In the midst of the flurry of recent commentary about the new U.S. policies regarding Cuba, including this blog’s current exploration of the many facets of those policies, it is easy to ignore or forget Cuba’s very difficult current economic situation, which only will be made worse by these U.S. policies. Here is some information about that economy.[1]
According to the Associated Press, “After two decades of relative stability fueled by cheap Venezuelan oil, shortages of food and medicine have once again become a serious daily problem for millions of Cubans. A plunge in aid from Venezuela, the end of a medical services deal with Brazil and poor performances in sectors including nickel mining, sugar and tourism have left the communist state $1.5 billion in debt to the vendors that supply products ranging from frozen chicken to equipment for grinding grain into flour, according to former Economy Minister José Luis Rodríguez.”
“That economy is afflicted by deep inefficiency and corruption. Many state employees demand bribes to provide services to the public. Others spend only a few hours a day at their jobs, spending the rest of their time doing informal private work or selling supplies stolen from their office, warehouse or factory. Despite a highly educated and generally well-qualified workforce, Cuba’s industrial sector is dilapidated after decades of under-investment. The country produces little of value on the global market besides rum, tobacco and the professionals who earn billions for the government working as doctors, teachers or engineers in friendly third countries.”
“The agricultural sector is in shambles, requiring the country to import most of its food. Economy Minister Alejandro Gil said Saturday that Cuba would spend $5 billion on food and petroleum products this year.”
“Over the last 20 years, many of those billions came from Venezuela’s socialist government, which has deep ties to Cuba’s and sent nearly 100,000 barrels of oil daily for years. With Venezuela’s economic collapse, that has roughly halved, along with deep cutbacks in the economic relationship across the board. And the news has been bad in virtually every other sector of the Cuban economy. Nickel production has dropped from 72,530 metric tons in 2011 to 50,000 last year, according to Rodríguez, the former economics minister. The sugar harvest dropped nearly 44%, to a million tons. The number of tourists grew only 1%, with many coming on cruise ships, a relatively unprofitable type of visitor. Overall GDP growth has been stuck at 1% for the last three years.”
“Meanwhile, under agreements Castro struck to rehabilitate Cuba’s creditworthiness, the country is paying $2 billion in debt service to creditors such as Russia, Japan and the Paris Club.”
“Stores no longer routinely stock eggs, flour, chicken, cooking oil, rice, powdered milk and ground turkey, among other products. These basics disappear for days or weeks. Hours-long lines appear within minutes of trucks showing up with new supplies. Shelves are empty again within hours.”
“No one is starving in Cuba, but the shortages are so severe that ordinary Cubans and the country’s leaders are openly referring to the ‘special period,”’the years of economic devastation and deep suffering that followed the collapse of the Soviet Union, Cuba’s Cold War patron.”
“‘It’s not about returning to the harshest phase of the special period of the ’90s,’ Communist Party head Raul Castro said last week. ‘But we always have to be ready for the worst.’”
“Two days later, President Miguel Díaz-Canel said cutbacks were necessary because: ‘This harsh moment demands we set clearly defined priorities in order to not return to the worst moments of the special period.’’”
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[1] Assoc. Press, Shortages Hit Cuba, Raising Fears of New Economic Crisis, N.Y. Times (April 18, 2019).
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