Comparison of Cuba and Peru

Background

Cuba

Cuba is most known for it’s communistic ties to the Soviet Union since 1959 and its many run-ins with the United States regarding their political views. Under Fidel Castro, their dictator, the country has seen many different socialist systems implemented to best reach their goal. Initially, the government set out to turn the economy from being dependent on sugarcane export to industrialization; this however failed and was reversed. (Britannica online)

From 1976 to 1985 Cuba had a market that most resembled the Soviet Union’s. This lead to some difficulties following the collapse of the Soviet Union. In 1986 Castro introduced the Rectification Process (RP) to try to improve the economy and reduce corruption. (Mesa-Lago pp. 140-150) These RP’s were unsuccessful and eventually lead to more economic troubles. Following the Soviet Union’s collapse, Cuba lost their biggest import/export partner. In 1992, Cuba lost all aid provided by the Soviet Union. They were also in debt to Germany and other former socialist states. This has had a major impact and exact numbers have been hard to calculate the exact losses.

Peru

Peru’s first economic change occurred in 1948 following a coup that saw the emergence of a new government. This government allowed a laissez-faire framework until 1968 and was quoted as “ …the freest economy in South America.” (Thorp and Bertram, pp. 257) The growth that took place under this system was done rather haphazardly. It involved very little planning and let the economy run rampant and had little success with much failure. To remedy all the problems Peru was facing, they tried to nationalize the market in the 1960’s and 1970’s. Along with the nationalization came debt that the Peruvian’s were unable to overcome. This forced the government to privatize some of the market.

Key Events

Cuba

From 1902 to 1958 Cuba saw a political system that was corrupt and unfair. The Republic of Cuba, as it was recognized, had a series of laws against different races. Some people found this to be unfair and decided to do something. Fidel Castro was the man who essentially set up the coup that leads to the installation of the Communist system. His first couple years in power Castro worked to dissolve the capitalist system and to develop a series of bureau’s and organizations. One of the many organizations was the introduction of central planning for Cuba.

Peru

Throughout Peru’s independent history, we have seen a number of new leaders who came to power either through force or election. Whatever the case may be, each leader promised quick fixes and economic prosperity. When these men failed to provide the people with a strong economy, they were thrown out of office. Most notably was the termination of the Velasco Regime. This group provided Peru with new, strong economic ties with Japan, Yugoslavia, and other developed nations. All of which strengthened the Peruvian economy. When the economy slowed down, Velasco was immediately thrown out of power.

Following the Velasco Regime, Francisco Morales Bermudez introduced a new government, one that utilized a constitution. Since he has come to power in June of 1978, his system has remained as the governing system of Peru. During this time, Peru has seen high inflation, guerrilla warfare, and a high amount of drug trafficking. They have also been threatened by the IMF that no future loans will be issued to them for their inability to repay loans.

Comparison by Stats

Cuba

Cuba is a country about 2.2 miles south of the southernmost tip of Florida. Its capital is Havana and there is a president, Fidel Castro, who leads the country. The currency is a Cuban peso. One US dollar is equal to approximately 23CUP. In a 1998 census, it was revealed that the population totaled about 11.8 million people. The urban population makes up 76% and the rural population is 24%. The average life expectancy’s for males is 72.8 years and 77.7 years for females.

Peru

A President who is assisted by a Prime Minister makes up Peru’s government of a unitary multiparty republic with one legislative house lead. The currency is a Nuevo sol and in 1998 $1=3.04S. Peru’s population nearly doubles that of Cuba’s with 24.8 million people. Peru’s population consists of 71.2% urban while 28.8% are from rural areas. The life expectancy for the average Peruvian male is 65.9 years while females enjoy a life expectancy of 70.9 years.

Similarities

These countries have many similarities. Most of which will be explored through our economic scope. The urban/rural population distribution is almost identical. This is partially due to the distribution of employment. Although these countries have different exports, they still are developing countries with an emphasis on agriculture

Economic Comparisons

Cuba

Because of Cuba’s political system, it is hard to accurately determine exact numbers. They are usually outdated and reported from a 1982 study. The average income per household in 1982 was $4,330. The economy focuses on the export of sugarcane (40M tons) and other exports that are far insignificant in comparison to sugar. These include potatoes, oranges, grapefruits, bananas, rice, and livestock.

Cuba’s exports round out to about 1.8 billion dollars in 1992. The most heavily exported was sugarcane at 63.4% followed by minerals and concentrates with 10.6%, and lastly tobacco and fish products making up a combined 12%. The main exports are to: Russia, Canada, the Netherlands, and China.

Cuba imports approximately 3 billion dollars of product s in 1992. They include mineral fuels and lubricants 39.4%, food and live animals25.4%, and machinery and transport equipment 15.8%. The major importers are: Spain, Russia, Mexico, France, Canada, and Argentina. (All statistical information provided by Britannica Online)

Peru

Peru reported the average income per family to be $2,173 in 1988. The country gears its production in sugarcane 6.6 million tons, potatoes 2.2million tons, rice, plantains, and corn each with a million tons.

Peru exports nearly $5 billion of products a year. The biggest export is copper and copper products 23%, fish meal fodder 13.3%, zinc, coffee, lead products, and clothing accessories totaling about 20%. Because Peru is a developing country, the economy is geared to provide raw materials prepared for developing countries. The country’s they export to most are: the US, Japan, China, Germany, the Netherlands, Italy, and Brazil.

Peru imports nearly $7.6 billion of products a year. The top imports include raw and intermediate materials 31.2%, machinery 22.7%, transport equipment 14.8%, and consumer goods 12.1%. An interesting fact that we see is that Peru is practically self sufficient on food and imports very little. As mentioned earlier, they produce materials for developed nations and import tools to aid this. The country’s Peru imports from are: The US, Colombia, Japan, and Brazil.

Similarities

The similarities we see in these countries are quite similar. Both countries, regardless of economic system, are still developing. Therefore they rely heavily on agriculture and raw materials as exports. We have seen that both countries import the same kinds of goods. These imports are mainly finished goods from the developed or advanced countries.

Bibliography

1) Cuba After the Cold War, Mesa-Lago, Carmelo (Editor); Pittsburgh, PA; 1993, University of Pittsburgh Press.

2) The Economy of Socialist Cuba, Mesa-Lago, Carmelo; Albuquerque, NM; 1981; Library of Congress Cataloging in Publication Data.

3) Peru: 1890-1977, Thorp, Rosemary; Bertram, Geoffrey; New York, NY; 1978; Columbia University Press.

4) Communism in Central America; Wesson, Robert; Stanford, CA; 1982, Hoover Institution Press.

5) Britannica Online