1. Comment on what the U.S. embargo on Cuba meant to the country itself and what it meant to U.S. companies. What does the recent announcement by President Obama that restrictions would be eased imply for the country?
In the mid-20th century, the United States government placed a series of trade and travel restrictions against Cuba, collectively called the Cuban Embargo. The purpose of the Cuban Embargo was to fight the spread of communism in the Western Hemisphere, and to inspire Cuba's leaders to become more democratic and respectful of human rights. The Cuban Embargo has been controversial since its inception, but actions by the Obama administration that weakened the ban brought the debate back into the national spotlight.
The U.S. embargo against Cuba is a series of trade and travel restrictions enacted in response to the Cuban Revolution. The 1962 policy was intended to force Cuba into economic isolation and catalyze a popular movement toward overthrowing the Castro government. It is the longest-enduring trade embargo in history.
The economic embargo imposed in 1962 has had devastating effects on the Cuban economy. Trade between the United States and Cuba came to a standstill, and further restrictions added later prohibited companies in other countries from trading with Cuba as well, accelerating Cuba’s economic decline.
From an official Cuban source, the direct economic damages caused to Cuba by the US embargo since its institution would exceed 70 billion dollars. The damages include: I) the loss of earnings due to the obstacles to the development of services and exportations (tourism, air transport, sugar, nickel; II) the losses registered as a result of the geographic reorientation of the commercial flows, (additional costs of freight, stocking and commercialization at the purchasing of the goods); III) the impact of the limitation imposed on the growth of the national production of goods and services (limited access to technologies, lack of access to spare parts and hence early retirement of equipment, forced restructuring of firms, serious difficulties sustained by the sectors of sugar, electricity, transportation, agriculture); IV) the monetary and financial restrictions (impossibility to renegotiate the external debt, interdiction of access to the dollar, unfavorable impact of the variation of the exchange rates on trade, “risk-country”, additional cost of financing due to US opposition to the integration of Cuba into the international financial institutions); V) the pernicious effects of the incentive to emigration, including illegal emigration (loss of human resources and talents generated by the Cuban educational system); VI) social damages affecting the population (concerning food, health, education, culture, sports).
The biggest opening in U.S. relations with Cuba in more than half a century could be a boon for farmers, telecommunications firms and construction suppliers, but any broader economic impact is limited for now by...