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Cuba "updates" its economic model: perspectives for cooperation with the European Union
Kuba "aktualisiert" sein Wirtschaftsmodell: Perspektiven für die Zusammenarbeit mit der EU
[working paper]
Corporate Editor
Stiftung Wissenschaft und Politik -SWP- Deutsches Institut für Internationale Politik und Sicherheit
Abstract Following the thawing of relations with the United States under Obama, Cuba is now seeking closer integration into the global economy through a programme of "guidelines" for updating the country’s economic model adopted in 2011. The central goals are increasing exports, substituting imports and enco... view more
Following the thawing of relations with the United States under Obama, Cuba is now seeking closer integration into the global economy through a programme of "guidelines" for updating the country’s economic model adopted in 2011. The central goals are increasing exports, substituting imports and encouraging foreign direct investment in order to improve the country’s hard currency situation, increase domestic value creation and reduce dependency on Venezuela. The guidelines also expand the space for private business activity, for example legalising "self-employment". In this context, Cuba also wants to strengthen economic relations and political dialogue with the EU - its most important trading partner after Venezuela - on the basis of the EU-Cuba Dialogue and Cooperation Agreement of 2016. But the broader perspective for cooperation will depend heavily on whether Cuba succeeds in advancing and consolidating its economic reforms. The economy remains tightly state-managed, creating disincentives for internal actors and external investors alike. The restrictions arise from the political/military elite’s wish to retain control over the development course and secure its own power base. As such, great tensions exist between the political situation and the government's external economic objectives. Cuba's agreements with international partners will only bear fruit if the internal framework can be improved. The EU and Germany should use the political dialogue to encourage Havana to pursue the requisite reforms. (author's abstract)... view less
Keywords
Cuba; international economics; economic relations; political relations; EU; economic agreement; economic reform; trade policy; developing country; Caribbean Region
Classification
Economic Policy
International Relations, International Politics, Foreign Affairs, Development Policy
Document language
English
Publication Year
2017
City
Berlin
Page/Pages
28 p.
Series
SWP Research Paper, 6/2017
ISSN
1863-1053
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications