Cuba is grappling with severe shortages of basic necessities, including teachers, food, and reliable electricity, as children return to school. Uniforms were available for only 12% of primary pupils, and fuel scarcity has led some families to resort to horse-drawn carts. The government attributes the crisis to the U.S. embargo, a stance echoed by some activist groups.
However, a recent analysis argues that the root cause of Cuba's economic collapse lies within its own socialist system, predating intensified U.S. pressure. According to the analysis, Cuba's economy minister acknowledged a more than 10% decline in output since 2019, with significant drops in agriculture, livestock, mining, and manufacturing, even before recent energy embargoes.
The system's inherent flaws, the report suggests, include nationalized farms, price controls, state-controlled imports, and restrictions on private enterprise, all contributing to low productivity and chronic shortages. Investment priorities also highlight potential systemic issues, with nearly 40% of state investment in the first half of 2024 directed towards tourism-linked construction and business services, far exceeding spending on health, education, and agriculture combined.
Historically, Cuba's economy has relied on external subsidies. The Soviet Union provided significant economic support through above-market prices for sugar and discounted oil, averaging nearly 23% of Cuba's GDP from 1985 to 1988. When this support vanished in the early 1990s, the Cuban economy contracted by approximately 40%. Later, Venezuela provided substantial aid, including oil shipments and payments for Cuban personnel, which reached almost 19% of Cuba's GDP in 2009. As Venezuela's economy declined, its oil shipments to Cuba dwindled, leaving Havana's energy crisis as a consequence of decades of subsidized dependence.
The analysis contends that the U.S. embargo is not an insurmountable barrier, noting that U.S. regulations permit trade in food, medicine, and medical devices. In 2025, American companies reportedly exported approximately $810 million in goods to Cuba, with another $525 million in the first half of 2026. Cuba also trades with numerous other countries, including Spain, China, and Canada. The core problem, according to the report, is not the impossibility of commerce, but Cuba's limited production capacity to afford necessary imports, exacerbated by a damaged creditworthiness due to past defaults.
The report suggests that lifting all sanctions would not resolve the fundamental issue of a command economy's inability to produce essential goods. A potential solution proposed is a shift away from socialism, pointing to the partial legalization of private businesses in 2021, which captured 55% of retail sales by 2024. However, the government maintains state control over key sectors like the internet, media, and major industries, prioritizing political power over economic liberalization.
The analysis concludes that Cuba's crisis is not merely a series of technical errors but a deliberate mechanism by the Communist Party to maintain political control. While humanitarian relief is needed, a foreign bailout would only delay future collapses. The durable solution, it argues, lies in ending the current political system and allowing Cubans to own property, set prices, attract investment, and build independent businesses under the rule of law. The current shortages and hardships in Cuba are presented as evidence against, rather than for, the viability of socialism.