History of Cuba

History of Cuba

Colonial Rule: The history of Cuba began with the arrival of Christopher Columbus in 1492 and the subsequent invasion of the island by the Spaniards. Aboriginal groups—the Guanahatabey, Ciboney, and Taíno—inhabited the island but were soon eliminated or died as a result of diseases or the shock of conquest. Thus, the impact of indigenous groups on subsequent Cuban society was limited, and Spanish culture, institutions, language, and religion prevailed. Colonial society developed slowly after Spain colonized the island in the sixteenth and seventeenth centuries; pastoral pursuits and agriculture served as the basis of the economy. For the first three centuries after the conquest, the island remained a neglected stopping point for the Spanish fleet, which visited the New World and returned to Spain with the mineral wealth of continental America.

Cuba awakened dramatically in the nineteenth century: The growth of the United States as an independent nation, the collapse of Haiti as a sugar-producing colony, Spanish protective policies, and the ingenuity of Cuba’s Creole business class all converged to produce a sugar revolution on the island. In a scant few years, Cuba was transformed from a sleepy, unimportant island into the major sugar producer in the world. Slaves arrived in increasing numbers; large estates squeezed out smaller ones; sugar supplanted tobacco, agriculture, and cattle as the main occupation; prosperity replaced poverty; and Spain’s attention replaced neglect. These factors, especially the latter two, delayed a move toward independence in the early nineteenth century. While most of Latin America was breaking with Spain, Cuba remained loyal.

The Independence Struggle and Beginning of U.S. Hegemony: Toward the end of the nineteenth century, Cuban loyalty began to change as a result of Creole rivalry with Spaniards for the governing of the island, increased Spanish despotism and taxation, and the growth of Cuban nationalism. These developments combined to produce a prolonged and bloody war, the Ten Years’ War against Spain (1868–78), but it failed to win independence for Cuba. At the outset of the second independence war (1895–98), Cuban independence leader José Martí was killed. As a result of increasingly strained relations

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Figure: Cristóbal Colón (Christopher Columbus) claims the New World. On 27 October 1492 Columbus sighted Cuba, he named the island Juana

between Spain and the United States, the Americans entered the conflict in 1898. Already concerned about its economic interests on the island and its strategic interest in a future Panama Canal, the United States was aroused by an alarmist “yellow” press after the USS Maine sank in Havana Harbor on February 15 as the result of an explosion of undetermined origin. In December 1898, with the Treaty of Paris, the United States emerged as the victorious power in the Spanish-American War, thereby ensuring the expulsion of Spain and U.S. tutelage over Cuban affairs.

On May 20, 1902, after almost five years of U.S. military occupation, Cuba launched into nationhood with fewer problems than most Latin American nations. Prosperity increased during the early years. Militarism seemed curtailed. Social tensions were not profound. Yet corruption, violence, and political irresponsibility grew. Invoking the 1901 Platt Amendment, which was named after Senator Orville H. Platt and stipulated the right of the United States to intervene in Cuba’s internal affairs and to lease an area for a naval base in Cuba, the United States intervened militarily in Cuba in 1906–9, 1917, and 1921. U.S. economic involvement also weakened the growth of Cuba as a nation and made the island more dependent on its northern neighbor.

Rising Authoritarianism (1901–1930s): The 1930s saw a major attempt at revolution. Prompted by the cruel dictatorship of Gerardo Machado y Morales (president, 1925–33), the economic hardships of the world depression, and the growing control of their economy by Spaniards and North Americans, a group of Cubans led by students and intellectuals sought radical reforms and a profound transformation of Cuban society. Following several small army revolts, Machado was forced to resign and flee the country on August 12, 1933. Sergeant Fulgencio Batista y Zaldívar, unhappy with proposed reductions of pay and restrictions of promotions, joined forces with the militant students on September 4 and overthrew the U.S.-backed regime of Carlos Manuel de Céspedes (the younger). By making the military part of the government and allowing Batista to emerge as self-appointed chief of the armed forces, the Sergeants’ Revolt marked a turning point in Cuba’s history. On January 14, 1934, Army Chief Batista also brought to an end the short-lived provisional presidency of Ramón Grau San Martín (president, 1933–34) by forcing him to resign. Although the reformers attained power five months later and Machado’s overthrow was supposed to mark the beginning of an era of reform, their revolution failed. Batista (president, 1940–44; dictator, 1952–59) and the military emerged as the arbiters of Cuba’s politics, first through de facto ruling and finally with the election of Batista to the presidency in 1940.

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The end of the early Batista era: during World War II was followed by an era of democratic government, respect for human rights, and accelerated prosperity under the inheritors of the 1933 revolution—Grau San Martín (president, 1944–48) and Carlos Prío Socarrás (president, 1948–52). Yet political violence and corruption increased. Many saw these administrations of the Cuban Revolutionary Party (Partido Revolucionario Cubano—PRC), more commonly known as the Authentic Party (Partido Auténtico), as having failed to live up to the ideals of the revolution. Others still supported the Auténticos and hoped for new leadership that could correct the vices of the past. A few conspired to take power by force.

The Rise of Fidel Castro: Batista’s coup d’état on March 10, 1952, had a profound effect on Cuban society, leading to doubts about the ability of the Cubans to govern themselves. It also began a brutal right-wing dictatorship that resulted in the polarization of society, civil war, the overthrow of Batista, and the destruction of the military and most other Cuban institutions. Fidel Castro Ruz, a charismatic, anti-U.S. revolutionary, seized power on January 1, 1959, following his successful revolt against the U.S.-backed Batista government. As the Castro regime expropriated U.S. properties and investments and began, officially, on April 16, 1961, to convert Cuba into a one-party communist system, relations between the United States and Cuba deteriorated rapidly. The United States imposed an embargo on Cuba on October 19,1960, and broke diplomatic relations on January 3, 1961, in response to Castro’s expropriations without compensation and other provocations, such as arrests of U.S. citizens. The failure of the Central Intelligence Agency (CIA)–sponsored invasion by Cuban exiles in April 1961 (the infamous Bay of Pigs invasion) allowed the Castro regime to destroy the entire Cuban underground and to emerge strengthened and consolidated, basking in the huge propaganda value of having defeated the “Yankees.”

The Cold War Period: Tensions between the two governments peaked during the Cuban Missile Crisis of October 1962 after the United States revealed the presence of Soviet missiles in Cuba. Following the imposition of a U.S. naval blockade, the weapons were withdrawn and the missile bases dismantled, thus resolving one of the most serious international crises since World War II. A U.S.-Soviet agreement that ended the Cuban Missile Crisis assured Cuba’s protection from military attack by the United States

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Ernesto "Che" Guevara (14 June 1928 – 9 October 1967) a key figure of the Cuban Revolution in his struggle against monopoly capitalism, neocolonialism, and imperialism.

Cuba’s alliance with the Soviets provided a protective umbrella that propelled Castro onto the international scene. Cuba’s support of anti-U.S. guerrilla and terrorist groups in Latin America and other countries of the developing world, military intervention in Africa, and unrestricted Soviet weapons deliveries to Cuba suddenly made Castro an important international contender. Cuba’s role in bringing to power a Marxist regime in Angola in 1975 and in supporting the Sandinista overthrow of the dictatorship of Nicaragua’s Anastasio Somoza Debayle in July 1979 perhaps stand out as Castro’s most significant accomplishments in foreign policy. In the 1980s, the U.S. military expulsion of the Cubans from Grenada, the electoral defeat of the Sandinistas in Nicaragua, and the peace accords in El Salvador and Central America showed the limits of Cuba’s influence and “internationalism” (Cuban missions to support governments or insurgencies in the developing world).

A Continuing Cuban-U.S. Cold War: The collapse of communism in the early 1990s had a profound effect on Cuba. Soviet economic subsidies to Cuba ended as of January 1, 1991. Without Soviet support, Cuba was submerged in a major economic crisis. The gross national product contracted by as much as one-half between 1989 and 1993, exports fell by 79 percent and imports by 75 percent, the budget deficit tripled, and the standard of living of the population declined sharply. The Cuban government refers to the economic crisis of the 1990s and the austerity measures put in place to try to overcome it euphemistically as the “special period in peacetime.” Minor adjustments, such as more liberalized foreign investment laws and the opening of private (but highly regulated) small businesses and agricultural stands, were introduced. Yet the regime continued to cling to an outdated Marxist and caudillista (dictatorial) system, refusing to open the political process or the economy.

The traditional Cold War hostility between Cuba and the United States continued unabated during the 1990s, and illegal Cuban immigration to the United States and human rights violations in Cuba remained sensitive issues. As the post-Soviet Cuban economy imploded for lack of once-generous Soviet subsidies, illegal emigration became a growing problem. The 1994 balsero crisis (named after the makeshift rafts or other unseaworthy vessels used by thousands of Cubans) constituted the most significant wave of Cuban illegal emigrants since the Mariel Boatlift of 1980, when 125,000 left the

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Very busy Fidel. Fidel Alejandro Castro Ruz (born 13 August 1926) was until July 2006 Cuba's President of the Council of state, Commander in Chief of the armed forces, President of the Council of Ministers, and First Secretary of the Cuban Communist Part

island. A Cuban-U.S. agreement to limit illegal emigration had the unintended effect of making alien smuggling of Cubans into the United States a major business.

In 1996 the U.S. Congress passed the so-called Helms–Burton law, introducing tougher rules for U.S. dealings with Cuba and deepening most controversial part of this law, which led to international condemnation of U.S. policy toward Cuba, involved sanctions against third-party nations, corporations, or individuals that trade with Cuba. The U.S. stance toward Cuba became progressively more hard-line, as demonstrated by the appointment of several prominent Cuban-Americans to the administration of George W. Bush. Nevertheless, as a result of pressure from European countries, particularly Spain, the Bush administration continued the Clinton administration’s policy of suspending a provision in the Helms–Burton Act that would allow U.S. citizens and companies to sue foreign firms using property confiscated from them in Cuba during the 1959 Revolution. Instead, the Bush administration sought to increase pressure on the Castro regime through increased support for domestic dissidents and new efforts to broadcast pro-U.S. messages to Cubans and to bypass Cuba’s jamming of U.S. television and radio broadcasts to Cuba.

Several incidents in 2000–1 involving Cuban spies also underscored the continuing Cuban-U.S. cold war. In addition, in early 2002 the Bush administration began to make a concerted effort to isolate Cuba from traditionally sympathetic Latin American countries such as Mexico, but Cuba has continued to have diplomatic and trade relations with Latin America. Although the successful visit to Havana in May 2002 by former U.S. president Jimmy Carter brought renewed efforts in Congress to lift the embargo, President Bush reaffirmed his support for it and sought to more strictly enforce the U.S. ban on travel by Americans to Cuba. In January 2004, he cancelled immigration talks with Havana that had been held biannually for a decade. In May 2004, he endorsed new proposals to reduce the amount of remittances émigrés can send back to Cuba and further restrict the number of visits Cubans living in the United States can make to their homeland. Cuba responded by cultivating closer relations with China and North Korea.

Internal Political Developments: A crack opened in the Cuban system in May 2002, when a petition with 11,000 signatures—part of an unusual dissident initiative known as the Varela Project—was submitted to the National Assembly of Popular Power (hereafter, National Assembly). Started by Oswaldo José Payá Sadinas, now Cuba’s most prominent dissident leader, the Varela Project called for a referendum on basic civil and political liberties and a new electoral law. In the following month, however, the government responded by initiating a drive to mobilize popular support for an amendment to the constitution, subsequently adopted unanimously by the National Assembly, declaring the socialist system to be “untouchable,” permanent, and “irrevocable.”

In recent years, Cuban politics have been dominated by a government campaign targeting negative characteristics of the socialist system, such as “indiscipline” (for example, theft of public and private property, absenteeism, and delinquency), corruption, and negligence. Under the campaign, unspecified indiscipline-related charges were brought against a member of the Cuban Communist Party and its Political Bureau, resulting in his dismissal from these positions in April 2006.

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One of the world’s last unyielding communist bulwarks, Castro, hospitalized by an illness, transferred power provisionally to his brother, General Raúl Castro Ruz, first vice president of the Council of State and Council of Ministers and minister of the Revolutionary Armed Forces on July 31, 2006. Fidel Castro’s unprecedented transfer of power and his prolonged recovery appeared to augur the end of the Castro era.

Political environment of Cuba when the confiscation took place

Cuba seized the properties of Cubans, Americans and other foreigners on the island starting in1959, with the bulk of the expropriations taking place in the second half of 1960.

The Rise of Fidel Castro: Batista’s coup d’état on March 10, 1952, had a profound effect on Cuban society, leading to doubts about the ability of the Cubans to govern themselves. It also began a brutal right-wing dictatorship that resulted in the polarization of society, civil war, the overthrow of Batista, and the destruction of the military and most other Cuban institutions. Fidel Castro Ruz, a charismatic, anti-U.S. revolutionary, seized power on January 1, 1959, following his successful revolt against the U.S.-backed Batista government. As the Castro regime expropriated U.S. properties and investments and began, officially, on April 16, 1961, to convert Cuba into a one-party communist system, relations between the United States and Cuba deteriorated rapidly. The United States imposed an embargo on Cuba on October 19,1960, and broke diplomatic relations on January 3, 1961, in response to Castro’s expropriations without compensation and other provocations, such as arrests of U.S. citizens. The failure of the Central Intelligence Agency (CIA)–sponsored invasion by Cuban exiles in April 1961 (the infamous Bay of Pigs invasion) allowed the Castro regime to destroy the entire Cuban underground and to emerge strengthened and consolidated, basking in the huge propaganda value of having defeated the “Yankees.

The process started in 1959 with the Cuban government’s takeover of agricultural and cattle ranches under Cuba’s Agrarian Reform Law and reached a critical stage in July of 1960 with the promulgation of Cuban Law 851,which authorized the expropriation of the property of U.S. nationals. Cuban Revolutionary Government, which had come to power in 1959, approved Law 890 nationalizing all major industries and putting to an end to private property in Cuba. Besides foreign-owned property and entities, nearly 400 Cuban-owned companies, including banks and manufacturing facilities, were also illegally seized.

The remaining expropriations were carried out through several resolutions enacted by the Cuban government in the second half of 1960, and continued through 1963, when the last U.S. companies still in private hands were expropriated. In a parallel process, most assets owned by Cuban nationals, except for small parcels of land, homes, and personal items, were seized at various times between 1959 and 1968. The laws issued by the Cuban government to expropriate the holdings of U.S. nationals contained undertakings by the State to provide compensation to the owners. Nevertheless, in almost no case was actual compensation paid.

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As the Cuban government initiated the State control over the Cuban lands with the First Agrarian Reform of 1959 and culminated the process with the Second Agrarian Reform of 1963. The First Agrarian Reform authorized the National Institute of Agrarian Reform (INRA) to expropriate private companies based on social needs as well as the intervention of private lands. The First Agrarian Reform recognized the constitutional right of the owners to receive indemnification. According to the Reform, the amount of the compensation due to expropriated owners would be determined based on market value using the declared property taxable value prior to October 10, 1958. Expropriations of land improvements, buildings and crops would be also compensated using declared taxable values. The Reform established that the indemnification for property expropriations will be paid in negotiable bonds. To that end, a series of bonds of the Republic of Cuba will be issued in the amounts, terms and conditions that will be set at the appropriate time. The bonds shall be denominated “Agrarian Reform Bonds” and will be regarded as government obligations.

When the government started to confiscate thousands of American-owned farms and businesses including a Colgate-Palmolive soap factory and the telephone company, which was owned by an American corporation. The relations with the U.S. cooled; Cuba drew closer to the Soviet Union. The early 1960s were the height of the Cold War, and the Soviets saw Cuba as a key strategic asset in America's backyard.

The Soviets supported Cuba with money and weapons, and tensions with the U.S. escalated. Eisenhower imposed a partial economic embargo in 1960. His successor in the White House, John F. Kennedy, approved a plan for Cuban exiles, backed by American firepower and the C.I.A., to invade Cuba. On April 17, 1961, 1,500 men landed in a swampy area on the southern coast of Cuba known as the Bay of Pigs.

But at the last minute Kennedy withheld the air and naval support he had promised, and Castro easily killed or captured nearly all of the invaders. It was an embarrassing defeat for the United States and a huge propaganda victory for Castro.

The United States severed diplomatic relations with Cuba on 3 January 1961, and imposed trade embargo Februarye 1962.The organization of united states is under pressure from the United States, suspended Cuba's membership in the body on 22 January 1962, and the us government banned all US-Cuban trade on 7 February. The Kennedy administration extended this ban on 8 February 1963, forbidding US citizens to travel to Cuba or conduct financial or commercial transactions with the country.[

Reasons

Cuba's nationalization process occurred between 1959 and 1968 and included different legal procedures such as: confiscation; forced expropriation by a judicial or administrative authority with compensation; and intervention by state agencies prior to confiscation, nationalization or liquidation of the private property. “The confiscation responded to three main grounds: whether the individual was involved with the tyranny; whether the individual committed a counterrevolutionary crime or whether the individual left the country permanently.

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When The United States imposed an embargo on Cuba on October 19, 1960, and broke diplomatic relations on January 3, 1961, in response to Castro’s expropriations without compensation and other provocations, such as arrests of U.S. citizens. The failure of the Central Intelligence Agency (CIA)–sponsored invasion by Cuban exiles in April 1961 (the infamous Bay of Pigs invasion) allowed the Castro regime to destroy the entire Cuban underground and to emerge strengthened and consolidated, basking in the huge propaganda value of having defeated the “Yankees.

Relations between the United States and Cuba deteriorated rapidly as the Cuban government, in reaction to the refusal of, standard oil and to refine petroleum from the Soviet Union in Cuban refineries under their control, took control of those refineries in July 1960. The Eisenhower administration promoted a boycott of Cuba oil companies, to which Cuba responded by nationalizing the refineries in August 1960. Both sides continued to escalate the dispute. Cuba expropriated more US-owned properties.

In the Castro government's first agrain reform law, on 17 May 1959, it sought to limit the size of land holdings, and to distribute that land to small farmers in "Vital Minimum" tracts.

Also the Soviets supported Cuba with money and weapons, and tensions with the U.S. escalated these all lead Cuba toward the confiscation.

The term confiscation is regularly used in U.S. laws and regulations regarding the Cuban nationalization process. Cuba has insisted that the U.S. properties in Cuba were expropriated, not confiscation as the Cuban people say.

The Cuban government wanted to do the Confiscation .And by seizure of private property by the state without compensation, usually to punish the person whose property is seized for who he is or for what he has done. Confiscation are ordered for political, religious, legal, or other reasons relating to a person subjected to the taking, and not to the property itself. For Cuba they wanted to punish USA.

Relationship between Political Environment & Business

The political environment can affect a business either positively, or negatively, depending on the prevailing situation in a country. It mainly forms the external factors - which are part of the macro-environment, control of which is beyond the ability of human beings.

These factors touch on the way politics are conducted in a country, which directly reflects on what is happening within the government itself.

This means that a democratic country will accord freedom to its people to vote for a government which has their interests at heart, and thus business will thrive - owing to the good policies the government implements.

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On the other hand, a dictatorial government will not earn the respect of its citizens - leading to economic as well as political instability and uncertainty.

Even though such a government will eventually go, businesses suffer a lot during the government's tenure, since they are not sure of their future. This underlines the importance of a democratic government to a country and to business.

Needless to say, once a country is stable, more investment opportunities will be realized, thus attracting more and more investors. This will reflect positively and directly on local businesses, as citizens will be able to have full confidence in them.

Business success depends on politics to a high degree, and in many ways. Politicians are usually the people controlling the operations of a government, and will decide which countries to trade with, as well as on setting the trading conditions.

This means that, if a certain business or its owners are not on good terms with the politicians, then they will suffer.

Furthermore, the rules that govern and regulate the manner in which trade is conducted are enacted by the politicians - thus good relations are needed between stakeholders in the business sector and politicians, to facilitate success.

How Does Political Environment Affect Home Business

Business deals totally depend on the political environment.

1) The politicians are the only people who decide with which other countries trade takes place, and under what conditions.

2) The rules and regulations for trade are passed by politicians.3) If political relations are not good with a neighboring country, or with any country

with whom you want to trade, you will not be allowed to do so - due to the rules & regulations which have been made by the politicians.

The political environment is one of the most important factors affecting the operations of a business. Political forces are said to be part of the macro-environment. All the factors of the macro-environment are external to an organization, and completely beyond its control.

Political factors are concerned with the overall situation of politics in a country, which can, in turn, be associated with the situation of government.

If a country is democratic by nature, people will have full voting authority and will be able to choose a government that will work for the betterment of the people and the country. In such a situation, businesses will thrive, because of the good policies of the government.

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On the other hand, if there is no democracy, there is no respect for the chosen government, and there will therefore be instability and uncertainty in the country.

Governments will come and go, and so will their respective decisions and policies. Businesses will suffer in such a case, as they will not know what will be their future.

That is why it is said that a stable and democratic government and its political decisions are important for a country, and for business overall. A stable political situation will also attract more and more investors from other nations.

Aspects of the political environment to be considered

1) Stability of the government2) Government type (dictatorship, democratic, monarchy, etc)3) Economic policy of the government4) Trade policy5) Diplomatic events in surrounding countries

All of the above factors affect the business environment and whether or not business will thrive. Recent events in Pakistan, and the current situation in Iraq, are examples of what happens to business when the political environment is unstable.

Political environment & Business environment in Cuba

According to the Economist Intelligence Unit, the role of the market in Cuba is going to be expanding in the years to come. The country's is an excellent business opportunity for anyone who is willing to accept the challenge and to give it a try.

Doing business in Cuba comes with its specifics that are determined by the country's financial system and local peculiarities. A number of companies from Europe, China and Canada in particular are already having successful businesses operating in Cuba.

Cuban business is benefiting from the numerous infrastructure and social improvements that are currently taking place. The state has invested in the improvement of the railroad system, the construction of desalination plants and the tourism sector is seeing growth and support. All of these characteristics determine the local business environment as a good opportunity that is going to continue expanding through economic reforms that have recently started.

Naturally, tourism can probably be ranked as the most beneficial and profitable business in Cuba. Official statistics for 2012 show that tourism has registered a 12 percent income increase in the first quarter of the year. The country has also seen an increase in the number of visitors that totals four percent.

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Cuba has more than 300 hotels that offer employment to many and that are determining for the Cuban business environment.

In 2011 and 2012, the Cuban government did undertake a series of economic reforms that affected the local business environment in a positive way. The restructuring of the state administration was the first one. In addition, the government accepted a number of reforms stimulating the appearance of small businesses.

Some economy experts from across the globe state that Cuba has the potential to turn into the "next China" in terms of economic and production capacity. The changes that have taken place recently validate the claim and demonstrate that the country has a lot of potential that is yet to be fully harnessed.

Foreign companies are successfully functioning in Cuba and according to many business representatives, the time is right for others to enter the local business stage.

The French CoFace credit risk and investment company assessed the business climate and environment in Cuba, coming up with a rather comprehensive and intriguing report. According to CoFace, Cuba's biggest strengths include very skilled workers, the attractiveness of local tourism landmarks, the availability of natural resources like nickel and oil, the good social indicators, the agreement with Venezuela that ensures preferential oil import and the agricultural production of sugar and tobacco among many others.

These trends and positive developments in 2011 are expected to continue throughout 2012. The Cuban business environment is expected to become even more attractive, both for local companies and for foreign entrepreneurs that are wishing to start operating in the country. Cuba has tremendous potential and the state is showing its willingness to work on even better business environment and opportunities.

For business aficionados, a big event coming up is the International Fair of Havana.

The International Fair of Havana celebrates in 2011 its 29th edition among great expectations created by the start of a transformation and upgrading process in foreign trade and foreign investment areas, in accordance with a group of new economic guidelines promoted by Cuban authorities.

With an exchange nearing 10 billion dollars a year, Cuba's foreign trade has a relevant position in the said guidelines, which were conceived to strengthen the country's response capability in the present international situation, and after performing a meticulous diagnosis identifying necessary changes in all spheres of economic, social and cultural development.

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This ongoing process does not only have a cardinal end achieving sustainability in the food, economic and environmental areas, but also for sufficient institutional flexibility, international competitiveness and a new structure of relations between state and society.

Of the 313 approved guidelines, no fewer than 45 deal with the foreign sector, with recommendations of measures to encourage exports and substitute imports. The latter is to avoid expending more than one billion dollars to purchase products that can be developed in the archipelago.

According to the Economist Intelligence Unit, the role of the market in Cuba is going to be expanding in the years to come. The country's is an excellent business opportunity for anyone who is willing to accept the challenge and to give it a try.

Doing business in Cuba comes with its specifics that are determined by the country's financial system and local peculiarities. A number of companies from Europe, China and Canada in particular are already having successful businesses operating in Cuba.

Cuban business is benefiting from the numerous infrastructure and social improvements that are currently taking place. The state has invested in the improvement of the railroad system, the construction of desalination plants and the tourism sector is seeing growth and support. All of these characteristics determine the local business environment as a good opportunity that is going to continue expanding through economic reforms that have recently started.

Naturally, tourism can probably be ranked as the most beneficial and profitable business in Cuba. Official statistics for 2012 show that tourism has registered a 12 percent income increase in the first quarter of the year. The country has also seen an increase in the number of visitors that totals four percent.

Cuba has more than 300 hotels that offer employment to many and that are determining for the Cuban business environment.

In 2011 and 2012, the Cuban government did undertake a series of economic reforms that affected the local business environment in a positive way. The restructuring of the state administration was the first one. In addition, the government accepted a number of reforms stimulating the appearance of small businesses.

Some economy experts from across the globe state that Cuba has the potential to turn into the "next China" in terms of economic and production capacity. The changes that have taken place recently validate the claim and demonstrate that the country has a lot of potential that is yet to be fully harnessed.

Foreign companies are successfully functioning in Cuba and according to many business representatives, the time is right for others to enter the local business stage.

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The French CoFace credit risk and investment company assessed the business climate and environment in Cuba, coming up with a rather comprehensive and intriguing report. According to CoFace, Cuba's biggest strengths include very skilled workers, the attractiveness of local tourism landmarks, the availability of natural resources like nickel and oil, the good social indicators, the agreement with Venezuela that ensures preferential oil import and the agricultural production of sugar and tobacco among many others.

These trends and positive developments in 2011 are expected to continue throughout 2012. The Cuban business environment is expected to become even more attractive, both for local companies and for foreign entrepreneurs that are wishing to start operating in the country. Cuba has tremendous potential and the state is showing its willingness to work on even better business environment and opportunities.

For business aficionados, a big event coming up is the International Fair of Havana.The International Fair of Havana celebrates in 2011 its 29th edition among great expectations created by the start of a transformation and upgrading process in foreign trade and foreign investment areas, in accordance with a group of new economic guidelines promoted by Cuban authorities.

With an exchange nearing 10 billion dollars a year, Cuba's foreign trade has a relevant position in the said guidelines, which were conceived to strengthen the country's response capability in the present international situation, and after performing a meticulous diagnosis identifying necessary changes in all spheres of economic, social and cultural development.

This ongoing process does not only have a cardinal end achieving sustainability in the food, economic and environmental areas, but also for sufficient institutional flexibility, international competitiveness and a new structure of relations between state and society.

Of the 313 approved guidelines, no fewer than 45 deal with the foreign sector, with recommendations of measures to encourage exports and substitute imports. The latter is to avoid expending more than one billion dollars to purchase products that can be developed in the archipelago.

Cuba: Present Situation

Before the revolution in 1959 Cuba was a dictatorship in every sense of the word. The entire nation was suppressed under the tight grip of the dictator Fulgencio Batista. There were no free elections, opposition to Batista's power was forbidden, and the Cuban people were deprived of the basic human right to be allowed to act as a sovereign nation with the power to move forward, and form its own future.

Since the revolution in 1959, Cuba has travelled a long way, from the oppressed, suffering nation that it was, and has since established its own unique form of democracy. However there is still limited access to information about Cuba, and what little information there is, is prone to be

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misleading, due to The United State of America's domination over the majority of the world's media power. As a result, many people still posses unclear and misinformed views on the Cuban political system, forcing them to be critical of the so called 'dictatorship' which they believe is still enforced, making them sometimes even reluctant to either support, or travel to Cuba.

Cuba is constitutionally defined as a "socialist state guided by the principles of José Martí, and the political ideas of Marx, the father of communist states, Engels and Lenin." The present Constitution also ascribes the role of the Communist Party of Cuba to be the "leading force of society and of the state".

Executive power is exercised by the government. Until February 2008, Cuba was led by President Fidel Castro, who was Chief of State, Head of Government, Prime Minister, First Secretary of the Communist Party of Cuba (PCC), and Commander in Chief of the armed forces. The Ministry of Interior is the principal organ of state security and control.

According to the Cuban Constitution Article 94, the First Vice President of the Council of State assumes presidential duties upon the illness or death of the President. On July 31, 2006, during the 2006 Cuban transfer of duties, Fidel Castro delegated his duties as President of the Council of state, first secretary of the Cuban Communist Party and the post of commander in chief of the armed forces to first Vice President Raúl Castro.

Cuba is a one-party state. There is a high level of social control and a strong police presence. There are widespread restrictions on freedom of speech, association and assembly for Cuban nationals. Political demonstrations or gatherings not sanctioned by the government may be broken up. For safety, one should avoid demonstrations or large public gatherings. The political situation remains calm at present.

A distance of 90 miles (144 kilometers) separates the Republic of Cuba from the United States of America. That distance is close enough for cultural if not political influences between the two countries.

Economical

Cuba has a state-controlled economy, which means that all Cuba's production is controlled and managed by the government and most of the labor force is employed by the state. The state controls Cuba's economy to a greater degree than in the economies of not only communist China and Vietnam today, but also Poland, Hungary, and Czechoslovakia in the 1980s. Foreign investors must contract with the state, and are required to enter into joint ventures with the government, including in the highly lucrative tourist industry. The state operates dollar-only shops to capture the hard-currency spent by foreigners and Cubans spending their remittances. A military enterprise called Gaviota runs a far-flung complex of tourist resorts and services. The sugar industry is under the command of the military and a high-ranking Army General. And rather than dismantle or privatize them, the state continues to operate inefficient state-enterprises in order not to worsen unemployment or underemployment.

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The United States's economic embargo on Cuba, in place for more than half a century, continues to impose indiscriminate hardship on Cubans, and has failed to improve human rights in the country. At the United Nations General Assembly in October, 186 of the 192 member countries voted for a resolution condemning the US embargo; only the US and Israel voted against it.

In January 2011 US President Barack Obama used his executive powers to ease “people-to-people” travel restrictions, allowing religious, educational, and cultural groups from the US to travel to Cuba, and permitting Americans to send remittances to assist Cuban citizens. In 2009 Obama eliminated limits on travel and remittances by Cuban Americans to Cuba, which had been instituted during George W. Bush’s administration.

Cuba is increasingly being used as a transit country for drugs destined for Europe. Cuban courts are handing out severe penalties (in excess of twenty years) for drugs-related offences.

Committees for the Defence of the Revolution

Committees for the Defence of the Revolution or CDR, is a network of neighbourhood committees across Cuba. The organizations, described as the "eyes and ears of the Revolution", exist to promote social welfare and report on "counter-revolutionary" activity. As of 2010, 8.4 million Cubans of the national population of 11.2 million were registered as CDR members.

The CDR system was formed by Fidel Castro on September 28, 1960, following the 1959 Cuban Revolution, which overthrew the U.S.-backed dictator Fulgencio Batista. The slogan of the CDR is, "¡En cada barrio, Revolución!" ("In every neighborhood, Revolution!"). Fidel Castro proclaimed it "a collective system of revolutionary vigilance." So that everybody knows who lives on every block, what they do on every block, what relations they have had with the tyranny, in what activities are they involved and with whom do they meet.

Recent news always reflects the current issues and situations. Some important news of Cuba 0f the year 2012 and 2013 are discussed to put some light on current issues-

It has taken half a century but Cuba has finally bowed to the inevitable and announced the lifting of foreign travel restrictions on its citizens. From January, 2013 they will no longer require exit permits to go overseas. The move – announced on the 50th anniversary of the Cuban missile crisis – is the most significant act of liberalization yet from Raúl Castro, who succeeded his brother Fidel as Cuba’s president four years ago. This latest move will be watched with keen interest by the United States, which will be the destination for most Cubans who decide to use their new-found freedom of movement. Since 1966 Washington has granted Cubans automatic residence if they can reach the United States – as many thousands have, usually in makeshift vessels. Raúl Castro has dropped his brother’s anti-American posturing, recently declaring that good relations between the two countries would be “mutually advantageous”. (The Telegraph, 16 Oct, 2012)

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Raul Castro is decentralizing the state-dominated economy, allowing more space for private initiative in agriculture and retail services and has lifted many restrictions on personal freedoms, such as travel and buying and selling homes and cars. He has also introduced term limits (two five-year stints) for top government posts, but has drawn the line at legalizing other political parties and contested elections. "Renouncing the principle of a single party would be equal to legalizing one or more imperialist parties," Castro said at a Party conference last year. (The Telegraph, 4 Feb, 2013)

Conclusion

The critical concern Political environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial and unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business area governments idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's activities by encouraging and offering support or by discouraging and banning or restricting its activities depending on the government.

Reference

http://www.telegraph.co.uk/comment/telegraph-view/9349282/Cuba-unlocks-the-door.html

http://en.wikipedia.org/wiki/Politics_of_Cuba#State_leaders https://www.cia.gov/library/publications/the-world-factbook/geos/cu.html History Text Source: Library of Congress

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