Cuba’s private-sector experiment is faltering
Cuba’s economy is in its worst state since the collapse of the Soviet Union in the 1990s. Even the official figures—which one Western businessman in Havana, the capital, describes as “an exercise in a cover-up"—make grim reading. Annual inflation, according to the government, is at 30%.
The fiscal deficit is forecast to be at least 18% of GDP in 2024. In 2023 the economy contracted by around 2%, according to Alejandro Gil, the economy minister. Unable to take part in a democratic election, many Cubans are voting with their feet.
Migration from the island is at its highest level since the revolution in 1959, reports the Washington Office on Latin America, an advocacy group. During the fiscal years of 2022 and 2023 some 425,000 Cuban migrants went to the United States and 36,000 submitted asylum applications in Mexico. That is more than 4% of the population.
Many have left for other destinations, including Russia, where detailed migration figures are not published. At the start of the school term in September, Cuban schools were missing 17,000 teachers, according to the ministry of education. Some of Cuba’s problems have been exacerbated by recent events.
During Donald Trump’s tenure as president of the United States, sanctions on the island were tightened. Cuba was also added to a list of state sponsors of terrorism. Meanwhile tourism, which accounted for 11% of GDP in 2019, has not recovered from the pandemic.
In 2023 the number of visitors was barely 2m, though the government had hoped for 3.5m. Last year Venezuela reduced its shipments of crude oil to the island, as it was struggling to process enough for its own needs. That caused Cuba’s government to impose rationing and warn of blackouts.
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