Study Reports

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Due to the collapse of the socialist regimes in Russia and Eastern Europe, Cuba experienced a severe economic recession in the early 1990s. Even after implementing a series of economic reforms, Cuba is still characterized by its "underdeveloped" economy. On the political front, Cuba has maintained the socialist regime led by Mr. Castro since the 1959 Revolution. Another characteristic of contemporary Cuba is political and ideological supremacy over economic flexibility.

Now that Cuba faces severe economic conditions and international environment, she will not be able to retard economic reforms under the current socialist government. As Cuba deepens interactions with foreign countries including the United States, the transformation will be further encouraged.

This report recommends that Cuba should advance toward a "soft landing to a market economy and democracy coexistent with social fairness." Cuba needs to quicken its transition to a market economy, responding to the challenges such as the elimination of the dual economy and the alleviation of the hard currency bottleneck. These reforms, on their part, require efficient and transparent governance. At the same time, Cuba should reorganize its social services to ensure a minimal social safety net with budgetary discipline and tackle environmental problems such as water contamination and soil degeneration.

Japan can assist such Cuban efforts through expanding its ODA. The transformation of Cuba, in turn, is beneficial for Japan for various reasons. Finally, the report recommends concrete assistance measures for the following four areas: (1) promotion of sustainable development, (2) assistance to Cuba's efforts for political and economic liberalization, (3) cooperation to reform Cuba's policy for the socially weak, and (4) combination of Cuba's human resources with Japan's technical resources to help the third countries.