Why is the Cuban Economy Failing?
Cuba's facing the worst economic crisis in decades. Here's why.
While we are peacefully carrying on with our everyday lives, there is one country that is starving to death every day. People are out on the streets, violence is at its peak. The second most populous country in the Caribbean, Cuba, is facing the worst economic crisis of all time.
Public protests, fight against a 63-year-old dictatorship, food shortages and economic paralysis - it’s all unraveling in Cuba! But, why? And, why now?
Read on.
The United States, Cuba and The Soviet Union
Cuba is an island country near the state of Florida. Although close in distance to the United States, it has had a rocky relationship with the country ever since 1959.
A man named Fidel Castro established a dictatorship in Cuba in 1959 and pledged allegiance to the Soviet Union. Now obviously, this did not go down well with the United States (remember the cold war between the two superpowers: the US and the Soviet Union?). So the United States imposed a trade ban and tried toppling the Cuban dictatorship by force. But, to no avail.
In fact, Cuba went ahead and allowed the Soviet Union to build a nuclear missile base on the island. Now thankfully, this situation did not escalate further, as the United States negotiated with the Soviets. But its relations with Cuba had further soured.
The real shocker came with the breakup of the Soviet Union. Now, Cuba did not have a big brother to protect it from the United States.
However, things gradually improved. And during the Obama administration, there was a short-lived hope for better situations as diplomatic relations were restored with Havana - The Delhi of Cuba.
But, Trump being Trump, was not ready to let go. He established stringent economic measures and tightened embargoes (a ban on trade or commercial activity). Embargoes have resulted in a massive loss of $130 Billion to Cuba over the course of six decades.
Well, Trump wasn’t reelected again, right? Then why is Cuba still suffering?
The crisis unfolds
Biden, while contesting for elections, made promises to reverse the sanctions made by Trump. Ah! A sigh of relief? Or was it just vote bank politics?
Later, he mentioned that thawing relations is not a priority and he won’t be reviewing a policy decision for a country designated as a state sponsor of terrorism.
While the situation was bad, it worsened with lockdowns and extensive border controls. The worst-hit were the countries that depended on tourism. The Island economy of Cuba was hit with hours-long electricity shortages. People stood in queues to buy necessary food items. Cuba received just 88,000 visitors this year which is merely 9% of the good times.
The entire conflict is also hampering the inflow of foreign currency, the access to USD to make all the global transactions. How? Because tourism and remittances make up 40% of the USD that enters the economy.
Add to this, the surge in global food prices: 40% between January and May 2021. How were people going to survive like this?
There were several attempts made by the government to boost tourism which led to a spike in coronavirus cases and deaths.
Cubans started losing patience. Enough was enough. Anger and unrest amidst the economic desperation made them give up on Cuba’s communist regime.
However, Cuba was able to de-escalate the protests on 11th July. But grievances are far from over. With Coronavirus cases steepening upwards, the tourism industry dipping down, and the unavailability of USD to rely upon, what does the future hold for Cuba?
Q for the D: Know of any other country that is going through a crisis just like Cuba is?
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Myanmar also is having political issues and military took control.
Lebanon to declare themselves as bankrupt soon.