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US and Cuban Economy

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Abstract

USA and Cuba have been like two brothers living side by side with a different mindset and attitude. They may seem to be different apparently in terms of customs, public relations and governance methodology. However a close companionship with less alternative to survival has taught them both to move ahead of the bitter facts and mindsets that have governed there relations for more than half a century. There at the end of the first decade of the 21st century signs of possible handshakes and smiles have emerged on both sides that seem to be a pleasant change for the civilizations on ground. 

Recent relationship between USA and CUBA in International Political Economy

Introduction

USA and Cuba have enjoyed there set of disputes for more the 50 years. USA been one of the biggest if not the biggest economic power of the 21st century is a heaven yet in reach for the less developed countries in its neighborhood. With a GDP estimate of $14.441 trillion dollars in 2008 and a per capita income of $47,440[1] USA is certainly a big attraction for Cuba. Yet today Cuba is no more what was perceived in general pertaining to its economy a decade ago. Today Cuba has an estimated GDP of $125.5 billion (2007 estimated), with a per capita income of $9,500(2008 estimate)[2]. Over the years the US had upheld an economic blockade against Cuba in pursuit to bring about a change in its method of governance and rule to something worth more conforming to the desires of Washington DC. Despite all possible bench marks of history till year 2009, the US stance over Cuba was not acknowledged by the International world or even the US population in majority. Therefore, when on 13 April President Obama announced a significant shift in U.S.-Cuba policy in terms of loosening restrictions on family visits and remittances, as well as opening up the communist nation to satellite and cellular service, it was considered a long awaited and pleasantly accepted step in the direction of reorienting U.S. relations with Cuba. As in Truman Doctrine by Sturm (2009), is it rightly stated that “The United States needs to adopt a new strategy toward Cuba that prioritizes economic liberalization, the promotion of human rights, and cooperation in critical areas such as counternarcotics. Any policy that fails to further these goals should be abandoned.”

Economic Interdependence

Over the years, in spite of U.S. sanctions and economic blockade of Cuba, Cuba and the United States have expanded economic cooperation. The agricultural exports of U.S. to Cuba rose from zero dollars in 2000 to $710 million in 2008, as the per American Farm Bureau Cuba could eventually become a $1 billion export market for U.S. goods.[3] Under the umbrella of moderate national consent, individual US states like Nebraska, Oklahoma and Texas have made discrete agricultural deals with Cuba in recent years.[4] These and other trade activities have already put the United States among Cuba’s top five trading partners. With time this will for economic cooperation can grow with positive effects for the Cuban nation. As far as Cuba is concerned it had successfully experimented with market reforms in the 1990s, and its recent interest in economic reform suggests that a return to such policies was surely under anticipation.

At the end of the first decade of the 21st century there are more private entrepreneurs in Cuba than there were in the early 1990s, also the on ground requirement and potential for economic reforms and progression have created a big booming market for change[5]. The recent worldwide financial crisis of economic depression also affected Cuba in a very drastic manner, this have aggravated the need of time for the Cuban government to be positive and more focused towards their economic cooperation with the US.

Even today few proponents of the sanctions regime in Washington DC argue with some reason that trade could prolong Cuba’s communist government. However, the Obama administration seems to have realized that there is a real possibility that the small expansion of economic freedoms today could pave the way for greater political freedom in the future. In this respect President Obama’s decision to loosen restrictions on travel and visa regulations along with remittances for Cuban- Americans marks an excellent first step toward a new economic approach. A well known fact is that remittances to the island nation already pump up to $1 billion into the Cuban economy each year; the new economic handshake extended by the present US government with this new policy will allow that figure to climb, this would in term have a positive effect in terms of poverty reduction and would also bring economic betterment for the Cuban economy and its people[6]. In the same respect relaxation the cross boarder travel restrictions will render more freedom for business men on both the sides to have ease of access to the growing potential and resource markets on both the sides.

In pursuit of same motives of peace and prosperity the US administration may consider in time to remove travel and economic restrictions for all Americans, not just Cuban-Americans, based on the same economic rationale. Moreover, the United States may consider revision of its few export policies. With every natural or unnatural distortion of regional or global scope, the potential of economic cooperation and investment surely increases. Therefore liberalizing trade relations to allow for the export of agricultural machinery and other products to Cuba would aid in reconstruction efforts after the 2008 hurricane disasters.

Conclusion

In the 21st century economic strength and revive ability has become the key to national survival for all nations not only in a discrete manner, rather in an intermingling way, such that if your neighboring country is dry and starving it would drain down your economy as well, examples in this perspective can be observed all across the globe. It about time the developed countries step forward on the basis of mutual economic welfare and cooperation and help to keep the balance between economic wealth and wellbeing. The same notion lays down a great deal of responsibility for the US to cooperate with its neighboring nations and harbor better economic relations that would in time lead to political stability as well.

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