Fulgencio Batista's Economic Policies, 1952 - 1958

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Fulgencio Batista's Economic Policies, 1952 - 1958

Michael P. McGuigan

University of Miami, mmcguiga@

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UNIVERSITY OF MIAMI

FULGENCIO BATISTA'S ECONOMIC POLICIES, 1952 ? 1958

by Michael Patrick McGuigan

A DISSERTATION Submitted to the Faculty of the University of Miami in partial fulfillment of the requirements for for the degree of Doctor of Philosophy

Coral Gables, Florida August 2012

?2012 Michael P. McGuigan All Rights Reserved

UNIVERSITY OF MIAMI

A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy

FULGENCIO BATISTA'S ECONOMIC POLICIES, 1952 ? 1958

Michael P. McGuigan

Approved:

________________ Steve Stein, Ph.D. Professor of History

________________ Eduardo Elena, Ph.D. Professor of History

________________ Luis Locay, Ph.D. Professor of Economics

________________ M. Brian Blake, Ph.D. Dean of the Graduate School

________________ Kate Ramsey, Ph.D. Professor of History

MCGUIGAN, MICHAEL P. Fulgencio Batista's Economic Policies, 1952 ? 1958

(Ph.D., History) (August 2012)

Abstract of a dissertation at the University of Miami.

Dissertation supervised by Professor Steve Stein. No. of pages in text (335)

Fulgencio Batista ruled Cuba from March 10, 1952 to December 31, 1958 and

initiated the most ambitious and expensive government economic stimulus programs in

the island's history. He took power by military coup and overthrew the constitutionally

elected Aut?ntico President Carlos Pr?o Soccor?s. Batista immediately took credit for

restoring security, order, progress, and honest government to the island. However, he

lacked an official public mandate to rule acquired through an election, therefore, he

sought acceptance by appealing to Cubans' economic needs.

In the months following the coup, Batista decided on a stimulus plan that in many

ways followed the recommendations from international and domestic economists. It

called for the restructure of existing government development finance agencies such as

the Agricultural and Industrial Development Bank, and the creation of new ones.

Batista's approach to promote economic diversification and growth called for central

management to provide low-cost credit and other assistance to non-sugar industries.

Batista publicized his economic programs as national triumphs. Therefore, their

performance in part determined his popular appeal. The study focuses examination on

the dynamics, ideology, logic, efficiency, stakeholders and realized returns of Batista's

domestic economic development programs. This data is then employed to understand the

links between his economic policies and Fidel Castro's ability to acquire support, wage

war, and eventually take over the island.

Contents

List of Tables ...................................................................................................................... v Preface................................................................................................................................ vi Chapter I. Introduction: The Cuban Economy in 1952...................................................... 1

Single Export Economy................................................................................................... 5 Specialization versus Diversification ............................................................................ 17 Land Use and Ownership .............................................................................................. 21 Financial System............................................................................................................ 27 Labor.............................................................................................................................. 38 Chapter II. Studies of the Cuban Economy and Policy Recommendations Available to Batista in 1952........................................................................................... 44 American Studies of the Cuban Economy..................................................................... 45 International Bank for Reconstruction and Development (IBRD) ................................ 59 The Cuban School ......................................................................................................... 66 Consensus ...................................................................................................................... 76 Chapter III. Raising Expectations .................................................................................... 79 "This is the man ............................................................................................................. 79 The New Government ................................................................................................... 84 The Domestic Coalition................................................................................................. 89 Foreign Policy................................................................................................................ 95 The Constitutional Act of 1952 ..................................................................................... 99 Initial Economic Policies............................................................................................. 102 Programa econ?mico m?nimo ..................................................................................... 113 Expansion of the BANFAIC........................................................................................ 120 Batista es la paz! Batista lo har?! .............................................................................. 124 Chapter IV. "The Building Boom was Sensational" ..................................................... 135 Symbols of Progress .................................................................................................... 150 Mortgage Insurance Institute (Fomento de Hipotecas Aseguradas)............................ 154 "How Americans Lose Their Shirts"........................................................................... 155 July 26.......................................................................................................................... 162 National Finance Agency (Financiera Nacional de Cuba) .......................................... 164

iii

Chapter V. Election Year ............................................................................................... 180 "The works we have started... have inspired confidence in our regime" ................... 188 Labor Relations............................................................................................................ 194 Economic and Social Development Plan..................................................................... 197 The Campaign.............................................................................................................. 200 A Voice from Cuba, in Geneva and Petropolis ........................................................... 207

Chapter VI. Batista's Road to Prosperity....................................................................... 212 Return of the Constitution ........................................................................................... 212 National Economy Council ......................................................................................... 213 The Slow Recovery ..................................................................................................... 215 Debt and Spending for Economic Development ......................................................... 226 Hotel Law 2074 ........................................................................................................... 233

Chapter VII. "Cuba Enjoys a Boom in Prosperity" ....................................................... 239 Investment in Cuba: basic information for United States businessmen ...................... 247 Cultivating International Relationships ....................................................................... 250 Selective Economic Growth ........................................................................................ 252

Chapter VIII. Two Worlds Apart................................................................................... 257 "There are no rebels in the Sierra Maestra" ................................................................ 266 Robin Hood.................................................................................................................. 275 The Lost Dream of the Monte Carlo ........................................................................... 280

Chapter IX. Conclusions ................................................................................................ 284 Agricultural Developments, 1952?58.......................................................................... 287 Industrial Developments, 1952?58.............................................................................. 295 Construction and Real Estate Development ................................................................ 301 Batista's Development Programs and Unemployment................................................ 306 Waste, Cronyism, Stakeholders, and the Disenfranchised .......................................... 308 Batista's Gamble: Economic Development over Defense .......................................... 316

Abbreviations .................................................................................................................. 320 Selected Bibliography..................................................................................................... 321

iv

List of Tables Table 1. Principal Crops Grown in Cuba, 1945................................................................. 6 Table 2. Method of Operation of Farms, 1946 ................................................................ 22 Table 3. Council of Ministers, March 11, 1952 ............................................................... 86 Table 4. Net National Product, 1948?58 ....................................................................... 139 Table 5. Per Capita Net National Product, 1948 ? 58.................................................... 140 Table 6. Population, Employment and Unemployment: 1953 Census .......................... 141 Table 7. Public Revenues and Expenditures, 1951?57.................................................. 142 Table 8. Budgetary Expense in Cuba, 1950?57............................................................. 143 Table 9. ........................................................................................................................ 216 Table 10. Expenditure as a Percentage of GNP, 1950?57 .............................................. 217 Table 11. Per Capita Expenditure, 1950?57 ................................................................... 217 Table 12. Cuba's Public Debt ......................................................................................... 227 Table 13. Distribution of Public Sector Credit 1952?58 ................................................ 227 Table 14. Bond Issues of the Autonomous Institutions, as of June 1955 ....................... 228 Table 15. New Enterprises in 1956................................................................................. 243 Table 16. Cuban Rice Production and Imports, 1950?55. .............................................. 254 Table 17. BANDES Projects, 1957?58........................................................................... 271 Table 18. Agricultural Production .................................................................................. 289 Table 19. Cuba: Physical Volume of Selected Industrial Productions, 1952?57 ........... 297 Table 20. Operations of the Mortgage Insurance Institute, 1952?58 ............................. 304

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