The Cuban economy

At the end of the 1950s, Cuba's economic structure was marked by serious technological lags and insufficient industrial development. The growth rates of production and investment were low, while income distribution displayed a notable bias towards concentration. Over the period from 1959 to 1989, the product grew at an average rate of around 4% per year and economic policy gave the State a leading role in the production of goods and services, with a marked predominance of planning over the market mechanisms in the regulation of economic activity. In this stage, the economy underwent far-reaching changes in its production bases, although many of the typical shortcomings of the Socialist countries were repeated: over-dimensioned projects, incorporation of obsolete or obsolescent technologies, and neglect of competitiveness. Thus, for three decades Cuba was on the sidelines of the enormous changes which were taking place in Western markets. Under its arrangements with the Socialist countries, the country had guaranteed markets for its exports, favourable terms of trade (although rather less so in the 1980s); and generous financing for its balance of payments. Albeit with flagrant cases of inefficiency, Cuba increased its stock of capital goods and expanded its physical infrastructure; increased the capacity of its dams; modernized its railway system, and built expressways, highways and rural roads. Progress was made in the electrification of the country, and heavy investments were made in the development of human resources, especially in the areas of health, education, culture and sport. The high social content of the economic policy made possible substantial advances in the provision of basic services for the population and the training of an increasingly skilled labour force.