The economic situation in Cuba is dire. Some compare it to the bleak years of the so-called special period in the 1990s, when the Soviet Union collapsed in 1991 and the United States tightened the embargo. Food grew scarce, and people sought ways to leave by any means. The country faced shortages as barely functional boats and improvised craft tried to cross the strait to North America. The current strain mirrors that era and, in many ways, surpasses it, compounded by the pandemic beginning in 2020 and a sequence of painful economic decisions by the government.
The result has been a full-blown crisis and a wave of emigration. Last year, about 270,000 Cubans left for the United States, the highest annual figure in the nation’s history. Food, medicine, and fuel remained scarce, and inflation surged—prices rose by about 40 percent in 2022. In the formal economy, the distress is even sharper; some estimates place inflation near 500 percent.
The government in Havana has called for international support. Trade missions were sent to various countries, including Spain, and officials were ready to entertain any viable agreement or assistance. On a separate note, European chief diplomat Josep Borrell began a three-day visit to Cuba to explore ways for Europe to increase its influence on the island.
The global political landscape is shifting rapidly, and Brussels signals a more earnest approach to Latin America. The aim is to cultivate allies while avoiding too close ties with rivals. Europe cannot permit China or Russia to dominate the region’s essentials, notably its raw materials.
Russia has stepped in within this context. In 2022, Cuba and Russia exchanged about 420 million dollars in trade, a figure three times higher than the previous year. In May, fifty Russian companies visited the island to explore opportunities within a declared strategic partnership. Cuban President Miguel Díaz-Canel met with Vladimir Putin in late November, after Russia’s invasion of Ukraine, seeking a partner to help ease Cuba’s severe economic strain.
Recent news indicates that a large Russian state-owned airline, Aeroflot, announced plans to resume flights to Cuba by July, with a direct Moscow to Varadero route taking around 13 hours. Given the broader restrictions on Russian airspace, Cuba could become an especially attractive arena for Russian tourism.
Experts note that Cuba has a longstanding relationship with Russia, and Moscow has offered political support despite sanctions, helping Havana navigate the crisis. Yet Russia is not Cuba’s largest financier. The immediate impact of this partnership is more pronounced with Russia than with other countries such as China, Brazil, and Venezuela.
Cuba is pursuing a dual track in its foreign policy. Like other non-aligned states, it abstained from voting on the United Nations resolution condemning the Ukraine invasion, but it still seeks EU engagement, especially with Spain. At the same time, it cannot disregard any potential cooperation with external partners.
Recognition of the economic crisis in Cuba
President Miguel Díaz-Canel acknowledged the island’s precarious situation in a recent briefing. The government described the economy as extraordinarily complex and noted growing public dissatisfaction. The head of the Communist Party, the only legal political force on the island, told party members that electricity generation and fuel supply have become more problematic in recent months, according to state media.
Cuba has faced a triple crisis for several years. The health system was strained by the epidemic even as tourism fell away and global crises slowed investment. A long-standing embargo continues to weigh on the economy, while a partial dollarization and the depreciation of the local peso added another layer of difficulty.
Before the 2020 currency reform, Cuba operated with a dual currency system: the Cuban peso and a convertible peso used by tourists and in certain stores. Experts say this setup was unsustainable and led to inflation when the government moved to a single peso linked to the dollar. Wages rose to compensate, but the result was higher prices for everyday goods and services.
State-aligned media argue that much of the crisis stems from decades of U.S. sanctions, calling for removal from certain international lists to restore foreign investment and smoother banking transactions. They also argue that sanctions drive up costs for food, medicine, and fuel while complicating travel and tourism operations.
The government has made efforts to liberalize parts of the economy. Small and medium enterprises have been legalized for about a year and a half, though the broader environment remains challenging. Some observers compare Cuba’s move toward private enterprise with early experiments in other economies that later evolved into broader market reforms.
In recent days, the Madrid Chamber of Commerce and local partners hosted a productive forum on the opportunities of the Cuban market, attracting broad participation. Local officials highlighted active private sector involvement, noting thousands of small and medium enterprises and hundreds of foreign investment projects have emerged in various sectors, including food, tourism, renewable energy, and oil.
Within this frame, EU High Representative Josep Borrell began a three-day visit to Cuba. The agenda prioritizes economic issues but also raises political topics. He planned to meet with Cuban Foreign Minister Bruno Rodríguez and join the third EU-Cuban joint council under the Agreement on Political Dialogue and Cooperation. The topic of human rights figures prominently, especially following the 2021 protests, which authorities say were firmly suppressed. International watchdogs have urged attention to the detentions and the treatment of detainees, while Cuban officials insist that external actors are seeking to influence internal policy for their own ends.