U.S.-Cuba Relations

Why is Cuba on the State Sponsors of Terrorism list?

According to the State Department, Cuba remains on the list because it opposes the global war on terrorism, supports members of two Colombia insurgent groups, the Revolutionary Armed Forces of Columbia (FARC) and the National Liberation Army (ELN), and provides safe haven to several Basque ETA members from Spain. But some experts say there is little evidence to support the State Department's allegations.

What is the status of Cuba's economy?

After introducing a few market reforms -- opening up Cuba to tourism, allowing some foreign investment, and authorizing self-employment for certain occupations -- in the early 1990s, the Cuban government reasserted central control. In 2004, Cuba reverted to a peso economy, with the government as the only body authorized to exchange pesos into dollars. Since Raul assumed power in July 2006, he has encouraged dialogue about the Cuban system, and in particular, the economy. This has led experts to speculate he might institute economic reforms. Currently, the economy is divided into the following revenue streams:

• Nickel. Cuba has the third-largest nickel reserves in the world. Nickel is currently the country's biggest export, bringing in roughly $2.7 billion in 2007 (Reuters).
• Tourism. Now the economy's largest source of revenue, tourists -- primarily from Canada and the European Union -- bring some $2.1 billion into the country.
• Remittances. Academic sources estimate remittances total between $600 million and $1 billion a year, most coming from families in the United States.
• Sugar. Sugar was long the primary industry in Cuba, but production has plummeted due to outdated factory equipment. In 1989, production was more than 8 million tons, while the harvest in 2005 was only 1.3 million tons.
• Foreign investments. Cuba receives hundreds of millions of dollars in foreign investments from Venezuela, Spain, and China.

How does Venezuela assist Cuba?

In October 2000, Chavez and Castro signed the "Integral Cooperation Accord," an agreement that specified an exchange of Venezuelan oil for Cuban goods and services. Venezuela now sells Cuba some 90,000 barrels of crude oil daily at preferential prices. Florida International University's Martin calls the relationship "very intimate," and says it is getting "stronger and stronger every year." But Chavez also helps Castro from an ideological standpoint. In addition to removing any incentive to approach other countries for economic assistance, Chavez's support means that Cuba no longer stands alone against the United States. This "provides them with a kind of insurance policy that they haven't had since the Soviet bloc collapsed," Sweig says. Other experts point to Cuba's burgeoning friendship with China as an indication of the growing worldwide support for Castro's regime. "There is this image now of close Cuban-Chinese relations which is very useful to Cuba, in the sense that they're not isolated," Smith says.