Cuba's Economic Challenges: Declining Sugar Production and Foreign Relations

Cuba is currently grappling with its worst financial crisis in history, largely attributed to the actions of President Miguel Diaz-Canel and the military conglomerate GAESA. According to a report from the think tank Cuba Siglo 21, GAESA controls over 70 percent of the Cuban economy and 95 percent of national finances, effectively making the civilian government a puppet.

The report highlights a staggering inflation rate, with the Cuban peso recently trading at 472 to one dollar in the informal market, showcasing the dire state of the economy. This inflation crisis is exacerbated by a severe shortage of foreign currency, driven by declining remittances and a drop in international tourism, alongside a collapse in domestic production, including in the agricultural sector.

The report pinpoints that the Cuban government has failed to implement a coherent economic reform plan, leading to a financial meltdown characterized by soaring prices for essential goods and services.

The economic policies initiated under Diaz-Canel, particularly the 'Tarea de Ordenamiento' or Ordering Task, have been criticized for mismanagement, with significant salary increases leading to further inflation without corresponding productivity gains.

As a result, many Cubans are now living on just one meal a day as salaries have become inadequate to meet basic needs. Additionally, the report indicates that GAESA's lack of accountability has led to a systematic siphoning of funds, including those generated from medical services abroad, which should have bolstered the public health system.

Instead, the financial resources have largely benefited the military conglomerate, leaving public health severely underfunded. The report underscores that the real roots of the crisis lie within the Cuban governance model itself, rather than solely external factors like U.S. sanctions.

The source notes that Cuba's sugar industry, once a cornerstone of its economy, has also suffered significant declines, further impacting agricultural production. The findings suggest that without drastic political and economic reforms, including restoring democratic governance and enabling a genuine private sector, Cuba's economic turmoil is likely to persist, leaving millions in poverty.

In summary, the situation in Cuba reflects a complex interplay of internal mismanagement and external pressures, leading to a precarious economic reality for its citizens.