The collapse of the Cuban economy

A view of a neglected neighbourhood outside Havana’s old city (2023)

The Stalinist regime in Cuba is facing a crisis of exceptional severity. The long-term decline in the living standards of the working class and other layers of the working population has now reached a truly alarming point. At the same time, the socio-economic inequalities created by the government’s market-oriented measures are expanding at a rapid pace. The bureaucratic privileges -so characteristic of all Stalinist regimes- have become increasingly intertwined with, and further exacerbated by, the growing market inequalities in contemporary Cuba.

The data presented in the 22-28 November issue of The Economist, in the article entitled Cuba is heading for disaster, unless its regime changes drastically, lay bare the situation in the country with stark clarity. As one of the leading mouthpieces of international finance capital, the magazine’s proposed solutions naturally reflect the perspective of global capital; yet it is difficult to detect any distortion in the figures it provides. On the contrary, the picture is so bleak that no embellishment is needed: the numbers speak for themselves.

Millions on the brink of hunger

In Cuba, employees of state institutions receive an average wage of 6,506 pesos -equivalent to roughly 14 US dollars at the free-market exchange rate. Doctors, teachers, museum workers -all try to live, indeed to survive in the most literal sense, on such an income.

The essential question, of course, is how much purchasing power 6,506 pesos actually has. The answer is: extremely little. For example, a carton of eggs costs 2,800 pesos.

In other words, for a Cuban in the lowest wage bracket, a month’s labour amounts to no more than thirty eggs.

The article in The Economist also notes that the United Nations World Food Programme (WFP) is now attempting to protect Cuban children from hunger. The WFP is typically an organisation that intervenes in disaster zones in Africa. Today, however, the same organisation is distributing food to children in the neighbourhoods of Havana.

Some 89 per cent of Cubans live in “extreme poverty”; 70 per cent skip at least one meal a day; and 12 per cent of those over the age of seventy continue working because their pensions do not even reach ten US dollars.

An economy in darkness

In recent months, prolonged power cuts have left the entire country in darkness for days at a time. Since then, matters in this sphere have returned to “normal”: electricity is now cut for “only” four hours a day, as was previously the case. Yet some regions still do not receive a regular supply.

Cubans were forced to endure power cuts lasting several days in 2024 due to failures in the electricity grid.

Water does not flow in most areas either.

The state-run transport system has collapsed entirely. Petrol stations stand empty; taxi drivers wait in queues for a week to obtain 40 litres of fuel, the price of which is 46 US dollars -several times higher than the average monthly wage paid by the state.

Labour productivity hits rock bottom

As the economy collapses, growth in labour productivity has also sunk to rock bottom. In a recent regional comparison by the United Nations, Cuba ranked last among 28 countries in Latin America and the Caribbean -falling even behind Haiti, which is widely regarded as a failed state.

In an environment where productivity is not rising, the Cuban bureaucracy has turned to cutting social assistance and implementing austerity measures. Yet without any improvement in productivity, such measures do not resolve the existing problems; rather, they accelerate and deepen the crisis.

Based on CEPAL [*] data, this chart shows labour productivity (GDP produced per hour worked) in Latin American and Caribbean countries in 2024. The dashed line represents the regional average. (Source: The Economist)

Mass migration

Over the past five years, roughly a quarter of the country’s population appears to have left Cuba. Since 2020 alone, 2.75 million people have departed; last year’s figure was 788,000. Migration on this scale is not merely a symptom of economic collapse but also a stark indication of deep social despair.

Doctors are leaving, teachers are leaving; even dancers from the Cuban National Ballet -who earn comparatively higher wages- are leaving the country.

As the country loses its skilled workforce, productivity takes further blows and the process of economic collapse accelerates. The Stalinist bureaucracy is incapable not only of repairing this cycle but even of halting or slowing it. The regime has no capacity to generate solutions from within.

Once one of the giants of global sugar exports, Cuba produced 8 million tonnes in 1989; today it produces only 150,000 tonnes. The country now imports sugar.

Tourism, meanwhile, has failed to recover since the Covid-19 pandemic. Empty hotels, deserted beaches, a collapsed air transport system -Cuba’s economy has lost its two principal sources of revenue simultaneously.

The Stalinist bureaucracy argues that the principal cause of the current collapse -though they, of course, do not call it a “collapse”- is the decades-long embargo imposed by the United States. The embargo enforced by American imperialism is indeed brutal and places a heavy burden on the Cuban economy. Yet it is simply impossible to explain today’s economic breakdown solely through the embargo. The central dynamic of the crisis lies in the complete blockage of the Stalinist bureaucratic regime and the economic model on which it rests. Production, circulation, and the entire social structure are undergoing a profound process of decay and disintegration.

The “exit” strategies proposed by The Economist for Cuba -a new Gorbachev, direct intervention by the United States, further empowerment of the private sector, and so on- are wholly at odds with the historical interests of both the Cuban working class and the international working class.

Facing the facts

Yet, as Stalinist organisations in Turkey and across the world have done, ignoring Cuba’s collapse in order to avoid demoralising cadres or provoking internal debate -turning away from reality, or continuing to spin baseless fairy tales about the situation in Cuba- serves no purpose whatsoever. We must, at all times and under all circumstances, tell the truth to ourselves and to the working class.

No matter how difficult the present circumstances may be, it is essential to resist the forces pushing for capitalist restoration in Cuba. Such resistance can only be achieved by confronting the Stalinist bureaucracy with the aim of overthrowing it, while raising the demand for workers’ control and workers’ democracy across all spheres.

The type of state required by a regime that has abolished capitalism must be modelled on the example of the Paris Commune: officials who are elected and subject to recall at any time; all administrators receiving no more than the average wage of a worker; and workers holding decision-making authority in the management of all public affairs.

In short, defending the Cuban Revolution, and waging an effective struggle against both imperialist aggression and attempts at capitalist restoration, depends on raising the demand for workers’ democracy and carrying out a determined fight along that path.

[*] The Spanish abbreviation for the United Nations Economic Commission for Latin America and the Caribbean (Comisión Económica para América Latina y el Caribe).