Effects of lack of Competition on Cuba’s Economy

2053 Words5 Pages
bulb-icon

Recommended: Effect of the Cuban revolution

In order for a country to flourish, its society must be equipped with the ability to compete. It must be able to compete domestically and then eventually expand to compete internationally. Forgotten as a global influence and as a national institute is the country of Cuba. The main reason why is the absence of competition. Thus, Cuba’s economy is currently stagnant and unproductive because of a lack of threat of new entrants, substitute as well as a lack of bargaining power of consumers; while having an increase in the bargaining power of suppliers and limited rivalry within the economy.

Due to a lack of threat of new entrants, Cuba’s economy is currently stagnant and unproductive. The threat of new entrants largely depends on what barriers to entry exist. Therefore, Cuba’s barrier to entry is the main reason why there is a lack of threat of new entrants. Barriers to entry make it difficult for other firms to enter into the market. It also restricts competition and aids monopoly. Barriers to competition are often the result of government regulations, and private sector firms frequently find the regulatory burden a major disincentive to doing business and because of this there is a lack of threat of new entrants. Moreover, it facilitates low productivity, low quality of goods or services and higher levels of corruption. “In a well-functioning market where you have effective competition, over time, costs are driven down, product and service quality should rise, the value of output increases, innovation occurs, firms that are inefficient are driven out of the market, and value-adjusted prices fall”(Stonehouse & Snowdon, 2007). Crucially, competition facilitates greater equality of opportunity by breaking down the barriers...

... middle of paper ...

...Statistics.

Retrieved from http://www.budde.com.au/Research/Cuba-Telecoms-Mobile-and-Broadband-Analyses-and-Statistics.html#sthash.xsY80buX.dpuf

Cuba. (n.d) Retrieved from http://www.heritage.org/index/pdf/2014/countries/cuba.pdf

Cuba opens up sale of new, used vehicles. (2013, December 19). Automotive News

http://www.autonews.com/article/20131219/GLOBAL/131219838/cuba-opens-up-sale-of-new-used-vehicles

In reversal, Cuba shuts down clothing businesses. (2013, October 30). Retrieved from

http://www.marketplace.org/topics/world/bbc-world-service/reversal-cuba-shuts-down-clothing-businesses

Perfect competition - the economics of competitive markets. (n.d.). Retrieved from

http://tutor2u.net/economics/content/topics/competition/competition.htm

Porter's 5 Forces. (n.d.). Investopedia. Retrieved from

http://www.investopedia.com/terms/p/porter.asp

Show More
Related

  • The Culture Of Cuba

    1362 Words  | 3 Pages

    Whether it 's for the music, people or food, Cuba is a popular and interesting place to visit. Cuba is located between the Caribbean Sea and the North Atlantic Ocean. At 42,426 square miles, Cuba is the largest island in the Caribbean and the 105th largest country in the world. Cuba has a population of 11.1 million. Out of that 11.1 million, Havana is home to 2.1 million (Nation Facts). The official language of Cuba is Spanish, but English and French are spoken throughout the country. The most practiced religion of Cuba is Roman Catholicism, but a large number of people follow the Afro-Cuban and Protestant religions. The president of Cuba is currently Raúl Castro, which is Fidel Castro 's brother. The currency of Cuba is the Cuban peso (Cuba).

    Read More

  • Cuba

    564 Words  | 2 Pages

    economic growth comes from agriculture and exports to and from Europe. Since America has had an embargo on Cuba since 1962 neither countries trade with each other because of many disagreements about governing techniques and Fidel's unwillingness to comply with U.S. instructions. Cuba’s long history and culture has contributed to many economic and social growth through out the world, but Cuba is still struggling to try to stable their economy.

    Read More

  • Thomas G. Patterson's Contesting Castro: The United States and the Triumph of the Cuban

    754 Words  | 2 Pages

    Economically, Cubans “enjoyed one of the one of the highest standards of living in Latin America” (34). This is predominately due to the fact that Cuba exported half its sugar and two-thirds of it total exports into the U.S., and imported three-fourths of their total imports from the U.S. Although the U.S. (35). Although the U.S. boosted the Cuban economy, Cubans resented that they were still living at an economic level lower than Americans. The average Cuban income was one- third the average of Mississippi, the poorest state in the U.S. in th...

    Read More

  • Cuban-Russian Relations

    1721 Words  | 4 Pages

    Cuba’s unpredictable shift toward socialism and its growing dependence on the Soviet Union divided both the leadership and the country at large. With a relationship dating back to before Fidel Castro’s installment into power, Russia and Cuba have both played major roles in the development and regression of each other’s economies and societies.

    Read More

  • Lift the Cuban Embargo

    2503 Words  | 6 Pages

    In 1959, revolutionaries nationalized Cuba’s wealth and did not compensate U.S. companies for our efforts to fight against the rebels. They did, however, repay corporations from nations that did not fight. Because of this seizure of our property, the Cuban embargo was put into action. In fact, Cuba is the only country in the western

    Read More

  • Economies Of Cuba And Puerto Rico 16th - 18th Century

    932 Words  | 2 Pages

    The economies of Cuba and Puerto Rico are very similar during the 16th, 17th, and 18th centuries. As Spain colonized these two islands in the 16th century under the idea that gold was abundant. Thus in turn the islands became a safe port for Spain and her vessels. It also set out to be a huge migration from the Spain to the islands, because everyone was set to search for gold. . This turned out to be short lived as the mining of gold peaked in 1517 till 1819. By Spain using Cuba and Puerto Rico for mining gold they needed slave laborers as the local Indians. The Indians soon became unsatisfied with their new conditions of living, they became hostile and many not able to cope with being slaves committed suicide and genocide. By 1540 – 1550 silver was discovered in Mexico and Peru. As Spain found its’ new source of income in Mexico and Peru, it left Cuba and Puerto Rico to literally fend for themselves. By the 1590’s their economy began to prosper by cattle breeding and farming as this lead to new jobs on the islands. This new slow and uneven growth led supplies to be more expensive.

    Read More

  • Cuba's Achievements in Health Care and Public Education

    1748 Words  | 4 Pages

    There may be some question over Fidel Castro’s achievements in providing economic success, or democracy to Cuba in the last forty five years or so. However Cuba’s record on providing egalitarian health care and education to the masses have generally been agreed as a success story, even by Castro’s old enemy the United States. “To be educated is to be free,” (Marti in Marshall, 1987, p146) has become one of the more popular revolutionary slogans and has been greatly adhered to by Castro’s government. While health care is articulated in the 1975 Cuban constitution as being “the right of all and the responsibility of the state” (Feinsilver, 1993, p26). The social political stance of Castro’s government has been the driving force behind the success in health care and education. Issues such as housing, employment, health care and education are viewed as a basic human right and are in theory guaranteed by the state to all. In Cuba, health care indicators are also seen as a measure of the government’s efficiency and performance. Other socialist states that have come and gone over the last century have also professed to put these issues at the forefront of priority. States such as Russia and China have to a lesser or greater degree failed to provide the standard of services provided in Cuba. “Until 1969 China’s health care system served only the urban population, which represented about 15 percent of the total population” (Feinsilver, 1993, p2). There are certainly factors that make this comparison unfair but Cuba’s achievements in providing these social services are still quite remarkable given its economic position. By truly placing education and healthcare as one of the fundamental priorities of the revolution, and developing specific programs and initiatives to deal with these two social issues, Cuba managed to succeeded where others more wealthy nations failed. The use of popular participation and central government control also were powerful tools in implementing these social policies. It would now be useful to look at some of these initiatives that have been taken by the Cuban government that enabled it to equal if no surpass education and health standards in many developed countries.

    Read More

  • Trade Restrictions In Cuba

    661 Words  | 2 Pages

    Cuba has traditionally had many trade restrictions and trade barriers. There is some restructuring in state sector since 2010, but there are heavy regulations and tight state controls in the private sector. There are no open-market policies to improve growth in trade and investment, and the lack of competition continues to throttle dynamic economic expansion. Only government enterprises can enter into economic agreements with foreigners as minority partners; ordinary citizens cannot participate. Most of the means of production are owned by the government. Its planned economy discourages foreign trade and investment. The financial sector remains heavily controlled, and access to credit for entrepreneurial activity is seriously obstructed by the shallowness of the financial market. The government maintains strict exchange and capital controls.

    Read More

  • Cuba's Relations with the United States

    1362 Words  | 3 Pages

    In the early 1900’s, Cuba was a stomping ground for many of the rich and famous from the United States. Many famous movies stars and wealthy business entrepreneurs spend their vacations there along with a substantial amount of money. Trade and commerce between the United States and Cuba flowed freely and abundantly. Even with the Dictatorship-like regime of Batista, the countries benefited from the economic trade between them. This was all about to come crashing down as revolts against Batista occurred and Fidel Castro came to power within Cuba.

    Read More

  • The Cuban Revolution

    974 Words  | 2 Pages

    ... the majority of which sought refuge in the United States. With the fall of the Soviet Union, Cuba now stands at a crossroads. The battle cry has changed from “ Socialism or death to Resist, struggle and win” (Castro’s Cuba II). Hopefully, Castro and/or Cuba will not be forced into a market-based economy and all the materialistic commodities that go along with capitalism. In my opinion, Castro should hold out for as long as possible griping to the former battle cry “Socialism or death”. Only time will tell what the fate of Castro’s Cuba will be. Trade might once again flourish the economy, tourism might open up new economic opportunities and foreign investments from Italy, France and Spain could possibly dig Cuba out the current economic hole it’s in. Until then however, the battle against capitalism must not lose any of its vigor.

    Read More

  • Fidel Castro And The Cuban Revolution

    2000 Words  | 4 Pages

    ...tals.Cuba’s exporting dropped substantially due to the global economic downturn. Having low exporting rates called for huge losses in infrastructure and economy. Cuba’s previous investments in human development through past decisions have made for a great workforce. The problem is the economy’s insufficiency hasn’t been able to make good use of the this great work force. Because of Cuba’s commitment to education, health and a stable government, they have the potential for future growth as a country.

    Read More

  • Embargo on Cuba

    1000 Words  | 2 Pages

    The U.S. imposed an Embargo on Cuba on Oct. 19, 1960. Has the time come for the United States to lift the 5-decade embargo? The Embargo on Cuba was a part of America’s Cold War strategy against the Soviet Union, imposed on the basis that Cuba was a threat to the U.S. National Security because of their alliance with the Soviet Union. Although Cuba would like the U.S to terminate the embargo against their country, the U.S. wants Cuba to make their situation a better living environment and to promote human rights for its citizens.

    Read More

  • Describe the Causes and Discuss the Effects of the Cuban Revolution.

    973 Words  | 2 Pages

    However the US played a much larger role in Cuba’s past and present than the building of casinos and the introduction of the first taints of corruption. In the past, even before Batista, Americans were resented by Cubans because the Americans made a lot of Cuba’s decisions. Under Batista, 80% of Cuban imports came from the US, and the US controlled at least 50% of sugar, utilities, phones and railroads. If Cuba was a business in the stock markets, then the US would have been close to owning 50% of its shares. When combined with a long history of US-backe...

    Read More

  • The Cuban Missile Crisis

    1304 Words  | 3 Pages

    When looking back at the crisis that happened in Cuba, many things can be blamed. A stance that could be ...

    Read More

  • Standard Of Living In Cuban Essay

    404 Words  | 1 Pages

    The average wage in Cuba for an adult is only $25 dollars per week. Although that sounds harsh, because of their communist state that may not be so bad. Because the government gives the necessities of life such as employment, education, and healthcare, they are not poor like many other struggling countries. Housing, food and even some entertainment is available at low cost to the people. The homeless rate is very low. Cuban’s would rather overcrowd there own home than to let friends or family stay on the streets. With the Soviet Union crashed in 1990, it crippled the economy in Cuba. The Soviet Union stopped lending support in 1991 and then it got very bad. The standard of living declined drastically. The Cuban government refers to the economic

    Read More

More about Effects of lack of Competition on Cuba’s Economy

Open Document