An Economic Crisis From a Geopolitical Perspective

The current political situation in Cuba

Cuba continues to defy the odds since the fall of the USSR and remains a one-party state, with the Communist Party of Cuba being the sole legal party. It was also one of the least democratic countries in North America in 2023 according to Our World in Data and the Economist Intelligence Unit. Since 2018, the country is led by Miguel Diaz Canel whose appointment marked the end of the rule of the Castro family that had lasted for nearly 60 years. The new prime minister has offered more of the same, as the party retains a strong grip on the island’s politics and maintains a repressive media culture. 

The regime’s recent economic woes

Since the introduction of a trade embargo by the United States in 1962, the Cuban economy has always relied heavily on foreign assistance to survive. During the Cold War, the USSR provided support when it came to oil supplies, for example. After 1991, Cuba managed to endure a huge crisis due to the collapse of the USSR owing to a stable infrastructure developed in the 1980s and by developing deep ties with the emerging Bolivarian Republic of Venezuela. Owing to its vast oil production capacities, Cuba could count on assistance from its South American ally. 

Since the COVID-19 pandemic, Cuba has plunged into a deep economic crisis. According to official figures, the inflation rate is in double-digits but according to economists, these figures may actually be significantly higher. The collapse of the Venezuelan economy and the COVID-19 pandemic, crowned by the hawkish stance of the Trump administration towards the country, provided the perfect storm for the worsening of the crisis. The country still couldn’t bounce back from the pandemic despite monetary reforms and continues to face food shortages and power cuts. With no easing in sight, the regime had to ask for UN aid to combat food shortages.

Cuba’s place on the international stage in the light of the current crisis 

Due to its vulnerabilities, Cuba’s isolation on the international scene may seem inevitable. However, the island’s geographical position, notably its proximity to the US, is a valuable asset. Rivals of the US, notably China and Russia, often see the Cuban regime as an opportunity to assert power on the doorstep of the US in order to counterbalance its influence in Eastern Europe or in the Pacific. 

Cuba has redeveloped its former ties with Russia and continues to support Russia’s war in Ukraine. Russia provides crude oil, cereals and there is an increasing presence of Russian firms on the island. Cuba in exchange provides raw materials such as nickel and cobalt to Russia. This time it is not ideology that drives the relationship between the two countries, Russia sees Cuba as a consumer market for Russian goods and weaponry. Recently, numerous Russian firms have been behind investment projects on the islands, for instance in the pharmaceutical and biotechnological industries. 

Conclusion

All in all, the Cuban regime holds a firm grip on its population but lacks economic sovereignty and relies on foreign actors to maintain power. Due to its valuable position in the Caribbean, the island may find itself engulfed in a battle for power between bigger countries.