The Cuban economic model, unproductive and poorly diversified, is no longer sustainable and the country is sinking into an economic, social and energy crisis unprecedented since the crisis following the fall of the USSR in 1991. The succession of linked shocks to the collapse of Venezuela in 2019, Cuba’s key energy partner, to the Covid-19 pandemic in 2020 (collapse of tourism, exports of medical services and diaspora remittances) and to the war in Ukraine in 2022 (increase in the cost of imported raw materials) has exacerbated the country’s internal and external vulnerabilities. The financing of the current deficit remains under pressure, while the country faces a drying up of its main foreign currency inflows. The spectacular erosion of real wages for a large majority of the population, caused in particular by the loss of value of the Cuban peso which fuels a sustained rate of inflation on basic necessities, contributes to its impoverishment. In the absence of monitoring and statistical coverage by the International Monetary Fund (IMF), Economic Intelligence Unit (EIU) has revised its economic growth figures for 2023, estimating a 1.9% contraction in real GDP (versus a projected in September 2023 at +2%).
**Mr. Rodriguez, given the complex interplay of internal and external factors influencing Cuba’s economic crisis, what are the most significant challenges and opportunities for international organizations and foreign governments seeking to provide assistance without exacerbating existing vulnerabilities?**
## Cuba in Crisis: A Conversation
**Welcome to World Today News. Today we’re discussing the dire economic situation evolving in Cuba.**
Joining us are two distinguished experts: **Dr. Ana Luisa Mendez**, Professor of Economics at the University of Havana, and **Mr. Carlos Rodriguez**, Senior Analyst at the Latin American Economic Research Center. Thank you both for being here.
**Part 1: The Crisis Unfolds**
* **Dr. Mendez**, the article points to the Cuban economic model as inherently unsustainable. Can you elaborate on the specific weaknesses of this model that have contributed to the current crisis?
* **Mr. Rodriguez**, the article highlights the confluence of external shocks – the Venezuelan collapse, the COVID-19 pandemic, and the war in Ukraine. How significant is the role of these external factors in exacerbating Cuba’s pre-existing vulnerabilities?
* **Dr. Mendez**, what are the main consequences of these factors for the average Cuban citizen? How are they experiencing this economic downturn?
**Part 2: Financial Fragility**
* **Mr. Rodriguez**, the article mentions a “drying up of main foreign currency inflows.” Can you shed light on the specific sectors impacting this decline, and what options Cuba has for reversing this trend?
* **Dr. Mendez**, Cuba has relied heavily on remittances from its diaspora. How sustainable is this source of funding long-term, and are there any potential risks associated with it?
* **Mr. Rodriguez**, what steps, if any, is the Cuban government taking to address the financing deficit and stabilize the economy?
**Part 3: Outlook and Potential Solutions**
* **Dr. Mendez**, the Economic Intelligence Unit has revised Cuba’s economic growth projections downwards. What are your own projections for the Cuban economy in the near future, and what factors will be crucial in determining its trajectory?
* **Mr. Rodriguez**, the article mentions the “erosion of real wages” and “sustained rate of inflation.” What measures could be implemented to alleviate the cost-of-living crisis facing Cuban citizens? Could increased FDI play a role?
* **Dr. Mendez**, looking beyond the immediate crisis, what long-term structural reforms could Cuba consider to move towards a more sustainable and resilient economic model?
**Conclusion**
Thank you both for sharing your insights. This has been a truly enlightening discussion on a critical issue facing
Cuba today. We encourage viewers to stay informed and engage in constructive dialog on this complex topic.
**Please note:** This is a framework for a potential interview. The actual conversation would be shaped by the guests’ responses and further exploration of the raised topics.