The Caribbean's largest island, Cuba has widely cultivated lowlands which fall between three mountainous areas. The fertile soil of the lowlands supports the sugarcane, rice, and coffee plantations. Sugar, the country's major export, suffers from underinvestment, low yields, and fluctuating world prices. A former Spanish colony, Cuba in 1959 became the only communist state in the Americas. In 1962, the deployment of Soviet nuclear missiles on the island shocked the USA and brought the two superpowers close to war. Veteran president Fidel Castro is still very much in control, but, since the collapse of the USSR, the USA sees Cuba as less of a threat.

Ethnic tension in Cuba is minimal. About 70% of Cubans are of Spanish descent, mainly from the settlers, but also from the more recent influx of exiles from Franco's Spain. The black population is descended from the slaves and migrants from neighboring states, in particular Jamaica.

Living standards in Cuba fell dramatically in the early 1990s after the collapse of the east European communist bloc, previously its main trading partner, and rationing for most basic foodstuffs was introduced subsequently. The "dollarization" of the economy in recent years has led to great divisions between those who survive on pesos and the more than 50% of the population who have access to dollars. Since the early 1990s the number of those trying to leave, legally or otherwise, has risen markedly.

An increasing number of women are playing prominent roles in politics, the professions, and the armed forces. Child care facilities are widespread.

Strengths

Buoyant tourism attracts strong foreign investment. Major exporter of sugar and nickel. Premium Cuban cigars. Strengthening banking sector.

Weaknesses

Denied a major market and investment capital by US trade embargo. Acute shortage of hard currency. Vulnerability of sugar and nickel to world price fluctuations. Difficult terms of trade and weak legal framework deters investment. Infrastructure is deficient. Shortages of fuel, fertilizers, spare parts, and other inputs. Severe hurricane damage in 2001.

Profile

For a period after 1959, the state-controlled economy oscillated between concentration on sugar and stabs at industrialization. Total state control was reimposed in 1986 after a brief flirtation with the open market. The collapse of the USSR meant the loss of some $5 billion in annual aid and led to a deep recession in the early 1990s. A cautious adoption of some capitalist-style reforms in the mid-1990s, including the free use of the US dollar, stimulated the growth of a dollarized sector centered on tourism, which has attracted strong foreign investment. Tourism rather than sugar now dominates the economy, and benefits some 160,000 self-employed and small businesses. Foreign companies are also involved in joint ventures in banking and the oil and gas sectors. There is a very large informal sector. The government lost significant revenue from 2001 when Russia terminated the lease of its information-gathering center.

Fidel Castro has led Cuba since 1959 and founded its one-party communist system set out in the 1976 constitution.

Profile

The 1959 popular revolution, led by Castro, toppled the corrupt Batista dictatorship and launched a far-reaching program of social, economic, and political reforms.

In the 1990s the revolution seemed under siege in the wake of the collapse of the Soviet Union and tightened trade sanctions by the USA. Supporters continue to see Cuba as living proof of the triumph of socialist development over adversity, but critics view the Castro administration as an intolerant dictatorship.

Main Political Issues

The succession

The aging Fidel Castro remains firmly in place but who will be his successor is a major issue. Some predict that a younger, collective, and reform-minded leadership would normalize relations with the USA and steer Cuba toward Western-style democracy. Others warn that Castro's departure could lead to a power vacuum, vulnerable to social unrest and internal divisions between reformers and communist hard-liners.

Democracy

The trial in 1999 of four moderate dissidents was part of a tough clampdown on internal opposition. This has reduced hopes for the type of opening seen in the economic sphere and threatens diplomatic and economic ties. It offers the USA justification for its trade embargo.

Since the 1959 revolution, and particularly after the 1962 stand-off over Soviet missiles, the USA has considered Cuba a danger. The US trade blockade, first imposed in 1961, has left Cuba economically isolated despite regular votes in the UN condemning sanctions. The end of Soviet aid in the 1990s was another serious blow to Castro's embattled regime, but has forced Cuba to soften its anti-Western stance in the search for alternative aid. Partly as a result, the US embargo has been progressively loosened since 1999 and now allows for more flights, direct mail, essential medicines, and more food imports.

Ties to Russia have been diluted further but relations with the USA remain fraught, despite the arrival in 2001 of the first direct trade between the two countries' governments, in the form of emergency aid. In 2002 the USA included Cuba in its "axis of evil" terrorist-sponsoring states. Relations with Europe are now improving, after being dented over the treatment of dissidents.

From 1959 to the 1980s, Cuba's efficient military, well represented in the Council of Ministers and the Politburo, was one of the achievements of the revolution. Under Castro's brother Raúl, it succeeded in repelling the US-sponsored Bay of Pigs invasion in 1961, and saw effective action in Africa in the 1970s, preventing South Africa from taking control of Angola, and Somalia from occupying the Ogaden region in Ethiopia.

Today, with communist regimes collapsed around the world, it has lost much of its prestige. Russia is still the main source of arms. A siege mentality associated with the US economic embargo keeps the military on the alert for perceived internal and external threats.

The collapse of the USSR precipitated a steep decline in sugar production, which reached a 50-year low in 1998.

Cuba seeks to expand nickel and cobalt production, traditionally its biggest merchandise exports, assisted by private mining ventures. Several foreign companies are prospecting for gold, silver, and other metals, and for heavy crude oil and gas, through concessions. Work at Juraguá on a Russian-built nuclear reactor was abandoned in December 2000.

At the time of the revolution in 1959, only 14% of the country's forest cover remained, but a strong drive to replant has raised the tree cover level to over 20%. The intensive use of irrigation without adequate drainage has caused salinization and waterlogging. There is regional concern about the never-completed nuclear reactor at Juraguá.

Public transportation in Cuba has been extremely cheap, although fuel shortages have made it increasingly erratic and unreliable. Cubans rely mostly on traditional black bicycles, imported by the thousand from China. Havana owes much of its charm to the number of 50-year-old Chevrolets and Oldsmobiles still being driven around. This is another result of sanctions, but keeps the many inventive local spare-parts workshops in business.

Spending on health accounted for around 10% of government expenditure in the late 1990s. Average life expectancy in Cuba is among the highest in Latin America, which is a reflection of its efficient, countrywide health service. The US trade embargo has led to shortages of hospital equipment and raw materials for drugs. The latter are normally supplied by Havana's sizable pharmaceuticals industry. Cuba's advanced surgery techniques attract patients from overseas.

Education, which is universal and free at all levels, combines academic with manual work, in line with Marxist–Leninist principles. The high priority given to education under Castro, which is reflected in the high literacy rate, is now being promoted to attract foreign investment in high-tech industries, particularly biotechnology. Spending on education was increased in the late 1990s to around 11.5% of the budget.

Violent crime is officially viewed as a threat to national stability. In 1999 the penal code was amended to extend the death penalty to certain drug offenses, robbery involving firearms, attacks on security officers, and sexual corruption of minors. Widening inequality has led to growing crime, especially theft from within state factories. The US base at Guantánamo Bay houses a prison for suspected members of the al-Qaida terrorist network.

Under Batista, there were huge wealth disparities, and Cuba was a playground for the rich. The 1959 revolution succeeded in reducing the disparities, partly by taking over all businesses, from oil companies to barbers' shops, and partly by prescribing not only minimum but also maximum wages. Economic regulations have varied since then; for a brief period in 1985, different wage rates were allowed in an attempt to provide incentives for hard workers, but this decision was reversed in 1986. Economic liberalization in the mid-1990s has created a large gulf between the half of the population with access to US dollars and those left in the peso economy who have to subsist on lower salaries.

Tourism began to develop after 1977 (when the USA relaxed some travel restrictions), and Cuba is now among the Caribbean's most popular destinations. Tourism has supplanted sugar as the most important motor of the economy and largest generator of foreign exchange. Official estimates are that the number of arrivals will rise to more than five million by 2010. The government seeks to promote family tourism by cracking down on prostitutes who target Havana's main hotels.

Originally inhabited by the Arawak people, Cuba was claimed for Spain by Columbus in 1492. Development of the sugar industry from the 18th century, using imported slave labor, made Cuba the world's third-largest producer by 1860.

• 1868 End of the slave trade.
• 1868–1878 Ten Years' War for independence from Spain.
• 1895 Second war of independence. Thousands die in Spanish concentration camps.
• 1898 In support of Cuban rebels USA declares war on Spain to protect strong American financial interests in Cuba.
• 1899 USA takes Cuba and installs military interim government.
• 1901 USA is granted intervention rights and military bases, including Guantánamo Bay naval base.
• 1902 Tomás Estrada Palma takes over as first Cuban president. USA leaves Cuba, but intervenes in 1906–1909 and 1919–1924.
• 1909 Liberal presidency of José Miguel Goméz. Economy prospers; US investment in tourism, gambling, and sugar.
• 1925–1933 Dictatorship of President Gerardo Machado.
• 1933 Years of guerrilla activity end in revolution. Sgt. Fulgencio Batista takes over; military dictatorship.
• 1955 Fidel Castro exiled after two years' imprisonment for subversion.
• 1956–1958 Castro returns to lead a guerrilla war in the Sierra Maestra.
• 1959 Batista flees. Castro takes over; brother, Raúl, is deputy; Che Guevara third in rank. Wholesale nationalizations; Cuba reorganized on Soviet model.
• 1960 USA breaks off relations.
• 1961 US-backed invasion of Bay of Pigs by anti-Castro Cubans fails. Cuba declares itself Marxist–Leninist. US economic and political blockade.
• 1962 Missile crisis: Soviet deployment of nuclear weapons in Cuba leads to extreme Soviet–US tension; war averted by Khrushchev ordering withdrawal of weapons.
• 1965 Che Guevara resigns to pursue foreign liberation wars. One-party state formalized.
• 1972 Cuba joins COMECON (communist economic bloc).
• 1976 New socialist constitution. Cuban troops in Angola until 1991.
• 1977 Sends troops to Ethiopia.
• 1980 125,000 Cubans, including "undesirables" (criminals or people with learning disabilities), flee to USA.
• 1982 USA tightens sanctions and bans flights and tourism to Cuba.
• 1983 US invasion of Grenada. Cuba involved in clashes with US forces.
• 1984 Agreement with USA on Cuban emigration and repatriation of "undesirables" is short-lived.
• 1986 Soviet-style glasnost rejected.
• 1988 UN's second veto of US attempt to accuse Cuba of human rights violations. Diplomatic relations established with EC.
• 1989 Senior military executed for arms and narcotics smuggling.
• 1991 Preferential trade agreement with USSR ends. Severe rationing.
• 1992–1993 USA tightens blockade. All former Soviet military leave.
• 1994–1995 Economic reforms to boost foreign trade and investment.
• 1996 US Helms-Burton Act tightens sanctions.
• 1998 Visit of Pope John Paul II.
• 1999 Leading moderate dissidents put on trial.
• 2001 Devastation by Hurricane Michelle, strongest storm in 50 years.
• 2002 Guantánamo Bay used as high-security prison for captives from US "war on terrorism."