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Discussion: (18 comments)

  1. Of course the obvious question here is that if they buy and import this stuff then what do they produce in Cuba that can be sold to get the money to buy the imports.

    It would seem that even if the govt gets the money by taxing people or if the imported stuff is bought directly by customers that they have to be producing something themselves in order to have the money to buy the imports.

    1. Jon Murphy

      Cuban exports include sugar & honey (53% of total exports and 5.7% of global trade in these commodities), Nickel (23% of exports), fish (6.8%), tobacco (5.6%), pharmaceutical (2.8%).

      1. Historically the sugar Islands (Cuba is one all be it not like Jamaica and Barbados) produced sugar and imported all other foods since the labor supply and in the case of Barbados the land, were used for sugar cultivation only, it being far more profitable to grow sugar than food. Interestingly what Cuba is doing should be celebrated on the international stage as it is specializing in what it does best and letting others do that which it has no competitive advantage.
        Calling it crony socialism is to say that Adam Smith was wrong when he said nations should concentrate on what the do best and buy the rest.

        1. re: ” Calling it crony socialism is to say that Adam Smith was wrong when he said nations should concentrate on what the do best and buy the rest.”

          yeah, but then you’d screw up a really good opportunity to use it as an example of crony socialism for those with than agenda!

          Now you’ve ruined their fun. what a buzz killer!

          ;-)

          1. Che is dead

            It’s quite telling that even when a “socialist utopia” manifests on a beautiful tropical island, like Cuba, you still can’t get useful idiots from Western countries, like you and Lyle, to move there.

            Come on, it’s everything that you say you want. Cuba is the exemplar of social and redistributive justice. And it’s in the middle of the Caribbean!

            I’ll tell you what, you agree to give up your U.S. passports and I’ll pay for you to leave. Deal?

          2. re: ” and I’ll pay for you to leave. Deal?”

            I’m not the one who is complaining Che… as usually you have things bass-ackwards… you habitual complainer types are the ones who should be considering leaving… to find YOUR utopia because obviously it’s not here!

            don’t let the door whack you on the way out…!

            ;-)

          3. Theodore Lopez

            I have yet to read the post so NB that, but “specialization” generally implies there is also some competitive advantage in producing good X but importing good Y. It may be that Cuba is particularly poorly suited for producing rice and butter and that the cheapest producers on the import market are in NZ and Vietnam. Considering my grandfather owned a successful diary farm in Cuba decades ago and Cuba’s sub-tropical climate seems suitable for growing rice I would suspect that whatever advantages Vietnam and NZ have over Cuba in producing these two products have less to do with soil quality, grazing land, weather, technology, and labor costs and more about, shall we say, institutional arrangements.

        2. Che is dead

          “Interestingly what Cuba is doing should be celebrated on the international stage as it is specializing in what it does best and letting others do that which it has no competitive advantage.” — Lyle

          “Cuba restructured its agricultural production – sugar and non-sugar – by breaking up state farms and creating smaller cooperatives. In the sugar sector, great emphasis was placed on relatively large cooperatives called UBPC’s for their Spanish name meaning Basic Units of Cooperative Production. Unlike smaller varieties of cooperatives that still had the participation of private farmers working lands they owned or once owned, UBPC’s derived from state farms. Workers and managers were given production incentives, but they had no original connection to the land.

          By 2000, fully 72 percent of sugar cane was grown in UBPC’s, and the results were not promising: Cuba’s average yield per hectare had dropped 38 percent in one decade, and according to the U.S. Department of Agriculture, per-pound production costs in the mid-1990’s were 50-70 percent above world market prices. As a Cuban expert described it, “the organizational changes in production have not adjusted sufficiently to meet the high costs and low market prices of the sector.”

          Meanwhile, conditions in the international marketplace virtually dictated that Cuba downsize its sugar industry.

          Cuban sugar production had fallen 56 percent between 1989 and 2002, and Cuba’s world rank as a cane producer fell from third to tenth.” — Cutting Losses: Cuba Downsizes Its Sugar … – Lexington Institute

          Yes, the Cuban communists are doing what all communists do best – murder and poverty.

  2. john pilling

    New Zealand produces 3/5 as much butter as the United States (the US is the largest producer of butter worldwide). New Zealand’s production is primarily for export, and its industry is one of the most efficient known. Maybe Cuba buys butter from New Zealand, because it’s the best deal they can get.

  3. Producing dairy products in the tropics is an expensive proposition. The real question is why they don’t import from a nearby area that has a surplus — like Virginia or Indiana. The embargo against Cuba isn’t involved, is it?

    1. Che is dead

      What embargo? The U.S. is one of Cuba’s largest trading partners.

      “… because of U.S. law; goods must be paid for in advance. “If you think about normal terms of trade, you have 30 days’ credit or 60 days’ credit. In the case of shipments from the U.S. to Cuba, Cuba has to pay for these goods before they leave the United States,” Brickman said. “If they don’t pay, the goods don’t go.” — CNBC

      Lifting the “embargo” would simply mean that U.S. taxpayers would shoulder the risk of extending Castro credit. No thanks.

      1. Maybe you should read the US government regulations with respect to the US goverment embargo. I apologize because the text is fairly dense, but the restrictions are to trade between the US and Cuba are clear and very restrictive.

        http://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba.txt

    2. Cuba buys from far away places because it receives long term credits. Purchases from the US are difficult because of the US regulations which make Cuba pay in cash upfront. The US Government does not allow US companies to extend any credit. And as for sugar….production is down because several years ago Fidel Castro closed all the Soviet inefficient, oil burning plants: it cost more to produce than to sell. Was simple business. Now prices are up and the sugar inductry is coming back. But it no longer is nor will it ever be again the leading economic driver in Cuba.

  4. Che is dead

    Cuban imports have been financed through trade facilities in the exporting nations. In the past, these nations have loaned Cuba billions of dollars with which to “purchase” their exports only to have Cuba repudiate these debts. This is why the U.S. insists that Cuba pay cash for U.S. exports, something that leftists and corporatists in this country have been trying to change for decades.

    “Cuba stopped payment on all its foreign commercial and bilateral debt with non-socialist countries in 1986.”disclosed U.S. International Trade Commission Report in 2001.

    “Debt talks between Cuba and the Paris Club of creditor nations are on hold. On the table was $3.8 billion of official debt to Paris Club members, part of a much larger debt Cuba ran up through the 1980s, until it began to DEFAULT on payments and then stopped talking with creditors.” Reuters, from back in June 2001.

    And remember, back then Cuba was getting $5 billiona year from the Soviet sugar-daddy.

    So what happened to that debt, you ask? Well, Fidel repudiated it too. “Soviet Union?” he frowns. “What Soviet Union?…Where is this Soviet Union?” No country by that name anymore, right? So how can I owe it any money?”

    In late 2006 France’s version of the U.S. Government’s (i.e., us taxpayers) Export-Import Bank, named COFACE, cut off Cuba’s credit line. Mexico’s Bancomex did likewise. This came about because the Castro regime stuck it to French taxpayers for $175 million and to Mexican taxpayers for $365 million, when these state-run banks had financed sales by some those nations’ politically-connected companies’ to Stalinist Cuba. Bancomex was forced to impound Cuban assets in three different countries in an attempt to recoup its losses.

    Early this year, one of the Cuban regime’s best friends, South Africa, was also compelled to bend over for the soap. Here’s part of the AFP story: “Given the assessment of Cuba’s debt position,” Said South African Minister, Themba Maseko, “we are of the view that Cuba was not in a position to meet its obligations in the foreseeable future.” Cuba stuck it to the Export Credit Insurance Corporation of South Africa (South African taxpayers) for $117 million, dating back to 1996.

    Last year, one of the world’s most respected economic forecasting firms, the London-based Economist Intelligence Unit, ranked Cuba as virtually the world’s worst country business-wise. Only Iran and Angola ranked lower. This firm predicts that Cuba’s abysmal business climate will remain that way for the next 3 years, at the very least.

    Dun & Bradstreet also rates Cuba among the world’s worst, right below Belarus. Moody’s rating is off the bottom of the chart as “very poor.” Standard & Poors refuses even to rate Cuba, regarding the economic figures released by the regime as utterly bogus. — “A Bailout for Castro Too?”

  5. “crony socialism” as if anything else has ever existed?

    not only is a socialistic utopia impossible to create, but so is the government that would create a socialistic utopia.

    One of the MAIN issues with socialism is the fact that leaders are incentivised to be despotic if nothing else, a governmental blueprint that self destructs is no proper foundation for a society.

  6. Benjamin Cole

    I detest the Cuban government.

    But is China government less “crony”?

    Why is Cuba always the butt of posts, but never China?

  7. Che is dead…but Fidel is alive.

  8. I suggest people read the original article at the link.

    The source article says that the ONLY reason these foods are bought from overseas is that the specific company in New Zealand, etc., involved in the export is owned by a Cuban government official. So the arrangement has nothing to do with competitiveness and everything to do with men in power getting money under the table.

    First get the facts straight. Then start an argument.

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