If the current trajectory continues, the country could face a deeper collapse, says the British magazine.
MIAMI, United States. – Cuba is heading towards an economic and social “disaster” if its regime does not drastically modify its model, warned the British magazine The Economist in an analysis of the current crisis on the Island. The weekly maintains that, if the current trajectory continues, the country could face a deeper collapse, with greater shortages, prolonged blackouts and an even greater exodus, in a context in which the Government lacks the resources to import food and fuel.
The text, published last Tuesday, describes a country where the economy has shrunk steadily since 2018, inflation and the devaluation of the peso destroy purchasing power and large sectors of the population depend on remittances or the informal market to survive. According to the data cited by the magazine, the gross domestic product is well below pre-pandemic levels and public investment is insufficient to sustain basic infrastructure such as the electrical system.
The Economist It portrays a Havana subjected to frequent blackouts and entire neighborhoods in darkness, while the State tries to ration fuel that is increasingly expensive and difficult to obtain. It also highlights that the shortage of foreign currency limits the Government’s ability to buy oil abroad, which in turn impacts transportation, industry and daily life. Likewise, remember that Cubans “spend hours in lines to get basic food” and that the network of foreign currency stores has created a fracture between those who receive dollars or euros and the rest of the population, forced to face runaway prices in pesos.
The analysis indicates that, although the authorities insist on blaming the US embargo, the crisis is, to a large extent, the result of internal decisions. The Economist indicates that the Government “blames the embargo, but the crisis is largely of its own making,” alluding to the persistence of the state monopoly over key sectors, the lack of legal security for new economic actors and the inability of the authorities to control inflation after monetary unification and the devaluation of the peso.
In addition, the publication reviews the reforms initiated during the mandate of Raúl Castro and continued, unevenly, by Miguel Díaz-Canel. It recalls the limited expansion of the private sector, the authorization of small and medium-sized businesses and the partial opening to foreign investment, but emphasizes that these changes have always been conditioned by the Communist Party’s fear of losing political control. Consequently, many of the reforms are half-heartedly implemented, reversed, or trapped in bureaucracy, while military and state conglomerates retain the most profitable positions in the economy.
Another central element of the article is the demographic crisis. The Economist warns that Cuba has become one of the oldest countries in Latin America, with a declining birth rate and a massive migration of young people and professionals. It also highlights that, in recent years, hundreds of thousands of Cubans have left the Island for the United States and other destinations, which deprives essential services such as health and education of qualified labor. The report links this talent drain to low salaries, lack of prospects and political repression.
Tourism, one of the main sources of foreign currency earnings, has also failed to fully recover after the pandemic, according to the magazine, which explains that hotels hastily built over the past decade operate with low occupancy, while infrastructure deteriorates and many visitors opt for other better-connected Caribbean destinations with fewer restrictions. Added to this are the US sanctions, which limit travel from that country, and the poor quality of services due to general shortages.
At the social level, the article describes a climate of frustration and disenchantment, which was expressed in the protests of July 2021 and in other later episodes. The magazine recalls that the Government’s response has been repression, with long prison sentences and a reinforcement of political control, which increases the cost of any future protest attempt. The Economist warns that, if the economic deterioration continues, the regime could face new social explosions or be forced to further increase repression to sustain itself.
Likewise, it proposes several possible scenarios for the immediate future of the Island. One of them is the prolongation of the current stagnation, similar to the Venezuelan case, with an increasingly contracted economy and a population that escapes by any means. Another, which the magazine identifies as the most desirable but also the most difficult, would be a Vietnam-style economic and political opening, which allows the private sector to grow, attracts foreign investment and frees the State from direct control of most companies. To do this, he warns, the Communist Party would have to accept a loss of power that until now it has not been willing to assume.
In his conclusions, The Economist insists that without profound structural changes the country is headed for a worsening of the crisis. The magazine argues that the Government should reduce the role of military conglomerates, grant greater autonomy to private companies and cooperatives, make agriculture more flexible and offer real guarantees to investors. Otherwise, Cuba will remain trapped in what it describes as a downward spiral of impoverishment and emigration.
