The political economy of Cuban dependence on the Soviet Union

Kosmas Tsokhas
1980 Theory and society  
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more » ... ntervention in the Third World in terms of imperialism. Corporate investment and economic aid have been and have been seen as instruments of control. It has been argued that the historical relationship between a metropole such as the United States and its neo-colonies, including many Latin American countries, has been asymmetric and characterized by dependence and exploitation. This paper will look at the case of Soviet-Cuban relations in terms of dependency theory, in the period to 1973. Distinctions will be drawn between Cuba's relations with America and the new dependency with the Soviet Union. In the process it will be possible to grasp the specificity of dependence on the USSR. The article is divided into three main sections. First, there will be a discussion of the economic subordination of Cuba to the USSR. Emphasis will be given to the role of sugar in Cuba's exports and the failure to develop a diversified and self reliant economy. Second, we will look at the adoption by Cuba of the Soviet model of planning, calculation, and organization in the economy. In the final section the history of the ideological and political differences between Havana and Moscow will be dealt with. In addition, there will be a survey of the abandoning of the "Cuban road" and the emergence of a new Soviet-Cuban ideological and diplomatic alliance against the rivals of the Soviet Union, especially China. The history of the Cuban revolution will be portrayed as a slide from independence, through interdependence, to dependence on the USSR. Economic dependence does not imply in this case, however, that the USSR is primarily interested in the economic returns which can be obtained. Rather, the Soviet ruling circles are motivated by the political and ideological uses of a Cuban proxy. It was necessary to have a strong grip PM All use subject to JSTOR Terms and Conditions 320 over the productive resources of Cuba before such compliance could be assured. However, the Cuban regime entered into its alliance with Moscow from a position of considerable strength. Cuba had asserted its independence from the United States and, although she was becoming increasingly reliant on the Soviet Union, often did so on her own terms. It will be shown that although the Soviet Union was able to manipulate economic, military, and diplomatic resources it controlled in order to modify to varying degrees the behavior of the Cuban government, this did not imply that the USSR enjoyed absolute power. In fact, the Cubans enjoyed a greater degree of autonomy from the Soviet Union than from the United States. This partially explains the undeniable improvement in living standards for the majority of the Cuban population: improvements in health, access to education and the reduction of illiteracy, a decline in infant mortality rates and falls in seasonal unemployment. As far as the relations of production were concerned, however, the turn to the Soviet model did stimulate a growth in the division between mental and manual labor, between management and labor. Unlike the US in Cuba, Soviet economic and military aid were not mechanisms by which the metropole obtained control over domestic policy and decision making processes. It will be argued that the Soviet Union and Havana formed an alliance. The USSR did attempt to co-opt the Cuban regime through the use of the inducement of diplomatic support, military, and economic aid, or the threat of withholding these resources, to obtain the compliance of its client with Soviet policies. The relations that developed were based on bargaining between patron and client, for the client also controlled resources desired by the Soviets. This emerged most clearly at the time of the missile crisis. Bargaining power was variable and contingent on the nature of the issues and the particular circumstances. Despite the continuing relative autonomy of Cuba, however, the drift of history was in favor of the USSR. When the ratio of foreign to domestic economic and military transactions was high and concentrated, when foreign markets and imports of capital, technology, and military equipment were narrowly distributed in the direction of one metropole, the USSR and its East European allies, and the client had little opportunity to replace the patron by one of its rivals or to dispense with the resources controlled by the USSR, a situation of unequal power existed in favor of the metropole. Castro admitted as much. As a consequence the Soviet ruling circles were able to modify economic policy and diplomacy. The following mechanisms of Soviet imperialism will be discussed: the creation This content downloaded from on Fri, 7 Jun 2013 15:56:23 PM All use subject to JSTOR Terms and Conditions This content downloaded from on Fri, 7 Jun 2013 15:56:23 PM All use subject to JSTOR Terms and Conditions 322 primacy given sugar production, with the Soviet Union being the main export market; second, a demonstration of the Soviet influenced abandonment of economic diversification and self-reliance and how it was replaced by the "socialist division of labor," and third, an exploration of the implications of Cuba's mounting indebtedness to the USSR. The return to sugar The first cause of the abandonment of Cuba's plans for economic diversification and industrialization was the deteriorating trade balance. In 1963 Cuba's trade balance was three times worse than in the period 1960-62. These balance of payments problems were due to imports of foodstuffs and consumer goods which far outweighed exports. One solution was to cut back imports, but this could not be done. Over half of Cuba's $600-700 million imports consisted of petroleum products, raw materials, and spare parts for industry. Plants producing consumer goods were especially dependent on imports of raw materials, which could not be found in Cuba, and parts for machinery.2 This content downloaded from on Fri, 7 Jun 2013 15:56:23 PM All use subject to JSTOR Terms and Conditions This content downloaded from on Fri, 7 Jun 2013 15:56:23 PM All use subject to JSTOR Terms and Conditions 325 self-sufficiency and greater industrial diversification also had to be postponed. Despite the trade balance in its favor the Soviet Union increased its exports to Cuba in the period 1964-68. Cuba was dependent on the USS R for supplies of petroleum, sulphur, asbestos, fertilizers, and equipment, including trucks, automobiles, and metal cutting lathes. Implications of sugar's new role The first implication was that Cuba would produce a single crop, sugar, and the USSR, complex industrial items. This is an example of the classical division of labor between periphery and metropole, and was embodied in trade agreements. The long-term trade agreement signed with the Soviet Union in January 1964 allowed for the export of 24 million tons of sugar in 1965-70 at 6.11 cents per pound, fixed price. Soviet payment was to be in terms of industrial goods and raw materials exported to Cuba. The emphasis would be more accurate to say that Cuba's sugar exports were partial payment for imports from the USSR, because Cuba's debt and trade deficit vis-a-vis the Soviet Union was so great.20 In turn, these arrangements delimited Cuba's capacity to earn foreign exchange, for unless a surplus was produced over and above that needed to pay the debt to the USSR, little sugar could be exported to convertible currency areas.
doi:10.1007/bf00207281 fatcat:pwypdv26nfbppnohxuoh24rybu