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 and mixed them all together. There’s old Havana, the center of the city, filled with block after block of cobblestone streets and two and three story Spanish Colonial buildings. Then there is Art Deco Havana with houses and buildings from the 1930s and 40s painted pastel shades of yellow, pink, light green and blue. And of course there is Soviet-style Havana with its drab concrete apartment blocks and office buildings. In some parts of the city buildings are run-down and in need of repair; in other parts buildings are being restored and turned into art galleries, restaurants and clubs. And circulating through all this is a stream of traffic composed of brightly colored and polished American cars from the 1950s: Cadillacs; Ford Fairlanes; Chevy Nomads; plus little Russian Lada sedans from the 1980s, and beat up trucks and buses and shiny new Hyundai cars and vans.
As you visit different parts of Havana you realize there was a different supply chain that supported each of these periods – Colonial, Deco, Soviet – and made each of them possible. [Picture: Che 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. And as the gold and silver ran out it was replaced by sugar. For some 200 years Cuba was where much of the sugar came from to feed Europe’s insatiable demand for sweets.
Then in 1898 the Spanish colonial supply chains came to an end, and the Americans (Teddy Roosevelt and the Rough Riders leading the way) set up new supply chains focused on trade with the United States. Then came the Soviets in 1961 (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. And then suddenly, that changed again in 1991 with the collapse of the Soviet Union. 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 hear them say life was good in the 1980s; Cuba supplied the Soviets with sugar and rum and cigars; and in return they got everything else they needed. But suddenly the Soviet Union was gone and so was everything they needed. That was the start of a time they call the “Special Period”. It was in the early and mid 1990s after the Soviet Bloc economy collapsed. 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 (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’s what happens when an abrupt and unexpected change occurs due to a single source supply chain falling apart. In the commercial world it’s referred to as “business continuity” and “supply chain risk management.” That is 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 are promoting tourism, and stepping up their cultural exchanges to show off their talented artists, musicians, 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 “pragmatic science” since supply chains are what enable the success of any economic choices a country may make (or doom those choices to failure).
For the last 55 years Cuba’s history has been driven by decisions it made to cope with the sudden changes that came about when its previous single source supply chain with the United States was cut off by the embargo. Now as that embargo is slowly lifted, this country is set to open up to a future where diversity and pragmatism 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 2015 as a member of a cultural exchange group from the United States.
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