Cuba has a rich and proud history, shaped by prominent figures like Fidel Castro and Che Guevara. The country has long been recognised for its socialist framework and was on the path to becoming a world power. Many states have studied and modelled themselves after Cuba.
However, Cuba is currently facing a difficult situation due to a severe economic collapse. As a result, the Minister of Finance, Vladimir Regueiro, has proposed a significant increase in fuel prices, which will rise by five times.
In addition, he has announced a 25% increase in electricity bills effective from March 1. These announcements were made through government media.
Five times increased fuel
The Finance Minister has announced that the recent increase in fuel prices in Cuba is part of a strategy to address the budget deficit. Although Cuba has traditionally had low fuel prices compared to the rest of the world, the extent of the economic crisis has made it necessary to raise prices significantly.
As a result, the price of a litre of regular gasoline, previously sold at 25 pesos, has been increased to 132 pesos. Similarly, the price of high-quality gasoline, sold at 30 pesos per litre, has been raised to 156 pesos. However, the government has decided not to increase fuel prices for public transportation.
Additionally, foreign tourists have been advised to make all payments in foreign currency, per a special instruction sheet issued by the Cuban government.
Economy Shrinks – Subsidies to People
The Cuban economy contracted by 2%, and inflation rose to 30% by the end of 2023. As a result, there was a shortage of fuel, food, and other essential items throughout the country, and the government had to provide subsidies to a large number of people.
This has created a severe shortage of food, causing problems in young children’s nutrition. Food prices have become unsustainable, and it is painful to think about how people will live on their monthly salary.
The confusion caused by the COVID-19 epidemic has had a direct impact on other countries as well as on Cuba. The most significant issue affecting Cuba’s economy is the American embargo. Due to this embargo, both the production and export economies have collapsed.
Attention has also been paid to the economy’s structural weaknesses. Matters like not changing specific policies according to the times have played a significant role in this crisis. However, economic analysts believe this is the worst financial crisis Cuba has experienced since the revolution.
A pay cut – a black market mafia
The economic crisis has led to severe conditions in the country, with wage cuts being one of the main issues. Due to non-payment of overtime and a lack of opportunities for additional earnings, people have lost opportunities to earn money.
This has created a problematic situation, especially in the face of rising inflation. Cuban economic analysts have noted that constant power cuts have also caused confusion in people’s lives, leading to the collapse of small-scale industries in particular.
In addition, a black market mafia has emerged, selling goods that are not available in the market at higher prices.
People are leaving the country
Many intellectuals and young people are leaving Cuba, causing the nation’s economy to decline. This makes it challenging to keep skilled workers from going to work in other countries, further harming the Cuban manufacturing industry.
The country’s intellectuals believe the government’s economic management process is weak. They also point out that this weak economic management is not new and that Cuba must face the consequences of not adapting to global changes and neglecting economic reforms for many years.
The American embargo, which has been in effect against Cuba since 1962, is a significant factor in this economic crisis. These sanctions have further weakened exports, even though Cuban products are high quality. Despite the quality, Cuba has been unable to distribute its products worldwide and turn production into an economic advantage.
Freedom for money
Due to the ongoing economic crisis in Cuba, people from various professions, such as engineers, doctors, and workers, are forced to go abroad in search of work. This has resulted in a situation where people in the country must engage in multiple professions to make ends meet.
They spend their free time working odd jobs such as selling bread, eggs, sweets, repairing cars, and cleaning. As a result, they have very little time to spend with their families, especially their children. Although this situation may seem like a way to create an open market in a socialist state, it is evident that Cuba is going through some difficult times.
