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Cuba (11/03)


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For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Republic of Cuba

Former Cuban Capitol
Geography
Area: 110,860 sq. km. (44,200 sq. mi.); about the size of Pennsylvania.
Cities: Capital--Havana (pop. 2 million). Other major cities--Santiago de Cuba, Camaguey, Santa Clara, Holguin, Guantanamo, Matanzas, Cienfuegos, Pinar del Rio.
Terrain: Flat or gently rolling plains, hills; mountains up to 2,000 meters (6,000 ft.) in the southeast.
Climate: Tropical, moderated by trade winds; dry season (November-April); rainy season (May-October).

People
Population: 11 million; 70% urban, 30% rural.
Ethnic groups: 51% mulatto, 37% white, 11% black, 1% Chinese (according to Cuban census data).
Language: Spanish. Literacy--95%.
Work force (4.5 million): Government and services--30%; industry--22%; agriculture--20%; commerce--11%; construction--11%; transportation and communications--6%.

Government
Type: Totalitarian Communist state; current government assumed power by force January 1, 1959.
Independence: May 20, 1902.
Political party: Cuban Communist Party (PCC); only one party allowed.
Administrative subdivisions: 14 provinces, including the city of Havana, and one special municipality (Isle of Youth).

Flag: Cuba flag

Workers at tobacco plant

Economy
GDP (1999 est.): Purchasing power parity--$18.6 billion.
Real annual growth rate: 6.2% (1999); 3.0% (2001); 1.1% (2002).
Per capita income: $1,700 (2000 est.); $1,531 (2002 est.).
Natural resources: Nickel, cobalt, iron ore, copper, manganese, salt, timber.
Agriculture: Products--sugar, citrus and tropical fruits, tobacco, coffee, rice, beans, meat, vegetables.
Industry: Types--sugar and food processing, oil refining, cement, electric power, light consumer and industrial products.
Trade: Exports--$1.4 billion (2002; down 2.6% from 2001): sugar and its byproducts, nickel, seafood, citrus, tobacco products, rum. Major markets--Netherlands $363 million; Russia $271 million; Canada $208 million; Spain $199 million. Imports--$4.2 billion (dropped 14% compared to 2001 due to emergency oil consumption cuts imposed by the Government of Cuba and other constraints placed on a wide range of other imports): petroleum, food, machinery, chemicals. Major suppliers--Venezuela $890 million; Spain $554 million; China $532 million; Canada $283 million; Italy $251 million.
Official exchange rate: 1 Cuban peso=U.S.$1 (official rate). 26 Cuban pesos=U.S.$1 (internal exchange rate)

PEOPLE AND RELIGION
Cuba is a multiracial society with a population of mainly Spanish and African origins. The largest organized religion is the Roman Catholic Church, but evangelical protestant denominations are growing rapidly. Afro-Cuban religions, a blend of native African religions and Roman Catholicism, are widely practiced in Cuba. Officially, Cuba has been an atheist state for most of the Castro era. In 1962, the government of Fidel Castro seized and shut down more than 400 Catholic schools, charging that they spread dangerous beliefs among the people. In 1991, however, the Communist Party lifted its prohibition against religious believers seeking membership, and a year later the constitution was amended to characterize the state as secular instead of atheist.

Catholic Church      former religious school in Havana

While the Cuban constitution recognizes the right of citizens to freedom of religion, the government de facto restricts that freedom. Unregistered religious groups experience various degrees of official interference, harassment and repression. The Ministry of Interior engages in active efforts to control and monitor the country's religious institutions, including through surveillance, infiltration and harassment of religious professionals and practitioners. The Catholic church is the largest independent institution in Cuba today but continues to operate under significant restrictions and pressure imposed on it by the Cuban regime. The Cuban Government continues to refuse to allow the church to have independent printing press capabilities; full access to the media; to train enough priests for its needs or allow adequate numbers of foreign priests to work in the country; or to establish socially useful institutions, including schools and universities, hospitals and clinics, and nursing homes. All registered denominations must report to the Ministry of Interior's Department of Religious Affairs.

Banner of Pope's Visit The visit of Pope John Paul II in January 1998 was seen as an important, positive event for bringing a message of hope and the need for respect of human rights. Unfortunately, these improvements did not continue once the Pope left the island. While some visas were issued for additional priests to enter Cuba around the time of the visit, the regime has again sharply restricted issuance of visas. The Cuban Conference of Catholic Bishops in 2003 openly criticized the government's strict control over the activities of the Catholic Church, especially state restrictions on religious education and Church access to mass media.

Other Cuban religious groups--including evangelical Christians, whose numbers are growing rapidly--also have benefited from the relative relaxation of official restrictions on religious organizations and activities. Although particularly hard hit by emigration, Cuba's small Jewish community continues to hold services in Havana and has pockets of faithful in Santiago, Camaguey, and other parts of the island. See also the Department's report on international religious freedom for further information.

Workman HISTORY
Spanish settlers established the raising of cattle, sugarcane, and tobacco as Cuba's primary economic pursuits. As the native Indian population died out, African slaves were imported to work the ranches and plantations. Slavery was abolished in 1886.

Cuba was the last major Spanish colony to gain independence, following a lengthy struggle begun in 1868. Jose Marti, Cuba's national hero, helped initiate the final push for independence in 1895. In 1898, after the USS Maine sunk in Havana Harbor on February 15 due to an explosion of undetermined origin, the United States entered the conflict. In December of that year Spain relinquished control of Cuba to the United States with the Treaty of Paris. On May 20, 1902, the United States granted Cuba its independence but retained the right to intervene to preserve Cuban independence and stability under the Platt Amendment. In 1934, the amendment was repealed, and the United States and Cuba agreed to continue the 1903 agreement that leased the Guantanamo Bay naval base to the United States.

Independent Cuba was often ruled by authoritarian political and military figures who either obtained or remained in power by force. Fulgencio Batista, an army sergeant, organized a non-commissioned officer revolt in September 1933 and wielded significant power behind the scenes until he was elected president in 1940. Batista was voted out of office in 1944 and did not run in 1948. Both those elections were won by civilian political figures with the support of party organizations. Running for president again in 1952, Batista seized power in a bloodless coup 3 months before the election was to take place, suspended the balloting, and began ruling by decree. Many political figures and movements that wanted a return to the government according to the Constitution of 1940 disputed Batista's undemocratic rule.

Fidel Castro, who had been active politically before Batista's coup, on July 26, 1953 led a failed attack on the Moncada army barracks in Santiago de Cuba in which more than 100 died. After defending himself in a trial open to national and international media, he was jailed, and subsequently was freed in an act of clemency, before going into exile in Mexico. There he organized the 26th of July Movement with the goal of overthrowing Batista, and the group sailed to Cuba on board the yacht Granma, landing in the eastern part of the island in December 1956.

Batista's dictatorial rule fueled increasing popular discontent and the rise of many active urban and rural resistance groups, a fertile political environment for Castro's 26th of July Movement. Faced with a corrupt and ineffective military itself dispirited by a U.S. Government embargo on weapons sales to Cuba and public indignation and revulsion at his brutality toward opponents, Batista fled on January 1, 1959. Although he had promised a return to constitutional rule and democratic elections along with social reforms, Castro used his control of the military to consolidate his power by repressing all dissent from his decisions, marginalizing other resistance figures, and imprisoning or executing thousands of opponents. An estimated 3,200 people were executed by the Castro regime between 1959-62 alone. As the revolution became more radical, hundreds of thousands of Cubans fled the island.

Castro declared Cuba a socialist state on April 16, 1961. For the next 30 years, Castro pursued close relations with the Soviet Union until the demise of the U.S.S.R. in 1991. Relations between the United States and Cuba deteriorated rapidly as the Cuban regime expropriated U.S. properties and moved toward adoption of a one-party communist system. In response, the United States imposed an embargo on Cuba in October 1960, and, in response to Castro's provocations, broke diplomatic relations on January 3, 1961. Tensions between the two governments peaked during the October 1962 missile crisis.

GOVERNMENT
Cuba is a totalitarian state controlled by Fidel Castro, who is chief of state, head of government, First Secretary of the PCC, and commander in chief of the armed forces. Castro seeks to control most aspects of Cuban life through the Communist Party and its affiliated mass organizations, the government bureaucracy, and the state security apparatus. In March 2003, Castro announced his intention to remain in power for life. The Ministry of Interior is the principal organ of state security and control.

According to the Soviet-style Cuban constitution of 1976, the National Assembly of People's Power, and its Council of State when the body is not in session, has supreme authority in the Cuban system. Since the National Assembly meets only twice a year for a few days each time, the 31-member Council of State wields power. The Council of Ministers, through its 9-member executive committee, handles the administration of the economy, which is state-controlled except for a tiny and shriveling open-market sector. Fidel Castro is President of the Council of State and Council of Ministers and his brother Raul serves as First Vice President of both bodies as well as Minister of Defense.

Although the constitution theoretically provides for independent courts, it explicitly subordinates them to the National Assembly and to the Council of State. The People's Supreme Court is the highest judicial body. Due process is routinely denied to Cuban citizens, particularly in cases involving political offenses. The constitution states that all legally recognized civil liberties can be denied to anyone who opposes the "decision of the Cuban people to build socialism." Citizens can be and are jailed for terms of 3 years or more for simply criticizing the communist system or Fidel Castro.

The Communist Party is constitutionally recognized as Cuba's only legal political party. The party monopolizes all government positions, including judicial offices. Though not a formal requirement, party membership is a de facto prerequisite for high-level official positions and professional advancement in most areas, although non-party members are rarely allowed to serve in the National Assembly. The Communist Party or one of its front organizations approves candidates for any elected office. Citizens do not have the right to change their government. In March 2003, the government carried out one of the most brutal crackdowns on peaceful opposition in the history of Cuba when it arrested 75 human rights activists, independent journalists and opposition figures on various charges, including aiding a foreign power and violating national security laws. Authorities subjected the detainees to summary trials and sentenced them to prison terms ranging from 6 to 28 years. Amnesty International identified all 75 as "prisoners of conscience." The European Union (EU) condemned their arrests and in June, it announced its decision to implement the following actions: limit bilateral high-level governmental visits, reduce the profile of member states' participation in cultural events, and invite Cuban dissidents to national-day celebrations. Although the constitution allows legislative proposals backed by at least 10,000 citizens to be submitted directly to the National Assembly, in 2002 the government rejected a petition known as the Varela Project, with other 11,000 signatures calling for a national referendum on political and economic reforms. Many of the 75 activists arrested in March participated in the Varela Project. In October 2003, Project Varela organizers submitted a second petition to the National Assembly with an additional 14,000 signatures.

Old building     Ambos Mundos Hotel
Cuba's state-controlled economy has failed to provide adequate housing to Cubans. Multi-family occupation of often unsafe housing is common. The government uses scarce resources to restore and preserve historic sites intended for tourist use.

NATIONAL SECURITY
Under Castro, Cuba became a highly militarized society. From 1975 until the late 1980s, massive Soviet military assistance enabled Cuba to upgrade its military capabilities and project power abroad. The tonnage of Soviet military deliveries to Cuba throughout most of the 1980s exceeded deliveries in any year since the military build-up during the 1962 missile crisis. In 1990, Cuba's air force, with about 150 Soviet-supplied fighters, including advanced MiG-23 Floggers and MiG-29 Fulcrums, was probably the best equipped in Latin America. In 1994, Cuba's armed forces were estimated to have 235,000 active duty personnel.

Cuban military power was sharply reduced after the loss of Soviet subsidies. Today, the Revolutionary Armed Forces number about 60,000 regular troops. The military plays a growing role in the economy and manages a number of hotels in the tourist sector. The navy and air force are only a fraction of their former size. The country's two paramilitary organizations, the Territorial Militia Troops and the Youth Labor Army, have a reduced training capability. Cuba also adopted a "war of the people" strategy that highlights the defensive nature of its capabilities. The government continues to maintain a large state security apparatus, under the Ministry of Interior, to repress dissent within Cuba, and in the last decade, has formed special forces units to confront indications of popular unrest.

ECONOMY
FarmingThe Cuban Government continues to adhere to socialist principles in organizing its state-controlled economy. Most of the means of production are owned and run by the government and, according to Cuban Government statistics, about 75% of the labor force is employed by the state. The actual figure is closer to 93%, with some 150,000 small farmers and another 108,000 "cuentapropistas," or holders of licenses for self-employment, out of a total workforce of about 4.4 million people.

The Cuban economy is still recovering from a decline in gross domestic product of at least 35% between 1989 and 1993 as the loss of Soviet subsidies laid bare the economy's fundamental weaknesses. To alleviate the economic crisis, in 1993 and 1994 the government introduced a few market-oriented reforms, including opening to tourism, allowing foreign investment, legalizing the dollar, and authorizing self-employment for some 150 occupations. These measures resulted in modest economic growth; the official statistics, however, are deficient and as a result provide an incomplete measure of Cuba's real economic situation. Living conditions at the end of the decade remained well below the 1989 level. Lower sugar and nickel prices, increases in petroleum costs, a post-September 11, 2001 decline in tourism, and a devastating November 2001 hurricane created new economic pressures on the country, threatening to take back the few improvements made in the mid- and late 1990s. Shortages of food and fuel increased dramatically.

Truck carrying workmenIn the mid 1990s tourism surpassed sugar, long the mainstay of the Cuban economy, as the primary source of foreign exchange. Tourism figures prominently in the Cuban Government's plans for development, and a top official cast it as at the "heart of the economy." Havana devotes significant resources to building new tourist facilities and renovating historic structures for use in the tourism sector. Roughly 1.7 million tourists visited Cuba in 2001, generating about $1.85 billion in gross revenues.  However, the government's hope for continued growth in this sector was unrewarded by the 2001 global economic downturn and the negative effects of September 11 on regional tourism; in 2002, 1,683,716 tourists visited the island, generating revenue of $1.5 billion.

Remittances play a large role in Cuba's accounts, accounting for between $800 million and $1 billion per year to an $18.6 billion economy. The majority of remittances come from families in the United States that are permitted by U.S. law to send to the island up to $1,200 in a year. This provides nearly 60% of the Cuban population with some access to dollars. The Cuban Government tries to capture these dollars by allowing Cuban citizens to shop in state-run "dollar stores," which sell food, household, and clothing items at a high mark-up averaging over 240% of face value. The global economic slump and reduced remittances have contributed to Cuba's faltering economic growth. Sugar, which has been the mainstay of the island's economy for most of its history, has fallen upon troubled times. In 1989, production was more than 8 million tons, but by the mid-1990s, it had fallen to around 3.5 million tons. Inefficient planting and cultivation methods, poor management, shortages of spare parts, and poor transportation infrastructure combined to deter the recovery of the sector. In June 2002, the government announced its intention to implement a "comprehensive transformation" of this declining sector. Almost half the existing sugar mills were closed and more than 100,000 workers were laid off. The government has promised that these workers will be "retrained" in other fields, though it is unlikely they will find new jobs in Cuba's stagnant economy. Moreover, despite such efforts, the sugar harvest continued to decline, falling to 2.1 million tons in 2003, the smallest since 1933.

To help keep the economy afloat, Havana actively courts foreign investment, which often takes the form of joint ventures with the Cuban Government holding half of the equity, management contracts for tourism facilities, or financing for the sugar harvest. A new legal framework laid out in 1995 allowed for majority foreign ownership in joint ventures with the Cuban Government. In practice, majority ownership by the foreign partner is practically nonexistent. Of the 540 joint ventures formed since the Cuban Government issued the first legislation on foreign investment in 1982, only 397 remained by the end of 2002. In addition, the number of joint ventures formed each year has been steadily declining since 1997, and foreign direct investment flows decreased from $448 million in 2000 to $39 million in 2001. Many of these investments are loans or contracts for management, supplies, or services normally not considered equity investment in Western economies. Investors are constrained by the U.S.-Cuban Liberty and Democratic Solidarity (Libertad) Act that provides sanctions for those who "traffic" in property expropriated from U.S. citizens. As of August 2002, 18 executives of two foreign companies have been excluded from entry into the United States. More than a dozen companies have pulled out of Cuba or altered their plans to invest there due to the threat of action under the Libertad Act.

Medicinal Plants for SaleIn 1993 the Cuban Government made it legal for its people to possess and use the U.S. dollar. Since then, the dollar has become the major currency in use. The gap in the standard of living has widened between those with access to dollars and those without. Jobs that can earn dollar salaries or tips from foreign businesses and tourists have become highly desirable. It is common to meet doctors, engineers, scientists, and other professionals working in restaurants or as taxi drivers.

To provide jobs for workers laid off due to the economic crisis, furnish services the government was having difficulty providing, and to try to bring some forms of black market activity into legal--and therefore controllable--channels, Havana in 1993 legalized self-employment for some 150 occupations. The government tightly controls the small private sector by regulating and taxing it. For example, owners of small private restaurant can seat no more than 12 people and can only employ family members to help with the work. Set monthly fees must be paid regardless of income earned, and frequent inspections yield stiff fines when any of the many self-employment regulations are violated. Rather than expanding private sector opportunities, in recent years, the government has been attempting to squeeze more of these private sector entrepreneurs out of business and back to the public sector. Many have opted to enter the informal economy or black market, and others have closed. These measures have reduced private sector employment from a peak of 209,000 to approximately 53, 000 in 2003. Moreover, a large number of those people who nominally are self-employed in reality are well-connected fronts for military officials. No recent figures have been made available, but the Government of Cuba reported at the end of 2001 that tax receipts from the self-employed fell 8.1% due to the decrease in the number of these taxpayers.

Prolonged austerity and the state-controlled economy's inefficiency in providing adequate goods and services have created conditions for a flourishing informal economy in Cuba. As the variety and amount of goods available in state-run peso stores has declined, Cubans have turned increasingly to the black market to obtain needed food, clothing, and household items. Pilferage of items from the work place to sell on the black market or illegally offering services on the sidelines of official employment is common, and Cuban companies regularly figure 15% in losses into their production plans to cover this. Recognizing that Cubans must engage in such activity to make ends meet and that attempts to shut the informal economy down would be futile, the government concentrates its control efforts on ideological appeals against theft and shutting down large organized operations. A report by an independent economist and opposition leader speculates that more than 40% of the Cuban economy operates in the informal sector.

Woman selling booksCuba's precarious economic position is complicated by the high price it must pay for foreign financing. The Cuban Government defaulted on most of its international debt in 1986 and does not have access to credit from international financial institutions like the World Bank, which means Havana must rely heavily on short-term loans to finance imports, chiefly food and fuel. Because of its poor credit rating, an $11 billion hard currency debt, and the risks associated with Cuban investment, interest rates have reportedly been as high as 22%. In 2002, citing chronic delinquencies and mounting short-term debts, Moody's lowered Cuba's credit rating to Caa1 - "speculative grade, very poor." Dunn and Bradstreet rate Cuba as one of the riskiest economies in the world.

FOREIGN RELATIONS
Cuba's once-ambitious foreign policy has been scaled back and redirected as a result of economic hardship and the end of the Cold War. Cuba aims to find new sources of trade, aid, and foreign investment, and to promote opposition to U.S. policy, especially the trade embargo and the 1996 Libertad Act. Cuba has relations with over 160 countries and has civilian assistance workers--principally physicians and nurses--in more than 20 nations.

Street scene with bikersSince the end of Soviet backing, Cuba appears to have largely abandoned monetary support for guerrilla movements that typified its involvement in regional politics in Latin America and Africa, though it maintains relations with several guerrilla and terrorist groups and provides refuge for some of their members in Cuba. Cuba's support for Latin guerrilla movements, its Marxist-Leninist government, and its alignment with the U.S.S.R. led to its isolation in the hemisphere. In January 1962, the Organization of American States (OAS) suspended Cuba's membership.

Throughout the 1970s and 1980s, Cuba expanded its military presence abroad, spending millions of dollars in exporting revolutions; deployments reached 50,000 troops in Angola, 24,000 in Ethiopia, 1,500 in Nicaragua, and hundreds more elsewhere. In Angola, Cuban troops, supported logistically by the U.S.S.R., backed the Popular Movement for the Liberation of Angola (MPLA) in its effort to take power after Portugal granted Angola its independence. Cuban forces played a key role in Ethiopia's war against Somalia and remained there in substantial numbers as a garrison force for a decade. Cubans served in a non-combat advisory role in Mozambique and the Congo. Cuba also used the Congo as a logistical support center for Cuba's Angola mission.

In the late 1980s, Cuba began to pull back militarily. Cuba unilaterally removed its forces from Ethiopia, met the timetable of the 1988 Angola-Namibia accords by completing the withdrawal of its forces from Angola before July 1991, and ended military assistance to Nicaragua following the Sandinistas' 1990 electoral defeat.

U.S.-CUBAN RELATIONS
The fundamental goal of U.S. policy toward Cuba is to promote a rapid, peaceful transition to a stable, democratic form of government and respect for human rights. U.S. policy has two fundamental components: maintaining pressure on the Cuban Government for change through the embargo and the Libertad Act while providing humanitarian assistance to the Cuban people and working to aid the development of civil society in the country. President Bush announced an Initiative for a New Cuba on May 20, 2002, that called on the Cuban Government to undertake political and economic reforms and conduct free and fair elections for the National Assembly. The Initiative challenged the Cuban Government to open its economy, allow independent trade unions, and end discriminatory practices against Cuban workers. President Bush made clear that his response to such concrete reforms would be to work with the U.S. Congress to ease the restrictions on trade and travel between the United States and Cuba. The Cuban Government did not enact any such reforms. Elections for the National Assembly were held in January 2003, with 609 government-approved candidates running. That was followed by the March crackdown on members of civil society. On October 10, 2003, President Bush announced new initiatives on Cuba. These include a Commission for Assistance to a Free Cuba, which will be co-chaired by Department of Housing and Urban Development (HUD) Secretary Martinez and Secretary of State Powell in order to: bring about a peaceful, near-term end to the dictatorship; establish democratic institutions, respect for human rights, and the rule of law; create the core institutions of a free economy; modernize infrastructure; and meet basic needs in the areas of health, education, housing, and human services.

Support for the Cuban people is the central theme of U.S. policy as it has called for facilitated humanitarian assistance to the Cuban people by non-governmental groups, resumption of direct mail service, and the establishment of scholarships in the U.S. for Cubans. The United States is now the largest foreign source of humanitarian aid for Cuba. Sales of medicine to Cuba have been legal since 1992; sales of food since 2000.

U.S. policy also pursues a multilateral effort to press for democratic change by urging its friends and allies to actively promote a democratic transition and respect for human rights. The United States opposes consideration of Cuba's return to the OAS or inclusion in the Summit of the Americas process until there is a democratic Cuban Government. The United States has repeatedly made clear, however, that it is prepared to respond reciprocally if the Cuban Government initiates fundamental, systematic, democratic change and respect for human rights.

Principal U.S. Interests Section Officials
Principal Officer--James Cason
Deputy Principal Officer--Louis J. Nigro
Political/Economic Chief--Francisco D. Sainz
Consul General--Richard Beer
Public Affairs Officer--Kelly Keiderling

The U.S. Interests Section is located at Calzada between L & M Streets, Vedado, Havana, switchboard: (53-7) 33-3551-3559, fax/general: 33-3700. U.S. Information Service: 33-3967 fax: 33-3869, hours: 8:30 a.m. to 5:00 p.m. Emergencies/after hours: 33-3026.

For the most current version of this Note, see Background Notes A-Z.



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