In March 2016, Barack Obama became the first US president to visit Cuba since Calvin Coolidge in 1928.
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This kicked off a boom in private sector activities in Cuba and prompted reforms by the Cuban government aimed at restructuring the economy. However, the government was unwilling to reduce its grip on the centrally planned economy, and the reforms moved too slowly to produce any meaningful improvement.
Then, in his final week in office in 2021, Donald Trump reimposed trade restrictions targeting tourism, remittances, and energy supplies, as well as adding Cuba to the list of “state sponsors of terrorism”. The move led to severe shortages and inflation, both of which were worsened by the pandemic.
Logistical bottlenecks disrupted supplies and inflated shipping costs further. Heavily dependent on tourism, Cuba suffered a severe depletion of its foreign currency reserves.
Patience is running out
The economic situation has continued to decline. Export earnings in 2023 were still US$3 billion short of their pre-pandemic level, and Cuba’s economic output is not expected to return to its level before the pandemic until after 2025.
Half a million people – most of whom were young – left the country for the US between 2021 and 2022. And thousands more have made their way to Brazil, Russia, Uruguay and elsewhere in an exodus that is unprecedented in the history of the island.
The future outlook looks bleak, yet the government is keen to quash dissent. Speaking during the latest blackouts, Cuba’s current president, Miguel Díaz-Canel, said: “We will not accept or allow anyone to act by provoking acts of vandalism, and much less disturbing the civil tranquillity of our people … And that is a principle of our revolution.”
Díaz-Canel was reelected by lawmakers in April 2023 for a second and final term. But the weak state of Cuba’s economy will pose significant challenges for his government, testing its strength and the legitimacy of its hold on power.
Cuba’s relations with the US are also likely to remain strained. In an attempt to curb Cuba’s outreach to Russia and China for predominantly economic assistance, the US president, Joe Biden, has loosened some sanctions. But this could all change with a Republican victory in the upcoming US election.
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Publish date : 2024-10-23 04:33:00
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