Cuba, a Caribbean island nation known for its rich cultural heritage and revolutionary history, is currently facing a serious economic crisis. Despite its once-strong position in the world with a powerful socialist regime, Cuba has been grappling with a range of challenges that have led to a more oppressive way of life for its citizens.
The current economic crisis has been caused by a variety of factors, including the lack of fuel and the economic collapse. This has resulted in a scarcity of basic necessities, such as food, medicine, and electricity. The Cuban people have been forced to live in difficult conditions, with many struggling to make ends meet.
Unfortunately, the Cuban government has not been able to provide a clear plan with specific measures to recover from this situation. Despite efforts to open up the economy and attract foreign investment, the government’s efforts have not been sufficient to address the underlying issues and bring about lasting change.
As a result, the situation in Cuba remains uncertain, with many citizens struggling to survive in a difficult and challenging environment.
Fuel prices to increase from 25 to 132 pesos
The government of the country has recently made a decision to raise the fuel price by a staggering five times. This means that the cost of a litre of gasoline is expected to rise from 25 pesos to 132 pesos starting from February. This drastic move is yet another indication of the failures and shortcomings of socialist states.
It can be argued that the lack of alternative economic strategies has played a significant role in the current situation. While other countries have diversified their economies and introduced new paths for growth, this particular country seems to have failed to do so. As a result, it is now facing the consequences of its limited approach towards economic development.
However, it is also important to note that there are various political and social factors that have contributed to the collapse of socialist states. For example, corruption, poor governance, and lack of accountability have all been identified as key issues that have undermined the stability and sustainability of such states.
Despite the fact that the world is progressing and moving forward, incidents such as these continue to occur. It is crucial for policymakers and leaders to learn from these experiences and take steps towards building more resilient, inclusive, and sustainable economies and societies.
Electricity and gas prices are on the rise
The government of Cuba has long subsidised many goods to support its economy. However, the country’s economy has deteriorated so significantly that the subsidy program can no longer be sustained. As a result, the government has announced a plan to increase the price of fuel to address the budget gap.
The Minister of Finance, Vladimir Regueiro, has emphasised that a special program is being implemented to ease the burden of the fuel price hike on the public. The program will aim to alleviate the distressing conditions caused by the increase in the cost of diesel and other types of fuel.
In addition to the fuel price hike, the government has also decided to increase the price of electricity by 25% and revise the charges for natural gas. This move is part of a broader effort to stabilise the country’s economy and address the budget deficit.
To purchase fuel on the international market, the government plans to implement a special program to collect foreign currency. As part of this program, a new payment method accepting only US dollars has been introduced. Furthermore, 29 new gas stations will be opened to facilitate the purchase of fuel with foreign currency.
The Minister of Finance hopes that this program will increase the state reserves and contribute to the overall stabilisation of the economy.
Causes of economic crisis
The Cuban economy has been severely affected by the Corona epidemic and the process of imposing sanctions by the United States. The financial generation process, including the industries that existed nationally, has collapsed in a big way due to these conditions. The Corona epidemic has caused a significant decline in the country’s economic activities, including tourism, agriculture, and manufacturing. The tourism industry, which was a major source of foreign exchange for the country, has suffered a severe blow due to the pandemic. The manufacturing sector has also been affected as many factories had to shut down due to the pandemic, leading to job losses and a decline in production.
In addition to the impact of the Corona epidemic, the United States has taken steps to tighten sanctions against Cuba in recent years. Other Western countries have also been contributing to the American process, causing further damage to the Cuban economy. The impact of these sanctions on the Cuban economy has been significant, with restrictions on trade, financial transactions, and travel affecting the country’s ability to generate revenue and attract investment.
The Cuban Communist regime has been unable to sell fuel at subsidised or fair prices due to the economic situation. The country’s Finance Minister, Alejandro Gil, announced last month that certain measures will have to be followed due to the weakening of the economic situation. Cuban fuel is of the highest quality in the world, and the price of fuel is very cheap. However, economic analysts point out that although fuel prices in Cuba are low on a global scale, they are high in comparison with the daily or monthly incomes of the Cuban people. This has made fuel unaffordable for many Cubans, leading to a decline in economic activities that depend on fuel.
Instead of reducing the price of fuel, the Cuban government should focus on a program that can increase the income of the people. Amongst the entire population of Cuba, the number of people who own vehicles is the least. Economic analysts point out that the prospect of owning a car may be just a dream of the people in the country due to the increase in fuel prices. Therefore, the government should focus on increasing the income of the people, creating more job opportunities, and boosting economic activities that will help improve the living standards of the people.
Will socialism collapse and create a humanitarian crisis?
Cuba has been facing a critical fuel shortage for several years now, which has resulted in a series of significant problems for its people. One of the most pressing issues is the food insecurity that has arisen as a direct result of the fuel shortage. The shortage has made it challenging to transport food and other essential goods across the country, leading to rising inflation and frequent power outages. These problems have become a regular occurrence for Cubans, affecting their daily lives and livelihoods.
Analysts have pointed out that there is no proper system in place to measure the extent of the oppressive situation created by the fuel shortage. The shortage of medicines and consumer goods has also become a severe problem, with vulnerable groups such as children and mothers facing malnutrition. The impact of these shortages is widespread and has a profound impact on the quality of life of Cubans.
As a result of the economic turmoil caused by the fuel shortage, the Cuban government had to cancel its traditional May Day parade in 2023. Now, in 2024, the question is what measures the government will take to manage this crisis. There are concerns about how effective these measures will be and whether Cuba will receive support from friendly countries like Russia. If the situation continues to deteriorate, there is a risk of a humanitarian crisis developing in the country.
It is clear that the survival of Cuba and its socialist system will depend on how effectively the government handles the crisis. The government will need to address the root cause of the problems and put in place measures to mitigate their impact on the population. The situation is complex and requires a coordinated effort from the government and international community to ensure that Cuba can overcome this crisis and emerge stronger.
