The economic situation in Cuba is extreme. Some compare this to the grim “special period” of the 1990s, when aid from the Soviet Union collapsed in 1991 and the United States had the opportunity to further tighten the embargo on the small Caribbean island. Food was scarce and people left the country as best they could. In imitations of improvised boats, there was a crunch of beams trying to cross the small piece of sea that separated them from North America. The situation is similar now, even worse. hit Came with the pandemic in 2020and added to the tightening of sanctions and a series of disastrous economic decisions by his government.
The result was a complete crisis and emigration. Only Last year, 270,000 Cubans went to the United States. It is the highest figure in its entire history. There is a shortage of food, medicine, fuel, and inflation is rampant: 40% increase in prices in 2022. And in this formal economy; The situation in the wreck is even worse: According to the worst estimates, inflation is around 500%.
The Government of Havana is asking for help. He sent trade delegations to different countries, including Spain, and accepted anyone who could offer him some kind of agreement or assistance. That same Thursday, the head of European diplomacy, Josep Borrell, Beginning a three-day visit to Cubathat it will seek to consolidate European influence on the island.
The geopolitical scenario of the world is changing very rapidly, and Brussels has offered to approach Latin America in earnest this time. Not many allies. In particular, they cannot allow China, but also Russia, to cooperate in a key region in terms of raw materials.
Russia has also stepped in in this context. In 2022, commercial exchange between Cuba and Russia reached $420 million. The figure is three times the previous year. On May 17, representatives of fifty Russian companies went to the island in search of business opportunities within the framework of their “strategic partnership”. Cuban President Miguel Díaz-Canel visited his Russian counterpart, Vladimir Putin, at the end of last November, following the start of the invasion of Ukraine. He was looking for a partner to alleviate the resounding economic crisis in the country.
five days ago Russian state-owned company Aeroflot has announced that it will resume trips to Cuba. next July 1 Currently by direct flight from Moscow to Varadero (13 hours). Considering that half the world’s airspace is closed to flights from Russia, Cuba could be a real goldmine for Russian tourism.
“There is a historical relationship with Russia and Moscow has given Havana political support in the face of sanctions and has helped the regime overcome the crisis. Fiscal restrictions imposed by the United Stateshe explains to this newspaper Anna AyusoSenior Researcher for Latin America CIDOB. “It also provides you with some fat. But Russia is not Cuba’s major financier. The impact is currently greater than in China, Brazil and of course Venezuela.
Cuba is playing a double game with Russia. Like other non-aligned countries like Iran, it abstained from the resolution condemning the attack on Ukraine in the United Nations Assembly. He did not actively support the Russian invasion. It needs the EU, especially Spain, but it cannot refuse anything.
Recognition of the economic crisis in Cuba
Cuban President Miguel Díaz-Canel this Wednesday dire situation on the island. EFE reported that the economic scenario is “extraordinarily complex”, creating “dissatisfaction” in the population. The head of the Communist Party of Cuba, the only party allowed to enter the island, said in front of representatives of his own formation that “a number of situations have become more complex in recent months, such as electricity generation problems and fuel shortages,” as reported by the official press.
Cuba has been going through a triple crisis for three years. On the one hand, the epidemic has hit a depleted healthcare system hard. Tourists stopped coming to the island. The global crisis slowed investments. The materials are not coming. The second crisis is the usual crisis, the challenges posed by the systematically sustained and sometimes escalating embargo packages from Washington. The third happened by itself: partial dollarization of the economy and the depreciation of the Cuban peso.
“Before the 2020 currency reform, there were two currencies in Cuba: the local one – the Cuban peso – and the convertible peso with dollar parity used by tourists and specialty shops selling imported goods,” Ayuso explains. He also participates in the EU-Cuba forum. “It has always been said that this situation is unsustainable. The Cuban peso would not work. People tried to buy convertibles or the dollar directly as much as they could. The government decided to leave only the Cuban peso. however, for this he had to raise the domestic price and associate it with the dollar. They had to raise wages and there was massive inflation”.
Media supporters of the regime argue that the island’s critical situation is the fault of 64 years of US sanctions. from what they said economic, trade and financial war. They want Cuba removed from the list of Countries Supporting Terrorism because “it prevents foreign investment, bank transactions or the purchase of products necessary for the country’s development, puts pressure on tour operators and of course increases public discontent. Arthur González at Heraldo Cubano, food, medicine , because of the ongoing pressure due to oil problems, transportation problems,” he writes.
The government also tried to somehow liberalize the island’s economy. This Small and medium-sized private companies in Cuba are legal. for a year and a half. But the backdrop for this historic experiment could not have been worse, as a reminder of China’s first steps towards current state capitalism before abandoning communism.
“There are more than 7,000 SMEs relieving the Cuban economy and foreign investment of more than 300 businesses,” he said in Madrid on Monday. Antonio Luis CarricateThe head of the Cuban Chamber of Commerce at a business forum organized by the Cuban embassy in Madrid. “There are 708 job opportunities, mainly divided into 197 food projects; 130 for tourism; 128 for renewable energy; and 116″ for oil.
In this context, EU High Representative Josep Borrell begins his three-day visit to Cuba this Thursday. There is a lot of economic content on its agenda, but it is also political. He will meet with Cuban Foreign Minister Bruno Rodríguez. will join the third EU-Cuban joint council, A body that meets periodically to comply with the Agreement on Political Dialogue and Cooperation (ADPC). The point of discussion will undoubtedly be the human rights situation. The 2021 anti-government protests were brutally suppressed. Thousands of people were arrested. So far, 700 have been sentenced to prison sentences of up to 30 years in some cases, EFE reported. Several NGOs, including Amnesty International and Human Rights Watch, urged Borrell to press for his release. The regime press denies these allegations and assures that these “Yankee” organizations want the person in charge of European diplomacy to blackmail the Cuban government to derail the revolution.