EuropenSeptember 27 Hurricane Ian knocked out Cuba’s power grid. The power outage meant food, which was scarce anyway on the island, was rotting in the heat. But the cover of darkness also offers Cubans an opportunity to protest. In several neighborhoods in the capital, Havana, people banged pots and pans, calling for the lights to be turned on and on. freeor free.
Even before the hurricane hit, Cubans had a lot to protest about. The island is going through its worst economic crisis since the collapse of the Soviet Union in the 1990s. The current problems began with Venezuela’s economic collapse in 2014, which reduced the amount of cash and cheap oil it was sending to the island. Donald Trump’s tightening of the U.S. embargo has limited how much Cuban-Americans can send their relatives, and how often. Covid-19 further cut off the island’s tourism revenue, and few returned. “The economy is in a very deep hole,” said Ricardo Torres, an economist at American University in Washington.
The government is not helping to solve the problem. In early 2021, it unifies the currency. This involved devaluing the Cuban peso from parity with the dollar to the black market rate of 24 pesos to the dollar. One unfortunate consequence was inflation soaring to 152% last year, according to our sister organisation, the Economist Intelligence Unit. The exchange rate on the street is $200 to the dollar and going up.
The salaries of state workers have increased fivefold. But that hardly buys a meal. Marín is an elementary school teacher earning 4,200 pesos a month. At the official exchange rate, that’s $175. Actually it was $21. He drives a taxi to make more money. Likewise, Sandra and Ioanca Borges in the kitchen of their outhouse describe bartering with their neighbors for milk, sugar, and eggs to make Cuban sweets “Dulces Doña Manuela” for their business. The cost of sugar has increased tenfold in the past year.
Over the past decade, the government has quietly lifted some of the harsh restrictions on private enterprise. Last year, private companies with fewer than 100 employees were legalized and foreigners were allowed to invest.Previously only freelancers, or cuenta propistas, is permitted to operate a small private business. Cubans can now import goods for sale, not just for their own use. The list of items that can be brought into the country by plane has been expanded to include cheese and condensed milk.
The Cubans jumped at these opportunities. Over 5,000 small businesses were established within a year of legalization. Today, private enterprises outnumber state-owned enterprises. But they’re much smaller, and a whole bunch of regulations keep them that way. The economy is still dominated by large, inefficient state-owned enterprises with privileged access to credit and dollars. All of this has left Cuba poorer than it should be.
This puts the government in a dilemma. “They don’t want to open up to the point where the private sector has real power,” said Marta Deus, founder of a food delivery company. But the state cannot cope. Mr Torres believes its traditional sources of income will be difficult to recover. Exports of tobacco, sugar and fish fell. (The hurricane destroyed the tobacco crop.) The government had no money to buy seed, fertilizer, or animal feed. And since it monopolizes the import and distribution of the stuff, no one else can buy it either. In May, President Joe Biden lifted Trump’s cap on remittances to Cuba. But Cubans abroad are reluctant to send money home, at least through official channels that are run by the military, who scam customers by exchanging dollars for pesos at ridiculous official exchange rates.
At the same time, power outages caused by hurricanes are not one-time. The government failed to overhaul its aging grid. Cuba currently relies on five Turkish generators on ships floating off its coast. The island’s total supply is only two-thirds of the 3,000 MW demand. Power outages regularly hit Havana and the countryside.Residents exclaim when power goes out Vamos unite! (Let’s unite!), which is a dig at the government’s explanation that cuts to the capital are meant to show sympathy for rural people.
The Communist Party’s economic model isn’t the only thing that looks outdated. Few Cubans believe in the official ideology of socialism. Fidel’s younger brother, Raúl Castro, who took over in 2008, is less charismatic but more reform-minded than his brother. The current president and first secretary of the Communist Party, Miguel Diaz-Canel, has neither Castro’s name nor his charisma. Carlos Alzugaray, a former Cuban diplomat, said that even if he wanted to reform, he faced huge obstacles from the party and civil servants.
In July 2021, tens of thousands of Cubans took to the streets to protest shortages, embargoes and one-party rule. Hundreds were arrested; many were sentenced to 30 years in prison. Small scale protests continued across the island, including in rural areas.
Others are voting with oars. In August, residents of the coastal village of El Cepem protested police attempts to prevent them from migrating on makeshift rafts. Nearly 195,000 Cubans have been apprehended trying to cross the border between Mexico and the U.S. since October 2021, about four times as many as in the previous two years combined and far more than other exoduses in 1980 and 1994 number of people. Teacher Marin, I will go to Spain soon. “There’s no future here,” he said. ■