Cuba’s communist leaders are within the midst of disaster – and never for the primary time.
On Oct. 18, 2024, the nation’s electrical grid failed, leaving Cubans with out lights or refrigeration. Blackouts have endured since, and as of Nov. 4 they present no signal of letting up.
These energy failures type half of a bigger financial disaster, the worst since 1991. Cuba burns oil to generate electrical energy and, put merely, it can not pay for the oil it wants, a lot much less keep the electrical system. This has led to extreme shortages not solely of electrical energy but in addition gasoline, meals and medical provides.
Cuba’s newest disaster has led observers to query the regime’s viability, with many asking whether or not now may very well be the time for Cuba’s communist authorities both to reform or collapse.
To a scholar of Cuban historical past like myself, it’s a good query. Cuba’s leaders have endured related crises for greater than six a long time – sustaining a monopoly on political energy all through. The explanation lies much less in ideological dedication than within the capability of Havana’s leaders to grow to be the purchasers of highly effective overseas patrons. Cuba’s communists have additionally confirmed keen to reverse course when their survival calls for it.
This time, nonetheless, it isn’t clear that both technique will likely be ample for the heirs of Fidel Castro to protect their energy.
Buying and selling sovereignty for prosperity
Traditionally, Cuba has achieved a measure of prosperity by forging buying and selling relationships with highly effective nations.
These dealings have typically taken the type of “patron-client” relationships, during which a robust nation has propped up the Caribbean nation’s financial system however infringed on Cuba’s sovereignty within the course of.
From 1898 to 1959, Cubans bought sugar within the U.S. below a quota system considerably favorable to Havana. In trade, People constructed bases on Cuban soil and bought their items in Cuba with minimal constraints, whereas sustaining a proper to intervene in Cuba’s politics.
However after the Cuban Revolution led to 1959, the US severed diplomatic and financial ties with the brand new regime, and the Soviet Union grew to become Cuba’s patron.
Many years of Soviet help
For 30 years, Moscow purchased Cuban sugar at inflated costs and bought Russian oil at under market costs, whereas equipping Cuba’s armed forces. These subsidies amounted to greater than US$4 billion per 12 months within the Nineteen Eighties.
In return, Cuba’s leaders permitted Soviet bases on their soil, conveniently lower than 100 miles from Florida, and supported Soviet overseas coverage aims, such because the invasions of Czechoslovakia in 1968 and Afghanistan in 1979.
In 1991, nonetheless, the Soviet Union collapsed. With out Soviet subsidies, Cuba went into an financial tailspin.
A ‘Special Period’?
Between 1991 and 1993, Cuba misplaced one third of its GDP.
Meals, gasoline and electrical energy grew to become scarce. Public transportation largely disappeared, changed by horses, bikes and bike taxis.
Longtime dictator Fidel Castro referred to the period because the “Special Period in time of Peace.” However I do know Cubans who keep in mind the Nineties as a time of consuming beans, rice and grapefruit peels after they have been fortunate, sugared water after they weren’t.
It was oil-rich Venezuela that introduced Cuba out of the Particular Interval. In 1999, a regime pleasant to Castro took energy in Caracas, headed by army chief Hugo Chavez. Chavez supplied oil to Cuba in trade for docs, academics and advisers for his army and safety forces.
Not like the U.S. and Soviet Union, Venezuela had no motive to compromise Cuba’s sovereignty; the 2 nations already had widespread allies and adversaries.
In 2015, a Cuban economist advised me that Venezuela’s subsidies amounted to a minimum of $4 billion per 12 months.
After a short respite, the U.S. reimposed sanctions on Venezuela in 2024 as President Nicolás Maduro reneged on his promise to carry free and truthful elections. Venezuela now sells oil to middlemen whereas supplying Cuba with petroleum in secret, in quantities and high quality far under Cuba’s want.
The consequence has been the deepening of Cuba’s financial decline.
Since 2020, the Cuban GDP has shrunk, as has tourism. Inflation runs rampant in each official and “gray markets,” non-public networks that function outdoors of official sanction and cost greater costs.
Havana adjustments when it must
With out an apparent new patron to prop up its financial system, Cuba’s leaders have needed to flip to different techniques to alleviate the strain – or tamp it down.
However coercion has all the time performed a job central to the Cuban authorities’s survival.
Although the regime permits Cubans to complain in public, they can’t agitate for political change with out receiving harsh remedy. For instance, the federal government has threatened opponents with prosecution in the event that they manage protests in the course of the present disaster.
In different respects, nonetheless, the regime has modified when its survival requires it to take action. This may be seen within the development of personal enterprise within the formally communist nation. Till the 2000s, Cubans labored for the state and held solely negligible quantities of wealth.
However restricted financial privatization starting in 2008 has meant that immediately one-third of all Cubans make their dwelling within the non-public sector, up from 23% in 2020.
The expansion of Cuba’s non-public sector lessens calls for on an already underresourced public sector, whereas permitting for a larger circulation of products and providers – and much-needed onerous foreign money.
Financial crises have occurred all through Cuba’s trendy historical past.
Yamil Lage/AFP by way of Getty Photos
However by far, the Cuban authorities’s largest change considerations emigration. For the reason that Sixties, the communist authorities condemned Cubans who left as “worms,” or enemies of the revolution.
Now, the federal government permits Cubans to go away with little to no interference.
Greater than 1,000,000 Cubans have emigrated since 2022, about 10% of the inhabitants. The U.S. stays their high vacation spot, together with Spain and different Spanish-speaking nations.
Cubans who attain the U.S. can apply for parole on the U.S. border and dwell in the US – with a piece allow – if they’ve American sponsors. After one 12 months, they qualify for residency.
U.S. coverage eases Cuba’s issues
Emigration means fewer calls for on public providers and scarce sources, resembling meals and electrical energy.
It additionally eases a important housing scarcity, making extra housing obtainable at extra reasonably priced costs to the Cubans who keep.
Emigration additionally means fewer Cubans in Cuba with the power to prepare for political change.
And having extra Cubans abroad will help the house financial system, with these in higher-wage nations capable of ship onerous foreign money again to their family members and buddies – who will in flip spend the money in Cuba.
Can Cuba’s authorities maintain out?
Cuba’s leaders have modified after they felt compelled to take action. As as to if the easing of personal sector and immigration restrictions will purchase them sufficient time to seek out one other patron, nonetheless, is anybody’s guess.
China and Russia might select to grow to be patrons of Cuba, partly as a approach to get a foothold in a nation so near the U.S.
Each nations reportedly have elevated ranges of funding in Cuba, whereas receiving some financial privileges and bases in return.
However it’s unclear whether or not China and Russia will likely be keen to supply the billions of {dollars} in subsidies the Cuban authorities wants.
China, for instance, has different extra worthwhile funding choices in Latin America. And caught in a battle of its personal making, Russia has little spare army forces or money.
Regardless of the case, Cuba must discover a answer to its present disaster. If a patron shouldn’t be forthcoming, the Cuban authorities might face tougher selections, resembling rising repression or allowing each financial and political liberalization.
And that could be a selection Cuba’s leaders wish to keep away from.
