Cuba 55 Years On: Impact of Supply Chains

Moment to moment it’s all about creativity and courage. Over the longer term though, it’s about supply chains and sustainability.Cuba is a case in point; its history is so visibly shaped by the interaction of these short term and long term realities.

Arriving in Cuba for the first time is like stepping into a time capsule that has preserved different periods of the country’s history. There’s old Havana filled with cobblestone streets and Spanish colonial buildings. Then there are art deco houses and buildings from the 1930s, and brightly colored and polished American cars from the 1950s: Cadillacs; Ford Fairlanes; and Chevy Nomads. Then there are the little Russian Lada sedans, and the big soviet-style apartment blocks. And mixing in with all that, you can see new Hyundai cars, and recently restored Spanish colonial buildings and art deco houses being turned into art galleries and restaurants. There was then, and is now, a different supply chain connected to each of these periods that made them possible.

Che and FidelChe Guevara and Fidel Castro – 1960 (courtesy Cuban Ministry of Education)

Cuba first rose to prominence because it was the place where the Spaniards brought the gold and silver they found in the New World and loaded it onto fleets of galleons for transport to Spain. As the gold and silver ran out it was replaced by sugar. Cuba was where much of the sugar came from to feed Europe’s insatiable demand for sweets.

After the Spanish colonial supply chains, came the Americans (Teddy Roosevelt and the Rough Riders leading the charge) and those supply chains focused on trade with the United States. Then came the Soviets (Fidel and Che leading the way). Cuba exported its sugar and rum and tobacco to the Soviet Bloc and got everything else it needed in return. Then that changed too. Now Cuba is entering a new period.

Talking with Cubans you get the idea they have learned something from their experience with supply chains. First Cuba was dependent on Spain, then the United States, and then Russia. Cuba learned something about putting all its eggs in one basket. They learned that when the basket breaks everything changes, and those changes are abrupt and hard to control.

Cubans seem eager to see things change again, but they don’t want the changes to be so abrupt, and they aren’t eager to simply exchange one master for another. They want supply chains that give them choices and don’t tie them so closely to just one source of supply.

In talking to people you often hear references to what they call the “Special Period”. That was the last time there was abrupt change caused by a single source supply chain falling apart. It was in the early and middle 1990s when the Soviet Bloc economy collapsed.

They say life was good in the 1980s when they supplied the Soviets with sugar and rum and cigars and in return they got everything else they needed. But then the Soviet Union was gone and so was everything they needed. They talk about years when people ate only one meal a day and that meal was rice and beans. They talk about gasoline being almost impossible to find and how China provided them with thousands of bicycles. But because they had so little to eat and bicycles require a lot of effort, people would pass out in the streets from exhaustion.

The Special Period brought home some very important lessons. It is the time when Cuba started experimenting with mixing communism and capitalism. They started allowing small businesses such as taxi cabs and restaurants and art galleries. And to find customers for those businesses and gain entry to the global economy the Cuban government started joint ventures with European hotel chains and Asian manufacturing companies. And they promoted tourism and stepped up their cultural exchanges to show off their talented artists, doctors and engineers to the rest of the world.

Economics is called the “dismal science” because of the way its realities limit options and require hard choices about where to place resources. Maybe supply chain management can be called the “practical science” since supply chains are what enable the success of the economic choices countries make (or doom those choices to failure).

For the last 55 years Cuba’s history has been driven by the decisions it made to cope with the changes that came about when its previous supply chain with the United States was abruptly cut off by the embargo in 1961. Now as that embargo is slowly lifted, this country is set to open up to a future where diversity and practicality will probably win out over purely political concerns.

The more diversified its supply chains are, the more independent Cuba can be. Fidel and Che had creativity and courage, and they had big ideas, but I wonder: 55 years ago did they realize the importance of supply chains and sustainability?

 

Written by: Michael Hugos
[I spent a week in Cuba in October as a member of a cultural exchange group from the United States.]

 

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