicalism on 16th by a partial embargo on Cuban goods. Cuba nationalized the rest of the property that United States citizen owned as responded to that. Castro also reduced the staff of the US embassy to eleven to reduce the number of potential spies. The US broke diplomatic relations and began to train Cuban exiles and others secretly to invade the island in 1961.152

As we can see, in less than three months between June 18 and October 14, 1960, the seizure of major industry, utilities, banks, school, apartment building, and department and wholesale stores were made quickly. The Law of Nationalization had seizure 26 United States companies, among which were the utility, oil, and import – export firms the Cuban Electric Company, the Cuban telephone company, Esso Standard Oil, the Texas West Indies Co., the Sinclair Cuba Oil Co., and the Cuban Trading Company; and the remaining expropriated United States company were all large sugar enterprises.153

The second Agrarian Law was enacted On October 1963. The first Agrarian law had fulfilled the long hopes of peasants and farmers to have access to land. If in

150 Ted A. Henken, M.C. Latin America Focus in Cuba. 2013 151 Policy Toward Cuba, 1959-2004, retrieved from http://historicaltextarchive.com/ on November 24, 2014 at 10.45 pm 152 Ibid 153 Ted A. Henken, M.C. Latin America Focus in Cuba. 2013

the first law the maximal holding of the land tenures was 402.6 hectare, in the second Agrarian Law, it further reduced the maximum land tenures became 67.1 hectares. It deepened the centralization of Cuban Agriculture by creating state monopolies, which acted as the sole purchasers of agricultural harvest as well as the sole providers of the seeds, supplies, and farm equipment, which were sold to farmworkers under unilaterally fixed prices and conditions.154 The government established the National Association of Small Farmers (ANAP) as well as Credit and Service Cooperatives (CCS) to ensure the political control of private farmers.

Fidel Castro decision in nationalizing both national and foreign company of course was based a number of reasons. The ultimate reason was that to play an increasingly active role in the restructuring the economy for Cuban benefit and remove Cuba dependency with United States. The nationalization process itself didn’t immediately happen in a bigger scope. However due to the United States reaction, Castro then forced to nationalize all US company. This also become the reason for the writer to choose the socialism theory because in the socialist nature private sector was allowed to enter the country.

However Nationalization implementation in Cuba became one of a series event that has given rise to a socialist society in Cuba. As mentioned before, nationalization program became one of the key features of socialism theory and thus transforming Cuban economy from a mixed market system to a centrally planned socialist system.

4.1.3.3 Cuba Partnership with USSR and Socialist Countries

Cuba’s economic relations with Socialist Countries became one of Fidel Castro strategies in overcoming the impact of United States embargoes. The socialist countries especially Soviet Union, quickly substituted the United States as Cuba’s

154 Ibid, pg 143

ultimate economic partner and dominated Cuba’s market. Between 1961 – 1969, Cuba conducted more than 400 bilateral agreements with socialist countries.155 Before the United States embargoes occurred, Cuba had conducted bilateral agreement with Soviet Union which purchase Cuban sugar at fixed prices for certain years (usually 5 years). Because of the world market of sugar was fluctuated at that time, the agreement benefited Cuba a lot.

Several government to government were established in 1960s to coordinate economic and scientific-technical assistance relationship, such as economic relation with German Democratic Republic (East Germany – 1964), Bulgaria, and Czechoslovakia (1965). Cuba relation with socialist countries became more deepened in 1972 after Cuba became a member of the CMEA (Council for Mutual Economic Aid).156 The member countries directly increased the paid of Cuban sugar and also for other Cuban product such as nickel and citrus.

The economic relation also brought advantages to Cuban import, as the prices were largely profitable. However the technological characteristic of Soviet bloc machinery and equipment were relatively rudimentary and inefficient.157 Despite of that, Soviet Union constantly provided an extensive educational, scientific, and technical operation through cooperation which thousands of university specialist were educated. The assistance that Cuba got had made a significant political influence in Latin America for Soviet Union and also strategic military presence that only 90 miles from the United States.

As the ten million strategy had implemented, sugar and Cattle were selected as the main areas of agricultural specialization. This happened because of some reasons which is due to natural conditions of soil and climate are particularly favorable and in this case Cuba has a long experience in the sugar industry. Sugar

155 Rex A. Hudson. Cuba: A Country Study.2002 156 Ibid. Pg 207 157 Ted A. Henken, M.C. Latin America Focus in Cuba. 2013

that would be exported will solve the balance of payments problems because of the economic crisis. The feasibility of this development strategy depended, of course, on the existence of a reliable and expanding market for Cuba’s sugar.158 Hence to provide a market for Cuba’s sugar, Cuba was already part of international socialist system and socialist countries which could provide. After the revolution and United States embargo occurred things were very different.

This economic agreement with Soviet Union, was indeed, advantages Cuba’s economic but then arises a question, to what extent that the Russian committed itself over the agreement. According to Leo Huberman in his book, Socialism in Cuba, Soviet Union also obtain economic advantages aside both countries common interest. Centering on the sugar agreement 1964, Soviet Union committed itself to buy Cuban sugar in certain quantities in each year. The price was also fixed along the duration of the agreement, at 6.11 cents a pound which was higher than the prices of Cuban producers had been receiving from the United States market and compares with the following world market prices as seen on below table:

Table 5: Cuban Sugar and Quantities base on the agreement

Prices (in cents Year Quantities (tons) per pound)

1964 - 5.86

1965 2.1 2.12

1966 3.0 1.86

1967 4.0 1.99

Source: Socialism in Cuba book by Leo Huberman and Paul Marlor Sweezy. 1969

158 Ibid pg 76

Cuba economic relation with Soviet Union and other socialist countries, are include as socialist decision because they’re all shared common interest which support Cuba as socialist countries. Thus their relation between countries became stronger. This action was of course influences the relation between United States and Cuba and the trade embargoes itself. Soviet Union also supports Cuba in against the United States. This was proven when Soviet Union imposed embargoes also to the United States. Since the beginning of Fidel Castro leadership, he conducted an economic agreement with Soviet Union and became closer as the strategy in overcoming the impact of trade embargoes.

4.1.4 Cuba’s Achievements

A. Diversification and Industrialization

These are the two another goals of Fidel Castro which were to diversify Cuba’s agricultural component and to industrialize the country, with the technical assistance expert from aboard (Sweezy L. H., 1969). The former meant growing things other than sugarcane, and to this end many producing cane fields were dug up and other crops planted (Sweezy L. H., 1969)

These policies were popular because of the large national income and employment gains from these policies. It has been suggested that Cuba should turning away from sugar as ultimate revenue, because Cuba’s 1961 great sugar production coupled with high production in Western Europe also, had driven down world market price of sugar. Moreover, Fidel Castro had argued retrospectively that the decision to harvest all available sugarcane lands in 1961 – and subsequently turn some of them to other crops – was not motivated by a deliberate strategy to diminish the importance of the sugar industry but rather responded to the lack of export opportunities for Cuban sugar after the loss of the United States market (Lopez, The economics of Cuban sugar, 1991).

Due to this policy, Cuba established Junta Central de Planificacion (JUCEPLAN), the state’s centralized economic planning agency. To reduce Cuba’s dependency on imports from Western countries, the government increased the production of items for domestic consumption.159 Juceplan was purposed to dictate national economy policy. Che, as one of Juceplan members, announced, boldly, that the government would nationalize five basic industries from 51 percent up to 100 percent and would exclude foreign capital form any participation in them; among the five was sugar (James, 2001). In 1961, nearly 175.000 hectares from sugarcane area to the cultivation of beans, peanuts, rice, cotton, and tubers.

B. Education As mentioned in the previous chapter, before Castro rule the country, the education system in Cuba was very poor. Education has become one of main revolutionary goals of Fidel Castro Government beside change Cuba’s economic system. It was proven from the government’s program which one of them was give the free education and all equipment required for all students. The revolutionary government viewed education as an important mechanism for changing the way people thought and therefore it became one of their priorities.160 Under Castro leadership, education was provided free. Different from pre-revolution, education was expensive. Only the rich were able to afford to send their children to school and children with disabilities would not receive an education at all (Garcia, 2006, Pg 150)

The Educational campaign began in 1961 with the year of education, which had as its goal teaching every illiterate to read and write, at the same time ―instilling in our children and young people an unbounded love of Fateherland and a feeling of

159 Cuba Economy, retrieved from http://www.countriesquest.com/ on November 9, 2014 at 4.59 pm 160 Education Under Castro, retrieved from https://cliojournal.wikispaces.com on November 12, 2014 at 5.25 pm

solidarity with the workers and peoples of all lands in their noble struggle for a free and happy life‖ (Fagen, 1969). Castro’s government increased the number of teachers, schools and the attendance rate of children in school to a higher level161. In fact, according to United Nation in 2009, literacy rates in Cuba became the highest in the world.

During 1961, about 271.000 literacy workers were spread around the country to teach and as a result, illiteracy rate were reduced about 25 percent at the end of the year. The government expanded the education system from three faculties to eight faculties (technology, agronomy, medicine, sciences, teaching, economy, humanities, and the workers & peasants’ faculties – an adult extension division that prepares thousands lower class to enter one of the seven faculties) (Kline, Cuba: The Politics of Socialist Revolution, 200). In addition, student in higher level was part of labor force. Most of them were part time and even some of them were in full time work. This rule was also applies to junior and senior high school level. Almost every faculty had a program of pre professional work which sends professors and students out into the field together from two weeks to two months a year.162 In total there were 133.000 students in post-secondary education, compared to the total students before the revolution. Despite of some problems that the government faced, the educational campaign has become one of the Castro’s greatest achievements during his leadership.

Table 6: Total Number of Person Taught During the Literacy Campaign (by provinces and by rural or urban place of residence) Province In towns In the Country Total

Pinar Del Rio 14.754 50.717 65.471

161 ibid 162 Harvey F. Kline. Cuba: The Politics of Socialist Revolution. 2000. Pg 479

Havana 71.712 19.749 91.461

Matanzas 14.218 20.670 34.888

Las Villas 46.559 84.291 131.480

Camaguey 21.075 62.611 83.686

Oriente 62.739 237.487 200.226

Totals 231.057 476.155 707.212

Table 7: Total Number of Those Who Remained Illiterate (1961by provinces and by rural or urban places of residences)

Province Population Illiterates Percent

Pinar Del Rio 500.581 25.680 5.1

Havana 1.858.112 27.319 1.4

Matanzas 427.088 13.082 3.2

Las Villas 1.121.800 43.766 3.9

Camaguey 757.111 42.081 5.5

Oriente 2.268.561 119.347 5,2

Totals 6.933.561 271.995 (avg) 3.9

C. Health During the Socialist Revolutionary Period, the Cuban government focused on health to reduce discriminatory practices and making universal provisions for basic needs and health care.163 In 1960 only few professors that remained at medical school. Severely hampered by this loss of medical school in the country, the

163 Health and Health Care: Revolutionary Period, retrieved from http://www.academia.edu/ on November 13, 2014 at 11.29 pm

government initially encountered difficulties in extending health care to marginalized groups in urban and rural locations and in maintaining the existing state-run health services in the city of Havana.164

Castro efforts to increase Cuba’s health sector quality were assisted by Soviet Union. For example, Soviet physicians with health professionals from other socialist countries compensated for Cuba’s shortage of doctors and medical professors.165 By 1964, Havana medical University graduated almost 400 physicians. Still in the same year, the government established the first health services program which was integral of polyclinic program. This program had proved very effective in reducing the mortality rate in Cuba. The willingness of Castro government to revolutionize health system has brought a great reform to Cuba. And this becomes one of Castro major reforms during Castro leadership. Now Cuba is list as one of the countries that has the best health system in the world.

D. Economic Achievements Economic achievements have been one of the great improvements also in the Cuban revolution. The Central Planning Commission (JUCEPLAN), had gathered some data statistic of Cuba’s economic achievements. These achievements were related to the increasing of trade production that benefited Cuba’s economic development. Nickel Nicaro and Moa were claimed as the largest nickel plants on the north coast of Oriente province in Cuba. At first these plants were built by the United States enterprise. So when the revolution began, the plant were still incomplete. The Americans thinks that Cuban wouldn’t be able to operate the plants. However the Cubans had succeeded to keep the plants operating with the economic assistance

164 Ibid A 165 Ibid B

from socialist countries. In fact the nickel export production had surpassed tobacco as one of the country’s biggest export. Table 8: Cuban Cattle Production, 1960-1965

Year Tons

1960 14.520

1961 18.120

1962 24.900

1963 21.630

1964 24.060

1965 29.134

Source: Leo Huberman and Paul Marlor Sweezy. Socialism in Cuba.1969

Cattle After the first of development strategy failed, Fidel Castro adopted a new strategy development that assigned a role of cattle as the second focus production after sugar. The achievement had quite impressive, according to Fidel Castro speech, the number of cattle was rise 24 percent from 5.776.000 in 1961 became 7.146.800 in 1967. Along the increasing number of cattle, the production of eggs and milk had also increase.

Land under cultivation

Before the revolution, there were huge amounts of uncultivated land. The revolutionary government then tried to bring those lands into new production so that it could decrease the unemployment rate. According to the Fidel Castro speech, the land under cultivation had risen 56 percent by 3.711.800 hectares in 1967 since the revolution began.

4.2 An Analysis of Cuba’s History Development

Cuba – United States long history had influenced Cuba’s society development until emerged the revolution. In the previous chapter, the writer has already described United States intervention since Cuba got its independence until Castro came to power. According to Marxism theory the class struggle is the basic agency of historical change. Therefore in this sub chapter, the writer tries to analyze Cuba’s society development that associated with history relation with United States which finally leads to Cuba’s revolution.

Before Fidel Castro rule the country, United States became the controller of Cuba’s market and price. They became not only for the primary export destination but also primary import for Cuba. With time, United States companies became prominent in Cuba and the relation between both countries became stronger. United States assisted Cuba in almost Cuban affairs such as such as economically, militarily, and to some extent politically. These caused United States took control in Cuba trade system and infrastructures. Not only that, United States also protected Cuban assets from international buyers so that United States was the only country that could control Cuba.

Class struggle was formed when United States owned almost Cuba’s sugar mills and the workers got less income. As Cuba’s economy was dominated by sugar, the United States domination in Cuba’s sugar mills had disadvantaged Cuban people. Even though United States companies absorb many workers and labors, there were part of the labors were still in suffered. The unemployment rate was also high. The rich became richer and the poor became poorer because of this system. These were the historic conditions that driven the revolution/force.

According to Marxism theory the changes in the mode of production is the way to end this condition and by that the economy will grow. In the case of Cuba, the changes of mode of production became the concerned to end Cuba dependencies

through this socialism implementation. Cuba dependencies had created United States control the economy system and resulted unequal of wealth distribution among the Cuban people. In this theory, the private sector that owned the means of production is creating the dependencies and restricts human freedom. Therefore the implementation of socialism is important to Cuba as the directions to changes the mode of production.

Class struggle were supposed to be eliminated with revolution or by force through socialism, followed quickly and inevitably by a classless society which governs itself without a governing class or structure166. United States – Cuba history has described us of how Cuba’s society works. As the controller, United States formed the society that associated with capitalist. Cuba – United States history have also encompasses a series of economic, politic, and social aspects and all of the series created struggles between classes, thus lead to socialist revolution.

From this theory, we can see that the history of Cuba and United States had influenced the establishment of Castro strategies and policies to overcome the embargoes. Since Castro from the beginning wanted to cut Cuba dependencies with United States and transformed the country, supposedly the embargoes didn’t affect much because the embargoes itself occurs as a response of the strategies and policies.

4.3 Fidel Castro Socialist Strategies and Policies Analysis

After describing the strategies and policies that Fidel Castro took, this chapter analyzes those strategies and policies correlation with the socialism theory and analyze whether it succeeded to overcome the embargoes. It begins with socialism definition in general. It is difficult to define socialism precisely because there are many versions of socialism definition given by economist, politicians, and sociologist. Some say that socialism is refer to economic and political system in a country, other say that socialism is more focusing to a country economic system.

166 Marxism, retrieved from http://www.businessdictionary.com/ on January 16, 2014 at 9.10 pm

Based from the history between the two countries that stated in the previous chapter, the history had influenced the development in Cuba and thus emerged the socialist revolution. The intervention that United States did in almost Cuba affairs, created Cuba became dependent on the United States, especially economically. The capitalist system that United States also brought became another aspect that ignited the revolution. These conditions had formed Cuba’s society development and became the foundation of Castro socialist strategies and policies towards the revolution.

History told that US intervention in Cuba’s government had resulted inequality to Cuba’s people. The capitalist regime also had resulted less prosperity for the less fortunate one that was happened for most Cuba citizen. Therefore Fidel Castro changed Cuba’s economic system which emphasized in providing equal opportunities for all. This became the basic concept of socialism theory.

As he changed the economic system, he was also provides the basic needs and free education for all the people in Cuba. It was proved from his policy that aimed to eliminate illiteracy rate and provide basic needs such as clothes, food, and etc. Castro applied socialism theory in his strategies and policies to achieve those goals. Most of Fidel Castro strategies and policies were emphasized to the importance of equal distribution both economically and socially which become the ultimate goals of socialism.

For the strategy, during 1960 -1965 period, Fidel Castro implemented two different strategies. If in the first strategy, he wanted to transform the country to become industrial country, in the second strategy Castro transform the country again to return to sugar as the market driven. The first strategy was influenced by four backgrounds that stated in the previous page. And also with the nationalization policies that had been established by Castro, the strategy was expected to be succeed. However the strategy failed and Castro implemented another strategy.

In the second strategy, Castro decided to return to sugar again. The failure in the first strategy had cost Cuba a lot and to rebuild the economy required a proper strategy. The ten million strategy was focused to increase the production of sugar and other crops. The strategies that Castro took during that period, were designed that in line and support with the policies.

After the strategies and policies Castro strategies and policies had influenced the situation within and outside Cuba. It can be said that before revolutionary took place, the whole Cuban economy was in the private sector. The revolutionary then progressively transformed Cuba to state-owned economy. In 1960 Cuba took over all United States owned properties in agriculture as well as in other branches of the economy. Cuba also nationalized all large private enterprises that include Cuban-owned sugar mills, together with the cane lands belonging to the same other (individuals and corporations). In the same year, Cuba established trade agreement with Soviet Union that included Cuba to buy Soviet Union oil.

Then the United States then broke diplomatic relation when Cuba established trade relation with Soviet Union and socialist countries. The expropriation of United States Company itself had already happened in 1954 and then Central Intelligence Agency or CIA overthrown the Arbenz Government. And now - Fidel Castro era - in an effort to overthrow the government, United States established trade embargoes to Cuba.

Cuba’s socialist strategies and policies that Castro’s established during the embargoes were succeeded in overcoming the impacts. It was proven from Cuba’s economic achievement in overcoming along the embargoes. Even though United States imposed the embargoes that disturb Cuba’s trade pattern, the amount of Cuba’s export still high that we can see from above tables. This happened due to Soviet Union and other socialist countries assistances to Cuba. Moreover Cuba also conducted many economic agreements with those countries. The achievement of

education system in Cuba was also remarkable. After Castro nationalize almost all private schools in Cuba, illiteracy rate was decrease progressively and provide equally for all the people

Castro’s socialist policies were not only implemented for Cuba’s economic system but also for the social services. As a result Castro had succeeded in transforming the country and attained many achievements. To some extent the embargoes impacted badly to Cuba’s economic however these were covered with numbers of Cuba’s achievement. Through trade embargoes Fidel Castro has proved that with a strong determination Cuba can survive from all the pressures to achieve their goal as a country. The most importantly, Castro socialist strategies and policies had succeeded to survive from United States embargoes. Aside from the economic achievements that the writer gathers from many resources, there are some experts statements saying that the embargoes have failed to hurt Cuban economic.

According to Zack Beauchamp, the embargoes failed to cripple Cuba’s economy. He continued that, based from GDP Growth of Cuba for the last 40 years - provided by the World Bank – Cuba has still managed fairly positive economic growth since the embargoes began.167 This was also followed by Archibald Ritter in his paper saying that, initially the Revolutionary leadership welcomed the US embargo and down-played its potential negative impacts, arguing that it would hurt the United States more than Cuba (Draper, 144, citing E. Guevara, F. Castro, and Blas Roca). In fact even the U.S Government admits the embargo doesn’t work.168 "We see very little evidence that the mainline dissident organizations have much resonance among Cubans,"Jonathan Farrar, then the top US diplomat in Havana, wrote in a 2009 cable revealed by Wikileaks.169

167 7 reasons to end the Cuba embargo, retrieved from http://www.vox.com/2014/12/17/7408743/cuba-embargo-failed on February 16, 2015 at 05.00 pm 168 Ibid A 169 Ibid B

The experienced of Cuban revolution proves that revolution is needed to stimulate economic growth and social development. The adoption of Cuba’s planned economy is enabling central Cuba government to control the state affairs and economic activity for a balanced, healthy, and educated country.

4.4 Chapter Summary

The strategies and policies that Fidel Castro made, had took an important role in overcoming the impact of United States trade embargoes. During 1960 – 1965, there were two strategies that Fidel Castro enacted. The first strategy was rapid industrialization and the second strategy was Cuban sugar policy. In each strategy, Fidel Castro established different policies as the tools to achieve those strategies. The first strategy was failed, then Castro decided to change Cuba strategy direction and back to sugar economic orientation. Despite of the failure of the first strategy, the Cuban revolution had positive influence to the Cuba’s economic and experienced great improvement.

Cuba – United States history had also took a role in influencing the establishment of Castro strategies and policies to overcome the embargoes, because United States intervention ignited the revolution. According to the Marxism theory socialism must occurs and this is the condition that happened to Cuba. Castro as the revolutionary leader wanted to end United States intervention through socialism implementation.

During 1960 – 1965, Fidel Castro established strategies and policies that opposed with United States interest. In the previous chapter, the writer has mentioned the general description and characteristics of socialism. And in this chapter we can see that many of Castro strategies and policies were tend to indicate to the socialist theory and characteristic. In the beginning of Castro leadership, he regulated a significant changing in Cuba’s economy. Cuba transformed from mixed market system became centrally socialist system. The new system eliminated private sector

in Cuba and the government owned the property. Castro wanted to establish a system that the lower income group can get the same beneficial results also.

Fidel Castro established strategies and policies which not only transformed Cuba’s economic but also Cuba’s social structures. In 1961 – 1963, Castro developed Instant Industrialization Strategy. He wanted to change Cuba’s dependence on sugar production. Through nationalization, the government owned the property of the companies industry. However because of the lack knowledge, technology, and on the other hand the sugar harvest fell, this strategy failed. And it resulted Cuba became more dependent on sugar production. After the failure of the first strategy, Castro developed Ten Million Ton Sugar Strategy which returns to sugar orientation again. The strategy target 10 million tons per year by 1970.

To emphasize social equality within Cuba, Castro nationalized Cuban education and health so that all Cuban can get equal treatment. Castro also established policy that regulates the distribution of human basic needs. All of these policies were indicates socialism theory. Almost all of Castro strategies and policies influence the relation between United States and Cuba because it disrupts United States interest. Important and significant measure had been taken during 1960 – 1965. These measure has made Cuba became independent and strong country until now. This period became critical for Fidel Castro because in his early years of leadership, he braves enough to take significant measures and able to survive under United States pressures.

After seen the above explanation we can see that the strategies and policies were tend to similar with the socialism theory. Based from the theoretical framework that the writer has mentioned, we can compare the theory of socialism with the Fidel Castro strategies and policies in the following table

NO Socialism Theory Strategies and Policies

1. Emphasis on Equality – Castro policy in nationalizing economic & social Cuban education and health facilities, so that all Cuban can get equal treatment

2. Castro policy in nationalizing

Public ownership of the almost all foreign and national means of the production companies during the rapid industrialization strategy development

3. State provide basic There was one of Castro policy necessities of life that regulate the distribution of human basic needs

4. All the decision was made by the Planned Economy government

5 Establishment of The elimination of private Classless Society company was also eliminate the capitalist class

The establishment of Castro’s Socialist strategies and policies were proved that his action was succeed in revolutionizing Cuba and overcoming the impact of United States embargoes based from the data that the writer has gathered.

CHAPTER V CONCLUSION Trade embargo is one of the forms of economic sanctions. United States has claimed as the most country that imposed this economic sanction in the world. In the case of Cuba, United States has imposed trade embargoes for almost half a century. Since Fidel Castro came to power the relation between both countries became worse and the trade embargoes occurred. The United States wanted to destabilize Fidel Castro that tends to have socialist characteristic by tried to isolate Cuba economically and deprive its resource. Fidel Castro regulations and policies were disrupted United States interest in Cuba. Therefore this study has focus on Fidel Castro strategy and policies in overcoming the impact of trade embargoes by the U.S.

The United States had millions of dollar invested in Cuba and there were many United States citizens there. Since Cuba got its independence, Cuba relation with the United States continued to grow and strengthen. United States plays a significant role in both Cuban politics and economic. US became the biggest market of Cuba’s export for over years. Therefore, due to the close relation, trade embargoes United States had impacted badly to the Cuban people. In here the role of Fidel Castro a leader has a very significant influence in overcoming the impact of the trade embargoes through the establishment of strategies and policies.

During 1960 -1965, United imposed two embargoes to Cuba. These sanctions were in response to Cuba policy which nationalizing foreign businesses that majority owned by United States. Before Fidel Castro ruled, United States had already established embargoes against foreign nations under Trading With the Enemy Act of 1917, section 5(b) that prohibiting, limiting or regulating trade and financial transactions with hostile countries in times of war. And this was imposed by the President Eisenhower to Cuba as a response to Castro nationalizing policy. It is important to know the impacts of United States embargoes so that we can measure

the steps taken by Fidel Castro in overcoming the impact and the progress as the result of Castro policies and strategies.

In the first year of Cuban revolution, policies were changes and transform Cuba’s economic system to a centrally planned socialist system. This changes ignited United States embargoes since its interfered United States interest. From 1961 – 1963, the first strategy development was established that aimed at instant industrialization but it was unrealistic and failed. The second strategy development was Cuban Sugar Policy which aimed at 10 million ton sugar harvest by 1970.

In each strategy, Castro implemented different policies that adjusted with the aims of the strategy. There were seven nationalizing policies during the first strategy development. These nationalizing includes all United States – owned businesses, industries, and farms. In the second strategy development, Castro implemented policies that were related to the increasing number of Cuban sugar harvest and Castro strategy to establish economic partnership with Soviet Union and Socialist countries. Soviet Union relation with Cuba itself had been built since Fidel Castro ruled the country as an effort to replace United States economic partner that dominated Cuba’s export and import pattern.

From this case, we can see that Castro strategies and policies has resulted great improvements to Cuba’s socio-economic development. The embargoes had, indeed, caused harmful impact to Cuba but this study has proved that Castro was succeed to overcome the impact of United States embargoes through his strategies and policies. If we examine further, Castro strategies and policies have the characteristic of socialism theory. The government action that took over almost all Cuba public ownership, the establishment of planned economy, the elimination of capitalist system were the basic theory of socialism that used by Fidel Castro in revolutionize the country. Furthermore socialism established as a critique of capitalism and defines as transitional period to become communism. Hence socialism and communism are quite similar.

After Fidel Castro had been replaced by his brother Raul, United States policies have been softening. The current President of United States, Barrack Obama, tries to end the United States trade and travel embargoes against Cuba. He has created new policies to eliminate restricting trade, travel, and support the private sector in Cuba. United States government is willing to improve the future for Cuban citizen. By doing this, United States believe that they can support democratic reforms and universal human rights in Cuba. Organization of American States (OAS) Secretary-General Jose Miguel Insulza welcomed the announcement, "Cuba is undertaking a process of economic reforms that will, I hope, lead to political reforms," he said.170

There were revolutionary leaders emerged in Cuba before Fidel Castro but it seems Fidel Castro significant strategies and policies that related to the socialism theory were the successful action in making the country that free from foreign interference. And it means that his action was succeed in revolutionizing Cuba in the middle of foreign pressures such as United States embargoes.

170 US-Cuba Relation, retrieved from http://www.cfr.org/cuba/us-cuba-relations/p11113 on February 16, 2015 at 05.30 pm

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