Cuba Dissertation

Dissertation on Cuba

This report is a dissertation proposal of changes that need to be implemented in Cuba to assure its future economic survival, growth and proper development of society.

• Monetary policy (money supply). Since Cuba is in economic slump, the monetary policy should be expansionary which in simpler terms would be reflected by low interest rates. Still, as long as Cuba is a planned economy, monetary policy will not work. Keeping interest rates low will be possible only when the country has enough of money which is backed up by gold or US dollars/Euro.

 

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• Banking functions (keep in mind that Cuba has only one bank). The bank should be the recipient of foreign money and the issuer of bonds/Eurobonds. We plan to create several other branches or independent banks to deal with lending money to the population and borrowing it from rich individuals and foreigners. Banks will work as multipliers of money in the society and will contribute to the better efficiency in finance.

• Foreign trade. Foreign trade should be the primary source of accumulation of hard currency and gold for Cuba. We plan to improve our cooperation with neighboring states including Mexico and the USA (hoping that the US boycott of Cuban goods is removed). Also Cuba should open economic relations with the former soviet Union states that still might depend on goods they used to receive from Cuba (tobacco, sugar). In other words, we will contact as many countries as possible for the establishment of foreign trade. Once again, it is better for our growing economy to have a positive trade balance.

• Foreign exchange reserves and how to increase them. Currently, the only four ways to increase foreign exchange reserves are (a) Foreign trade-positive trade balance (b) Foreign borrowings-issuing bonds (c) Privatization of land and property (d) Lease and rental of property/land to foreigners. I believe that Cuba should borrow some money from the IMF, the Paris club and the World Bank. The money should be used to boost trade.

• Promotion of key industries. Cuba historically had strong industries such as sugar, tobacco, nickel, and tourism. Since this nation has competitive advantage in these industries, the central bank should sponsor these industries in the beginning to upgrade machinery, agricultural and mining tools, and instill new modern beach equipment. These key industries are the industries that will likely to start working effectively first of all and bring in hard currency and gold into Cuba.

• Improvement of public sector services. Public sector services also need to be improved and we should continue investing in healthcare, education and transportation. Bitter as it may sound, we will have to buy foreign cars (Cuba does not produce cars), medical equipment, and possibly invite professors from the neighboring countries if Cuba does not find enough teachers.

• Cuba’s image abroad, especially in the United States. Cuba should constantly work on the ways to improve its image abroad. Cuba already is famous for its athletes in boxing who constantly win competition in the USA. Still Cuba needs to work on the image as a corruption-free, investor-friendly, tourist-waiting country. Corruption thus should be tapped and punished. Bureaucracy should be removed or reduced to allow foreign investors and tourists into the country quickly and easily. The visa procedure should be simplified for certain countries (all first world countries) which Cuba finds as useful trade and political partners. Speaking about making a particular image for the USA, I believe that Cuba should not do that. The USA is smart enough to observe Cuba just like other countries from different perspectives and from reporters in different countries, thus any attempt to trick the USA and make Cuba look good just for the USA would be silly at best. Cuba should have a consistent and congruent image of a country that wants to develop quickly and thus fights bureaucracy, corruption and invites foreign capital. This message would be understood by all countries. No special message should be sent to the USA if Cuba wants to remain an independent country as compared to states in South America who have puppet pro-American presidents.

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