Cuban embargo and Economic Impact


The Cuban embargo did not deter internal investment, but only external investments. However, the embargo did hamper economic growth in the country. Never the less, it is not the embargo that worries policy makers and researchers alike, it is the failure of the US government to institute measure that will see the country change its regime or deters foreign investments. For example, there were a number of foreign investors in Cuba and almost 50% of the companies were foreign owned. However, in as much as these companies were not US owned, it become clear that the role of the US companies in the Cuban economic growth was felt as the country’s deterrence of its people from investing in Cuban plus the additional investments in the country mean that the US export hampered its growth. This paper argues that he embargo relaxation will help in improving Cuba’s economic situation.

The embargo lift means that:

1). Expansion of travel to Cuba under general licenses.

2). Remittances levels will rise from $500 to $2,000 per quarter for Cuban nationals,

3). The limited types of exports allowed to Cuba will be expanded to include certain building materials for private residential construction, goods for use by Cuban private sector Cuban entrepreneurs and agricultural equipment.

4). The almost total ban on imports from Cuba will be relaxed to allow travelers to bring in up to $400 worth of Cuban merchandise processing transactions between U.S. and Cuban banks will be faster and easy

5). The restriction on foreign flag vessels calling on the U.S will ease

Even thigh a regime change was required; the regime change was not affected as the Raul and Fidel Castro were one and the same. The This only indicates that fact that regime change could not help the country economy. How then will the lifting of the Cuban embargo affect the Cuban economy?

The Cuban economy is set to change for the best, the country’s economic growth will increase as the US exports to the country and Cuba’s export to the US will lead into a balance of payment which is good for the Cuban economy (Hanson, Batten & Ealey, 2013). With new business going to Cuban, the country will experience new technologies, ideas and products that will not only improve the life of the Cubans, but also improve their economic situation. Even though the embargo lift was not complete as there were still undisclosed limitations, over 5000 companies from different countries importing to, exporting from and providing their services to Cuban will streamline their business as more investors from the US will be exporting to Cuba, and investing within Cuba. Therefore, even though the US isolation affected Cuba’s economy, it also helped the president to institute radical economic policies reforms geared at improving the economy (Watson, & Boguhn, 2014).

The Helms-Burton Act failed to dislodge Fidel Castro, but it slowed the country’ economic growth. The US unilateral sanction was to force economic and foreign policy objectives did not onyx affects Cuba but also the US economy in terms of foreign currency earning and job creation

By lifting the sanctions on the ships that travel between Cuba, and the US ports, and streamlining the currency exchange process, America only contributed in helping Cuba implore its political system and the economy (Griswold, 2005). The number volume of export to Cuba is expected to increase by 200%, and the Cuba’s exports to the US will double helping Cuba realize a positive balance of payment. Americans firm will have a stake in the Cuban economy. This means that technological innovations will help Cuba improve its production volume and value addition. The country’s outdated infrastructure will also be upgraded thanks to FDI helping to ship goods such as soy, wheat, piety and pork to Cuba. Technology firms will flood the Cuban market despite the US control on Cuban communication. US independent banks will come to Cuban to exploit the new investor’s confidence. This mean that that lifting the embargo will help Cuba recover from its economic downturn as the the inflow and outflow of goods and services will help Cuba earn foreign currencies.


In conclusion, ending the embargo has a lot of economic benefit to Cuba, and even to the US as it will increase the economic opportunities to Cuba in terms of economic reform, and positive balance of payment.


Watson, L., & Boguhn, A. (2014). Right-Wing Media Lash Out After Obama Announces Deal With Cuba. Media Matters for America. Retrieved 29 April 2015, from

Griswold, D. (2005). Four Decades of Failure: The U.S. Embargo against Cuba. Cato Institute. Retrieved 29 April 2015, from

Hanson,, D., Batten, D., & Ealey, H. (2013). It’s Time For The U.S. To End Its Senseless Embargo Of Cuba. Forbes. Retrieved 29 April 2015, from


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