Cuba’s Strategy to Revitalize Devastated Economy Making Progress, but at a Slow Pace, Government Reports

HAVANA (Reuters) – Cuba’s leadership has acknowledged that progress in its plan to revive the island’s struggling economy is taking place, but is not progressing quickly enough, as reported by state media. Many Cubans are currently enduring significant hardships, with millions lacking access to water and electricity.

The country is in the midst of an unprecedented economic crisis, with the government revealing that over one million people—approximately 10% of the population—are without running water. Additionally, the majority of citizens face frequent power outages lasting several hours each day. Shortages of food, fuel, and medicine are nearly universal.

Cuban economy minister Joaquin Alonso conveyed during a recent meeting of the Council of Ministers, the country’s highest executive body, that while the government’s strategy to address economic distortions is moving forward, the pace is slower than desired. The communist party newspaper Granma covered the meeting.

Since July, the government has introduced various measures aimed at alleviating the economic burden on citizens and fostering a recovery. These include price caps on essential items, budget reductions to manage a growing fiscal deficit, and adjustments to regulations governing private businesses to enhance tax revenue.

Senior officials mentioned that austerity measures have resulted in a lower-than-expected deficit growth for 2024. However, Prime Minister Manuel Marrero pointed out that, despite some “discrete advances,” the average Cuban is still suffering. “They have not yet reached the family economy, but they are beginning to organize some elements,” Marrero stated.

The Cuban government attributes its struggles to the longstanding U.S. trade embargo from the Cold War era and the impacts of the COVID-19 pandemic, which have severely affected tourism and local industries, depleting cash reserves needed for importing fundamental goods.

Moreover, officials have conceded that internal bureaucratic inefficiencies and the challenges inherent in its state-driven economic model are also significant factors contributing to the ongoing crisis.

Since 2020, over one million Cubans have departed the island, marking a record exodus that has also intensified issues at the U.S. border.