Emilio Morales, a Cuban-American and President & CEO of Havana Consulting Group, a Miami-based consulting firm specializing in market intelligence and strategy for U.S. and non-U.S. persons doing business in Cuba, offers a blistering appraisal of the current status of the Cuban economy.[1]
He begins his article with the following statement: “The Cuban government’s announcement that it is in a state of war economy is a public recognition of the failure of the Cuban model. In reality, the country has been in a state of war economy for more than six decades; it is not something that suddenly emerged at the last minute. The war economy is the very essence of the system, it is its genetic basis, it is the matrix of control that dictator Fidel Castro implemented since the triumph of the revolution in 1959 and that has lasted from then until today. It was the most effective way to achieve citizen control. Very simple: it was necessary to eliminate all sources of wealth creation in the hands of citizens, take control of them in their entirety and find someone to blame for the economic debacle that would follow.”
“Today, the macabre plan executed by Fidel Castro since January 1, 1959 has had a great result: the Cuban economy is a disaster, its industries are in ruins, its banks are bankrupt , the state enterprise is totally decapitalized, foreign investment is scarce – in the last five years it has been practically zero -, more than 80% of the population lives in poverty, the country practically does not export because it does not produce. The productive forces are gagged by the system, by a legal system that does not allow free enterprise and limits the generation of wealth by citizens. Today the country depends on imports of products and raw materials, but does not have the financing to maintain them, because it has lost its lines of credit for not paying its external debt with creditors. This, added to the debacle of agricultural production has led to a deep shortage of products that has generated the worst inflationary crisis in the history of the country.”
“As a result of this debacle, a multi-systemic crisis has been unleashed in the country unprecedented in history, which has given rise to massive citizen protests never seen in more than 60 years of tropical communism , such as those that occurred on July 11, 2021 (11J) and which, given the current circumstances, can be repeated at any time, since the country has become a true social powder keg, which can explode under any circumstance. As part of this crisis, the largest wave of migration in the country’s history has been unleashed, which has resulted in the emigration of more than 850,000 Cubans to the United States alone by various means in the last three years. According to a recent study, 1.79 million people have left the country between 2022 and 2023.”
Morales ends the article with the following conclusions:
- “Once again, the Cuban regime is entangled in its clumsy strategies. The announcement that they are going to a war economy —when they have always been one— has a clear objective: to blame the embargo for the ills that afflict the Cuban economyand to try to influence the strategists who dictate the Biden Administration’s policy towards Cuba to somehow loosen the sanctions currently in force and the embargo.”
- The U.S. “embargo has little weight in the collapse of the Cuban economy,since in practice the country that supposedly blocks them is one of their main suppliers, not only of food products, but also of financial capital (remittances) that Cuba acquires abroad. For example, the United States is the main supplier of chicken to the Island. 95% of the remittances that arrive in Cuba come from the United States.”
- “It is obvious that the collapse of the Cuban economy and the multi-systemic crisis that is ravaging the country is a purely internal problem. The inflationary crisis that is ravaging the country, plus the rest of the crises that are occurring in the internal economy: the collapse of the transportation system, the collapse of the energy matrix, the collapse of the water supply, the collapse of the health system, the lack of food and medicine, the housing problems, the low agricultural production, the shortage of food products and other types of products, are the sole and exclusive responsibility of the Cuban regime. Its policy of coercion of citizens, based on terror, by limiting their rights to political and economic freedom, freedom of association, expression and movement.”
- “The only way to stop the inflationary explosion and all the ills that plague the country’s economy is to get out of this parasitic and hegemonic system under which the Castro family has been exploiting Cubansand stealing the country’s wealth for 65 years.”
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[1] Morales, ‘War economy’: the Cuban regime’s psychological torture mechanism, Diario de Cuba (July 12, 2024).