November 30, 2021

Taiwan’s Wealth Shows Cuba’s Poverty Is the Result of Socialism, Not a Blockade

Cuba and Taiwan began the ’70s with similar economies, but today the GDP of the Caribbean island is five times less than that of Taiwan.

For decades the Communist Party of Cuba has blamed the United States for Cuba’s misery and poverty, alluding to the “blockade” that the U.S. maintains against Cuba. However, the alleged blockade wielded by the island is in reality a trade embargo that only makes it impossible for people and companies in certain sectors within the United States to do business with Cuba, the rest of the world can trade freely with the island.

Even the United States annually exports about $277 million in goods to Cuba despite the trade embargo, a majority of these exports are foodstuffs.

In addition, despite the establishment of a dictatorial regime in Cuba that has been in power for more than 60 years without any kind of alternation, elections or basic freedoms, the whole world recognizes the communist authorities and Cuba has a presence in all multilateral international organizations, the main one being the United Nations.

Then there is Taiwan, which has characteristics very similar to those of Cuba, since it is also an island that is close to one of the two world powers—China. In the case of the authorities of Taipei they have been completely blocked by the Asian giant, since China claims sovereignty over the island.

Taiwan is recognized by only a dozen nations around the world, has no representation in the United Nations, and its official name cannot even be pronounced at any international event: be it an Olympic Games, a United Nations General Assembly, or even by the embassies of most countries in the world—including the United States. And yet, despite all these difficulties, today Taiwan’s economy is one of the most important in the world, with a poverty rate of 0.7%, as opposed to Cuba, which has one of the most depressed economies on the planet and 90% of its population living in poverty. What is the difference between the two islands? The economic and political model they applied in their nations.

Two Islands With Similar Histories

Cuba and Taiwan, despite being located at two different poles of the planet earth, have very similar characteristics, the one that most resembles them is the fact that they are less than 200 kilometers away from the two superpowers of the world—the United States and China respectively—and suffer trade embargoes or political blockades by the neighboring superpowers; on the other hand, Cuba has a little more than 11. 3 million inhabitants—a couple of million more have fled the country, while Taiwan has 23.5 million residents, despite the fact that Cuba has a land area about three times larger.

Despite the similarities, both nations are currently a long way apart in terms of economic, social, cultural, and technological development, as well as individual freedoms and democracy. Today, Taiwan’s economy is five times larger than Cuba’s, but fifty years ago things were not so different, in the 1970s the GDP of both countries was similar and the largest industry of both was agriculture.

Taiwan: Capitalism, Liberty, & Free Markets

The painful results of the cultural revolution in Mao Zedong’s communist China, which caused the death by famine of at least 30 million Chinese, illuminated the path of the region’s governments, who quickly understood that the failed model of putting the State in control of the means of production would make them all more vulnerable and miserable.

Then the People’s Republic of China’s neighbors began a series of economic and political reforms that would drastically change the quality of life of their inhabitants; Singapore, Malaysia, South Korea and, of course, Taiwan, would begin to open their markets, encourage private enterprise and transform their authoritarian regimes into nations with democratic institutions, and little by little the sun began to shine for the so-called Asian tigers.

Despite territorial limitations and China’s political blockade of the island, Taiwan’s inclusive institutions paved the way for the production of technology to supply a severely deficient world market. Taiwanese entrepreneurs began to specialize in the production of semiconductors, those microchips that today we find in all electrical devices in the world, from computers to smartphones and even cars, and little by little the poor island of the past became a rich and developed country.

Currently, Taiwan has the sixth freest economy according to the Index of Economic Freedom, Singapore is the first nation in this section, while Malaysia ranks 22nd and South Korea 24th.

In an article published by the Taiwanese embassy in Mexico, the authorities stated that: “Taiwan, thanks to the policies of its government, began a rapid and overwhelming commercial development, becoming a stable industrial economy. Today it is the 22nd largest economy in the world. This allowed it to establish relations with countries that were in search of good trade relations.”

In the same brief they explain the transition that occurred in Taipei:

“Despite having started as a one-party military dictatorship, in the 1990s it began a process of democratization that today has it as one of the freest countries in the world, with high rates of press freedom, health service, public education, economic freedom and human development. That is why communist China sees Taiwan, and its international recognition, as an existential threat. The contrast is stark. Democracy has not only proven that it can work, but has brought multiple benefits to the population. The Taiwanese have a better quality of life, and opportunities for personal development, than the average Chinese on the mainland. And all this within a framework of freedoms that are unthinkable in a communist China that censures dissidence and whose ruling party increasingly tightens its control over all aspects of the country”.

Cuba: Socialism, Misery, & Ideology

On the other side of the planet, in Cuba, they decided to cover their eyes with the results of the cultural revolution perpetrated in China, and with the collapse of the Soviet Union. While Taiwan took off with a capitalist model, Cuba remained anchored in the old revolutionary dogmas of Fidel Castro, who far from trying to change, he sought to expand his regime of misery in the rest of the continent, achieving it quite successfully in countries such as Venezuela and Nicaragua.

The Cuban revolution took power on the island in 1959 by force of arms and never let go again. With popular slogans such as redistribution of wealth, supposed aid to the poor, and socialism, Fidel Castro began to expropriate land and private companies to be managed by the state, and in a short time Cuba, which used to be one of the largest producers and exporters of sugar in the world, found that it could no longer even produce sugar for internal consumption and had to import it.

For decades, the Cuban revolution was able to stay in power exclusively thanks to the financing offered by the Soviet Union with the aim of increasing the ideological enemies in the backyard of the United States. After the fall of the USSR, in the 90’s Cuba lived one of the worst decades of its history, until the political astuteness of Fidel Castro managed to put Hugo Chavez in power in Venezuela, and since then they lived off the oil of that country, until the same failed socialist model ended up ruining the nation with the largest oil reserves in the world, and Cuba was again involved in a tremendous economic crisis, with millions of citizens in extreme poverty, which has recently provoked one of the largest civil uprisings against the communist authorities.

Cuba and Taiwan began the decade of the ’70s with similar economies, but today the GDP of the Caribbean island is five times less than that of Taiwan, and 90% of its population lives in poverty, while in the Asian island only 0.7% of its population is poor.

It is definitely not the fault of the “blockade”, but of socialism.

A version of this article originally appeared in El American.

This article, Taiwan’s Wealth Shows Cuba’s Poverty Is the Result of Socialism, Not a Blockade, was originally published by the Foundation for Economic Education and appears here with permission.  Please support their mission.