Shallow Pockets

Cuba’s economic challenges (and there are plenty).

The Cuban government’s introduction of dollar-based fuel stations is purportedly aimed at boosting tourism and alleviating travellers’ gas expenses. However, critics argue that it serves a political agenda, deflecting blame for inflation and shortages of household essentials onto the U.S. Such measures may not curb inflation but exacerbate it, with an austerity plan projected to spike retail prices by up to 500%, according to Cuban economist Omar Everleny. 

The government’s strategy involves several elements to combat inflation. Firstly, there are plans to license new foreign oil companies, rationalise energy flow and renew a portion of the vehicle fleet with more energy-efficient models. “Cuba has a vehicle fleet of around 370,000 units, so we cannot combat the scourge of inflation if we are unable to renew at least a percentage of this fleet with more energy-efficient vehicles,” stressed a trained diplomat and expert on economic issues.  

Secondly, efforts to counter the black market and “safeguarding the penetration of narco-money from abroad” are underway. The economist confirmed, “We do see quotas for micro or small entrepreneurs and a list of those who consume petrol to combat a black market.” Thirdly, a long-term plan involves rationing basic staples, reorganising productive activities and creating “micro-regional productive units which will help raise national productivity,” suggested a former official in the Ministry of Economy and Planning. 

“The Cuban government and its official structures are putting together a master plan to fight inflation at a time of multiple internal and external crises,” confirmed a trained diplomat. The government seeks to leverage the payment system, limit the circulation of currency and investigate fresh trade opportunities with China involving sugar and specific rare minerals. “This will give us more potential in productive activity to have banknotes and money backed by production, not by mere printing.” The former official agreed, “We should be accelerating agro-industry and not just the primarisation of the classics.” Protecting vulnerable groups, “especially in rural areas or in depressed urban centres on the periphery” and maintaining open channels for remittances are also part of the plan. 

“The Cuban government and its official structures are putting together a master plan to fight inflation at a time of multiple internal and external crises.”

Expert on economic issues who trained as a diplomat, Cuba

Local sentiment towards the government’s economic management is critical, with even public servants expressing discontent. Austerity measures, increased taxes and subsidy cuts have sparked concerns about the loss of quality of life. The former official of Ministry of Economy and Planning divulged, “The Cuban government is negotiating with allies to receive important supplies of grain, food and electricity, as well as to strengthen its food reserve capacity in the medium term.”

Amidst U.S. sanctions aiming to fuel protests and demand political change, Cuba remains resilient. “We will be more careful to avoid entry restrictions for Cubans living in other countries, because they bring remittances and foreign currency.” The former official elaborated, “In this plan, we must ensure that the next US president does not impose barriers to remittances from abroad, since before the pandemic they represented more than a quarter of the total volume of Cuban exports.” 

“we must ensure that the next US president does not impose barriers to remittances from abroad, since before the pandemic they represented more than a quarter of the total volume of Cuban exports.”

Former official in the Ministry of Economy and Planning, Cuba

The Cuban people, a “revolutionary resistance” and historically stoic against U.S. interference, continue their daily struggle. “Cuba has lived like this for more than 60 years with overt interventionist effects from Washington that have not been able to bring about a transformation.” The economic spiral since the disappearance of the USSR and the ongoing U.S. embargo has positioned Cuba in a constant struggle for survival. The economic expert exclaimed, “The US sanctions must have leaden feet because Cuba is looking for other bridges to allied and friendly countries such as China or Vietnam.” 

The possibility of protests in 2024 is plausible, given the recent social upheavals and increased internet accessibility, “We have a struggle in our pockets as well as a calculation of survival in the face of US power,” stated the former official. “The capitol in Washington must weigh up this situation because the aggression in the intervention is real, they must be balanced and marginalise the radical Cuban American core that has always sought direct intervention in Cuba.” 

As Cuba navigates economic challenges, the U.S. sanctions remain a persistent threat. The possibility of a migration crisis, a negotiation of foreign debt and a potential impact on U.S. domestic policy underscore the complex dynamics between the two nations. The Cuban government is actively seeking avenues for debt renegotiation, an end to the blockade and increased foreign investment. The outcome hinges on balancing political considerations, economic survival and the willingness to adapt to a changing global landscape. 

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