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In the first half of the 20th century, the United States, the primary purchaser of Cuba's sugar, dominated the island's economy and to a considerable extent controlled its political processes. Until the 1950s, Cuba was besieged by political corruption and violence. Fulgencio Batista, though only a sergeant in the army, managed to dictate Cuba's internal affairs through a series of puppet presidents for nearly a decade before winning the presidency outright in 1940. Though Batista retired in 1944, he staged a military coup and returned to power in 1952. Batista's corrupt dictatorship, supported by the United States, overlooked growing poverty across the country while Batista fattened his overseas bank accounts.

Havana was effectively ruled by a group of millionaires more powerful than anywhere else in Latin America, a distortion that allowed Cuban officials to claim that Cuba had the second-highest per capita income in the region. The capital was overrun by brothels, casinos, and gangsters, with high rollers in zoot suits transforming the city into their personal playground. Meanwhile, most of the country was mired in poverty, and more than half of all Cubans were undernourished in 1950. The nascent republic's unequivocal dependence on the United States, corruption, and absence of social equality reinforced the seeds of discontent that had been planted as far back as the 1920s.

Guerrilla Warfare & Revolution

By the 1950s, the climate was ripe for revolution, though it would come in fits and starts. A band of young rebels attacked the Moncada Barracks, the country's second-most-important military base, in Santiago de Cuba on July 26, 1953 (the rebels would later take the date of the attack as the name for their movement, calling it the Movimiento 26 de Julio). The effort failed miserably, and many of the rebels were killed or later captured and tortured by the military. But the attack gave its young leader, a lawyer named Fidel Castro Ruz, the bully pulpit he needed. Jailed and tried for offenses against the nation, Castro's legendary 2-hour defense -- presaging an uncanny ability to speak for hours at length about Cuba and the Revolution -- included the now-famous words, "History will absolve me" (the title of Castro's revolutionary manifesto). Castro was imprisoned offshore on the Isla de la Juventud until May 1955, when Batista granted an amnesty to political prisoners.

Castro fled to Mexico, where he spent a year in exile planning his return to Cuba and the resumption of his plans to overthrow the government. The following year, Castro sneaked back to the southeastern coast of Cuba, along with a force of 81 guerrillas, including Ernesto "Che" Guevara and Castro's brother Raúl, aboard a small yacht, the Granma. The journey was beset by myriad problems and delays, including unfortunate weather, and Batista's forces were tipped off to the rebels' imminent arrival. Only 15 rebels reached their planned destination, the Sierra Maestra mountains. From such unlikely beginnings, the rebel forces evolved into a formidable guerrilla army, largely through the assistance of peasants who were promised land reforms in exchange for their support.

Following 2 years of dramatic fighting in the mountains and strategic points, Castro's insurrection gained strength and legitimacy among a broad swath of the Cuban population. Batista saw the end in sight and on January 1, 1959, he fled the country for the Dominican Republic. The combat-weary but triumphant rebels, known as the barbudos (the bearded ones), declared victory in Santiago de Cuba and then entered Havana a week later.

Cuba Under Fidel Castro

The new government immediately set about restructuring Cuban society: It reduced rents, instituted agrarian reform, and limited estates to 400 hectares (1,000 acres). As part of a comprehensive nationalization program, the government expropriated utilities, factories, and private lands. The fledgling government also embarked upon wide-ranging programs designed to eradicate illiteracy and provide universal healthcare and free schooling.

The Revolution's lofty aims were mitigated by cruder attempts to consolidate state power. The transition to a centralized, all-powerful state antagonized many Cubans, mostly elites. Castro placed the media under state control, as it remains today, and he promised elections that were never held. Local Committees for the Defense of the Revolution (CDRs) kept tabs on dissenters. In the early years of Castro's reign, many thousands of people suspected of opposing the Revolution were interrogated, imprisoned, or sent to labor camps, along with other social "undesirables," such as homosexuals and priests.

In just 3 years after the triumph of the Revolution, nearly a quarter of a million Cubans -- mostly professionals and wealthy landowners -- fled the country. They settled in nearby Florida and established a colony of conservative Cuban Americans, which, in the coming decades, achieved not only economic success, but also a level of political clout that was disproportionate to its size.

Washington, opposed to Cuba's political evolution and spurred on by politically active Cubans living in Miami, continued to try to isolate Castro in Latin America. Just 1 year after Castro took power, in 1960, the U.S. government launched a trade embargo against Cuba in retaliation for Cuba's state appropriations and seizures of the assets of U.S. businesses. The trade embargo, which Cuba terms a blockade, and travel restrictions later imposed on most U.S. citizens, continue to this day. In 1961, the United States broke diplomatic relations with Cuba, and CIA-trained Cuban exiles launched an attempt to overthrow the Castro government. The Bay of Pigs mission was an utter fiasco and a severe black mark against the Kennedy administration. Cuba's resistance strengthened Castro's resolve to stand up to the United States.

Castro had not revealed any Communist leanings in the decade since coming to power, but soon after the Bay of Pigs, Castro declared himself a Marxist-Leninist. Some historians have argued that the aggressive ploys of the U.S. government were fundamental in pushing the Cuban government into the arms of the American enemy in the Cold War, the Soviet Union and its Eastern bloc of potential trading partners. The USSR was only too eager to develop a strategic relationship with an ideological opponent of Washington in the backyard of the United States. By the end of the 1980s, the USSR dominated Cuban trade and provided Cuba with subsidies worth an estimated $5 billion annually.

In the fall of 1962, the Soviet Union under Nikita Khrushchev installed 42 medium-range nuclear missiles in Cuba. A tense standoff ensued when President Kennedy ordered a naval blockade on the island and demanded that the existing missiles be dismantled. The world waited anxiously for 6 days until Khrushchev finally caved to U.S. demands to turn back his ships. The possibility of a nuclear war was averted in return for a U.S. promise never to invade Cuba.

Another 200,000 people abandoned Cuba as part of the Freedom Flights Program between 1965 and 1971. In 1980, Castro lifted travel restrictions and opened the port of Mariel (west of Havana); during the Mariel Boatlift, at least 125,000 Cubans -- many of whom Washington charged were criminals and drug addicts -- made it to U.S. shores before President Carter forced Castro to close the floodgates.

The Special Period

Soviet trade and subsidies propped up Cuba's heavily centralized and poorly performing economy until the end of the 1980s. But the fall of the Berlin Wall and dismantling of the Soviet Union suddenly left Cuba in an untenable position, as supplies of food, oil, and hard currency were cut off while the U.S. trade embargo continued.

The Cuban government initiated a "Special Period" in 1990 -- a euphemism for harsh new austerity measures and hardship to be borne by the large majority of Cubans. Rationing of basic goods had existed for most of Castro's years in power, but limited government distribution now included many more necessities. During the Special Period and years since, most Cubans found it virtually impossible to subsist on rations alone.

Complicating the delicate situation was the 1992 Cuba Democracy Act, which broadened the U.S. embargo to cover a ban on trade with Cuba for foreign subsidiaries of U.S. companies. Though the U.S. government denies that its trade embargo can be blamed for the shortcomings in the Cuban economy and resulting shortages of food and medicine, many analysts believe that the embargo has greatly exacerbated the difficulties experienced by ordinary Cubans. Meanwhile, Castro held onto power and made few concessions, even using the U.S. trade restrictions to his advantage: They gave him something and someone to blame for Cuba's grinding poverty and lack of goods.

With the economy in shambles, the Cuban government has been forced to introduce a limited number of capitalist measures. Foreign investment, which has taken the form of joint ventures primarily in the fields of tourism and mineral and oil exploration, has been openly encouraged. Castro, with inescapable irony, legalized the U.S. dollar in 1993 -- even establishing state-owned, dollar-only stores, small-scale private enterprises like casas particulares and paladares (private homestays and restaurants), and the introduction of private farmers' markets. While these capitalist initiatives have benefited some Cubans, giving them access to hard currency (through jobs in tourism or relatives sending remittances from abroad), the dual economy has ultimately turned many other Cubans into have-nots, unequal in a socialist society.

In August 1994, in a frantic safety-valve measure designed to alleviate some of the economic pressure on the state, Castro lifted restrictions on those wishing to leave. More than 30,000 Cubans accepted the invitation and set out across dangerous waters to Florida on balseros (homemade rafts). Faced with the political embarrassment of an influx of poor Cubans, President Clinton abolished the standing U.S. policy granting automatic asylum to Cuban refugees. Instead, they were returned to the Guantánamo Bay Naval Base to await repatriation.

After Castro visited the Vatican in 1996, Pope John Paul II returned the favor. His visit to Cuba in 1998 prompted a relaxation of the government's harsh views of the Catholic Church in Cuba. In late 1999, 6-year-old Elián González became the latest face of political animosity between the United States and Cuba. González survived for 2 days alone on a raft after his mother and other escapees had perished, only to become the object of an international tug-of-war. Castro and most Cubans, in huge demonstrations, demanded the boy's return to be with his father in northern Cuba. Castro's opponents in the United States sought to allow the boy to stay with distant relatives in Miami. After weeks of wrangling, the Immigration and Naturalization Service returned Elián to his father and Cuba, where he received a hero's welcome.

The normally quiet U.S. naval base at Guantánamo Bay has been in the news in recent years after Al Qaeda prisoners from the wars in Afghanistan and Iraq were taken to the base for interrogation and detention. Former President Jimmy Carter made a historic visit to Cuba in the spring of 2002, voicing support for Castro's call for an end to the trade embargo and travel restrictions while also criticizing the Cuban government's lack of democracy. Carter met with dissidents and gave an uncensored and at times harshly critical speech in front of Castro that was broadcast on Cuban television.

However, Carter's visit had little lasting effect. In 2003, Castro jailed some 75 prominent dissidents and government critics, imposing stiff sentences following abbreviated trials. In early 2004 and again in 2006, the Bush administration tightened the screws on U.S. citizens' right to travel to Cuba, virtually eliminating all educational and humanitarian licenses and severely reducing the amount of time and money that Cuban Americans can spend in Cuba.

In July 2006, Fidel Castro fell ill and withdrew from public life. His younger brother Raúl became acting president. Fidel Castro relinquished power in February 2008 and Raúl was unanimously elected as Cuba's new president by the country's National Assembly.

Cuba Under Raúl Castro

One of the first reforms that Raúl instituted following his election as Cuba's new president was the lifting of restrictions on Cubans owning TVs, DVD players, computers, and other electrical appliances. This was followed by a move to decentralize the state-run agricultural economy, including allowing farmers to till fallow land and to buy their own equipment. In June 2008, Raúl abolished the egalitarian wage system, allowing hard-working employees to earn a better salary, and raised the state pension. In July 2008, Raúl authorized land grants for private farming. This move was aimed at boosting agricultural production and reducing the amount of food that Cuba imports. Then Raúl lifted the restrictions on cellphone ownership and the prohibition preventing Cubans from staying in tourist hotels. However, freedom to travel abroad is still restricted and access to the Internet is also heavily restricted.

Like much of the world, Cuba suffered from the effects of the global recession: tourism was down and oil imports were limited because of a lack of cash. At the same time, Cuba was still reeling from spending millions of dollars that were needed to restore parts of the country battered by three hurricanes in autumn 2008. Cuba's economy has become so strained that in a rare nod to private property development, Cuba signaled that it would allow foreign companies to develop golf and leisure developments with 99-year leases. One of those companies celebrating this news is Britain's Esencia (www.esenciahotelsandresorts.com).

It seems that Cuba's crumbling economy has forced Raúl to review some of Cuba's socialist policies. Raúl has said that "We have to end forever the notion that Cuba is the only country in the world where you can live without working," and he has instituted some fairly radical reforms. On January 1, 2009, Cuba celebrated the 50th anniversary of the Revolution, and after this low-key celebration, government officials announced that Cubans with the financial means could build their own homes -- a huge advance. Later that year, Castro leased millions of acres of uncultivated fertile state land to private farmers; this was followed, in April 2010, with news that barber shops and beauty salons could trade privately, joining private restaurants (paladares) and bed and breakfasts (casas particulares) as means of self-employment. Since fall 2010, Cubans have been permitted to sell home-grown products from their homes and kiosks; this signals the end of Cuba's roadside sellers, who would illicitly flag traffic down on the highway to sell items like cheese or fruit. Also in fall 2010, the Cuban government announced it would lay off more than a million state workers in the next few years. Some Cubans hoped that these unemployed state workers would be allowed to run small, private businesses -- and indeed, the government soon after announced proposals to allow 178 forms of self-employment (cuenta propia), including casa particulares, paladares, some forms of transportation, and guiding services. As of November 2010, only the punitive tax codes had been issued; licenses to launch the new forms of self-employments were expected soon after. The Communist Party's media, Granma (www.granma.cubaweb.cu), is the best source of up-to-date information on this issue. Unfortunately, infrastructure issues, like electricity blackouts, transportation problems, food shortages, and rationing of air-conditioning and supplies still persist.

Cuba's economy is on its knees, pilfering from the state is widespread, and many Cubans are eagerly awaiting the prospect of self-employment licenses so that they can earn a decent living. However, it remains to be seen how these workers, who have only ever known state employment under the Castros, will manage and survive in private and self-employment.

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