Comparison of Development
...cultural land was set aside for sugar yet if the market showed signs of being full as much as 40% of the land could be left unused any given year. On top of this many landless urban peasants relied on the three months of work to get by. It was this extreme situation that led to the 1960 coup bringing Fidel Castro and his team of revolutionaries to power. The socialist nature of the new government and the broken ties to the United States lead to policies focused on independent functioning of Cuba and following the soviet economic reform model. In many ways these reforms mirrored ISI programs being set up around the ‘developing’ world at that time; however, one main difference was they were internally instituted with no influence from the IMF. Main focuses were on diversifying production away from just sugar and Industrialization. By 1964 the Castro administration decided there was need to make reforms more gradual and so they put major industrialization to the side, returned to mass sugar production as a main source of income, and turned to a new model of economic organization. The Mao-Guevara plan sought to create a ‘new man’ who’s high morals and hard work for the greater good of society would allow for the “…elimination of the market or the law of supply and demand.”(Mesa-Lago, pp. 18) To achieve this goal emphasis was placed on education, mobilization through rallies and awards, and state provided free services where all citizens benefited. It was believed possible to skip right out of capitalism, bypass socialism and go strait into Communism if the if the population formed a collective consciousness toward the common good. By 1970 Castro re-evaluated this system. It was evident that the New Man was not emerging with such situations as a diminishment of work ethic and enrollment in education being 1/12th of what it was in 1965 (Mesa-Lago, pp. 24). The new plan was more realistic, seeing effective socialism as an important stepping stone toward the formation of a true communist state. The seventies also saw an increase in educated economists entering the government thus resulting in more effective policies (Mesa-Lago, pp. 27). One such policy was the first five-year plan, based on the soviet model of development, implemented in 1976. It recognized the importance of supply and demand during the transitional stage and gave enterprises greater freedom and financial responsibility (Mesa-Lago, pp. 29). However, the movement toward communism was largely stopped there. By 1984 the soviet plan had exhausted the economy and Castro began to institute fundamental changes through PRENT (the Process of Rectification of Negative Tendencies). Cuba opened to international forces by such methods as allowing foreign direct investment. Like the earlier protectionism being a form of ISI this could be seen as Cuba’s own Structural Adjustment Program. The economy was sustained for a short time until during late 80’s, in conjunction with the fall of the Soviet Union, the GDP began to fall, as much as 35% by 1993. Austerity measures which legalized foreign currency, expanded self-employment, and reduced the deficit began to raise the GDP again. Cuba now sits in a precarious position with its leader aging and the global economic vultures circling to get in control. Yet by looking at the situation from a non-western view on development it can be argued that the Cuban system created a much more developed nation than the system those vultures have installed elsewhere. An astonishing socialist approach that aims to redistribute the wealth has created a very egalitarian society. Like Cuba, Argentina has not molded into many of the criteria for development over the last half century. Starting around 1860 Argentina began to experience remarkable growth that wasn’t effected until the depression of the thirties where it was isolated from foreign exchange and forced to pursue a new more independent direction. This continued through the Second World War and industrialization was heightened to substitute the lack of supplies from abroad. Also present in this period was a change in fiscal policies with a focus on public works and the beginnings of the public debt. This isolation from world affairs rose Argentina to be among the most developed nations in the world. However, the decisions to retain this difference and stay separate from the regular global economic methods lead to a series of problems in the future. In 1946 the charismatic military officer, Peron took power of the nation using a socialist yet corrupt approach. He continued to increase funding to social services and salaries while keeping prices low ensuring mass consumption of goods (Alemann pp. 20). He promoted import substitution with industrialization (ISI) to diversify production, improve distribution of wealth, and escape foreign dependency by developing the nation from within. This strange mix of Structuralist and dependency thinking was completely focused on going against the grain and remaining independent. A good example is demonstrated by Peron’s 1947 decisions not to participate in the GATT and his complete rejection of the New International Economic Order promoting more equality between rich and poor nations. Indeed Arge...