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THE IMPACTS OF ECONOMIC REFORMS 1959 TO 1962 - Coggle Diagram
THE IMPACTS OF ECONOMIC REFORMS 1959 TO 1962
Castro aimed to make Cuba an economically independent and industrialized nation.
The US embargo, the economic dependence on the Soviets and the impact of the subsequent collapse of the USSR on Cuba helped shape Castro's different economic policies.
Che Guevara occupied the positions of the President of the National Bank of Cuba and later he became the Minister of Industries.
He favored a centrally planned economy, with an emphasis on moral incentives and self-sacrifice.
Moral incentives included socialist emulation, party membership and state recognition.
People should work for the ideas and values of the revolution rather than for personal gains.
All workers were to receive equal pay, overtime
Guevara aimed at creating a new consciousness, and with it a 'new man' prepared to sacrifice himself for a higher good (a society ruled by the principles of the revolution).
ECONOMIC PROBLEMS
Cuba's sugar industry suffered significant shrinkage on the world market.
The sugar refiners had failed to modernize their industry by mechanization and adequate investment.
US investment in Cuba's sugar production fell from 60% to 35%.
The decision of most of the industrial managers to leave Cuba when Batista was overthrown deprived Cuba of crucial expertise.
CASTRO'S ECONOMIC REFORMS
Large landowners were deprived of their land and the Agrarian Reform was created with the main purpose of breaking up the latifundias and 'returning the land to the people'.
The sugar industry was nationalized.
Subsidies were introduced in order to lower the rents and rates paid by the poor.
Cuts were made in imports of food and consumer goods.
Rationing was introduced to lessen food shortages.
DIVERSIFICATION
Castro’s plan to diversify the Cuban economy so that it would no longer be dependent on sugar was a failure by the mid-1960s.
The plan to develop industrial programmes as alternatives to sugar production had not been successful
The skilled personnel required for successful diversification were not available.
Cuba break economic ties with the US (it left Cuba to rely on the USSR for economic survival).
Cuba became a sugar-based, industrially inefficient economy with the only backing coming from the Soviet Union.
Most of the sugar canes were destroyed or ploughed up in preparing the soil for the new crops.
The unusually bad weather contributed disappointing sugar harvests.