Batista’s honeymoon with Havana’s inhabitants was short-lived and the capital soon harbored a modicum of discontent, “a function of deepening socio-economic frustration as well as of growing political grievances.”
Despite the fact that during the 1950s, Cuba ranked among the top five countries in Latin America on a wide range of socioeconomic indicators such as urbanization, literacy, per capita income, infant mortality, and life expectancy, a sense of recurring stagnation characterized the Cuban economy.
Increasingly, Cuban-American reciprocity was perceived to exacerbate the city’s economic distress.
In 1956, the National Bank called attention to impending crisis by issuing a report delineating the consequences for living standards if dependence on sugar were to continue. With the benefit of hindsight they observed that in 1955 Cuba would have needed a sugar harvest of more than 7 million tons to have maintained 1947 standards of living. In actuality, the 1955 harvest was less than 5 million tons.
The centrality of sugar underscored a structural crisis of economic stagnation, affecting other Cuban exports as well. For example, under the Sugar Act of 1956, the United States formally secured a Cuban commitment to purchase rice in exchange for continued preferential treatment of sugar.
Between 1955 and 1959, rice imports grew by more than 40 percent with Cuba purchasing approximately 70 percent of all US rice exports. The relationship became so institutionalized that soon Cuba’s state banks refused funding for domestic rice production.
Clearly, the Cuban-US reciprocity mentality dictated that safe-guarding the country’s sugar quota in the US market was the priority. Internal sugar interests resisted reforms aimed at protecting the Cuban market for national industry for fear that the United States would lessen the preferential treatment of sugar.
In addition to sugar, there were many other links to the American economy. So many, in fact, that Havana’s relationship with the United States was noted for its dependent economic–rather than militaristic–aspects.
The dependency relationship was geographically expressed by the city’s proximity to the Florida peninsula which provided highly accessible markets and quick turnaround time for supplies and inventory.
By the mid-1950s, the US Department of Commerce estimated combined Cuban short-term assets and long-term investments in the United States at $312 million, of which $265 million were in the form of short term assets, especially real estate.
While Cubans favored the markets in New York and South Florida, Americans were investing heavily in Cuba, especially in Havana.
Since three-fourths of all manufacturing outside of sugar was located in the capital, American commercial investment disproportionately affected the city. Americans owned or dominated the majority of key manufacturing plants as well as the largest chain of supermarkets, several large retail stores, and most major tourist facilities. Moreover, 25% of all bank deposits were held by branches of American banks. Investors from the United States owned 50% of the public railway system and over 90% of the telephone and power industries. Consequently, Cuba was integrated directly into the larger United States economic system and its concomitant consumption patterns.
Even though Cubans (particularly those living in Havana) enjoyed a remarkably high per capita income in Latin American terms, they lived within a North American cost of living index, enjoying a material culture underwritten principally by imports from the United States.
Photograph by Lisa Reynolds Wolfe.
