Cuba : economic issues Essay

1249 Words Nov 9th, 2013 5 Pages
In economics, the term currency can refer either to a particular currency, for example the BD, or to the coins and banknotes of a particular currency, which comprise the physical aspects of a nation's money supply. The other part of a nation's money supply consists of money deposited in banks, ownership of which can be transferred by means of cheques or other forms of money transfer. Deposit money and currency are money in the sense that both are acceptable as a means of exchange, but money need not necessarily be currency.

Historically, money in the form of currency has predominated. Usually (gold or silver) coins of intrinsic value commensurate with the monetary unit (commodity money), have been the norm. By contrast,
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Causes of currency problems in Colombia:
1- Political instability in Colombia:
The current instability in Colombia derives from the growth of armed challenges to the state's authority. The source of instability is reflected in the growth of guerrilla armies , paramilitaries and privatized security forces. The confluence of this factor has exacerbated even deeper problem in Colombian society. including loss of central government authority, economic deterioration and maybe creating the condition of a failed state which is characterized by a sever political crisis in which the institution of central government are so weakened that the can no longer maintain authority or political order beyond major cities and sometimes not even there.
The Colombian economy begun to unravel in the mid of 1990 as a result of a complex political crisis. Colombian's recession deepened as the economy contracted at annual rate of 7.6 percent in the second quarter of 1999. Urban unemployment hovered near 20 percent and the government projected a 3.5 projected decline in GDP for the year. The ongoing political violence entailed substantial economic costs. The economic cost of the political violence in Colombia has been estimated at between 4 and 9 percent of GDP. 2- The illegal drug industry:
The illegal drug trade weakened the country's economy by fostering violence and corruption, undermining legal activity , frightening off foreign

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