The lighting went out in Cuba once more.
For the 5th time in a yr, all of Cuba plunged into darkness on Sept. 10, 2025. Even vital emergency products and services like hospitals suffered throughout the just about 24-hour energy outage.
That’s as a result of Cuba’s energy grid is outdated and tough to handle, and the rustic can not have enough money to import the entire oil it must stay the lighting on.
As a pupil of Cuban society and politics, I consider that the continuing blackouts level to greater financial issues dealing with the rustic. Whilst a lot of this is because of the ongoing results of the U.S. embargo, which since 1960 has obstructed American business and tourism with the Caribbean island, Cuba’s leaders additionally deserve a percentage of the blame for his or her financial mismanagement.
Certainly, whilst different nominally communist international locations, similar to Vietnam and China, have facilitated the improvement of a personal sphere of their economies previously a number of a long time, officers in Havana have in observe limited such expansion in order to not threaten state enterprises.
The end result has been a much less colourful, much less productive community of personal enterprises not able to give you the financial expansion that Cuba so desperately wishes. All of the whilst, Cuba’s communist authorities faces an existential risk because it struggles to handle energy within the face of well-liked discontent.
The exterior components of the disaster
Since 2020, Cuba’s gross home product has gotten smaller by means of nearly 11%, with economists forecasting an additional decline of one%-2% in 2025.
There are a variety of causes for this decline.
Tourism, Cuba’s lifeblood, has no longer rebounded for the reason that COVID-19 pandemic. In the meantime, Venezuela, which sponsored Cuba for a decade within the 2000s, specifically with oil exports, not has the capability to take action. Additional, chronic power shortages in Cuba have resulted in steep declines in agricultural and commercial manufacturing.
Cubans wait to fill their water boxes from a water truck in Havana on Sept. 29, 2025.
Yamil Lage/AFP by means of Getty Photographs
From a broader standpoint, the U.S. embargo additionally continues to hurt the Cuban financial system. For greater than 60 years, Cubans were not able to promote their merchandise to the USA – and American citizens were not able to trip to or do trade with Cuba out of doors of very restricted classes.
Estimates range as to what extent the embargo damages the Cuban financial system, however it kind of feels positive that the “blockade,” as Cubans name it, deprives the country of no less than masses of thousands and thousands, if no longer billions, of U.S. bucks in business once a year, maximum specifically in agriculture and tourism.
Steps towards home reform
Whilst exterior components have taken a toll, the chronic financial difficulties dealing with Cubans also are self-inflicted by means of the federal government.
Cuba’s leaders have pursued a gradual, slim and on occasion arbitrary trail towards financial privatization – particularly when contrasted with different formally communist international locations in Asia.
Below Raul, the state allowed Cubans to possess, purchase and promote their properties; they may additionally create their very own companies, or even make use of others to whom they weren’t comparable – practices prohibited beneath Fidel Castro.
The federal government additionally allowed extra foreigners to spend money on Cuba, mainly in vacationer infrastructure, supplied they confined themselves to minority stakes.
Cubans have been additionally accepted for the primary time in a long time to possess their very own land, develop meals and promote it at markets, environment their very own costs inside limits. Collective farms, the bane of Soviet agriculture that had as soon as impressed Fidel’s progressive visions, have been not the norm.
By means of 2017, about 13% of the personnel held licenses to start out companies, whilst the personal sector hired about one-third of all employees.
Within the years right away following those reforms, Cuba posted some good points in commercial and meals manufacturing and GDP. Certainly, throughout the mid-2000s, Cuba posted spectacular expansion charges, on occasion in far more than 10%.
Home growth stalled
Sadly for Cubans, the upward pattern didn’t proceed.
And that’s in no small measure because of Cuba’s prosperity within the 2000s being constructed on Venezuelan subsidies, no longer by means of Cuban marketers.
Venezuela’s overdue president, and longtime Castro admirer, Hugo Chavez, started to subsidize Fidel Castro’s authorities in a while after taking energy in 1999.
A petrostate, Venezuela supplied much-needed oil to Cuba on favorable phrases, whilst additionally paying the Cuban country for docs to paintings in Venezuela’s hospitals and clinics, offering Cuba with the onerous forex it had to pay for imports.
Researchers estimate that the Venezuelan authorities sponsored the Cuban financial system by means of up to US$9 billion in step with yr till 2016.
Venezuelan oil allowed Cuba to paper over a starker fact: In spite of reforms, Cuba’s marketers remained hamstrung by means of a bulky and incessantly corrupt state coverage.
Due to ever-changing laws, nearly all of personal companies have remained small and devoted to private products and services, similar to eating places, hairdressing, seamstressing and upkeep.
On a bigger scale, Cuba’s state bureaucrats see pageant with government-owned companies, particularly in tourism, as a risk to their energy and privileges. Taxes additionally stay inequitably prime for personal corporations.
In the meantime, the bigger personal companies that at the moment are sometimes accepted are nearly at all times, in line with various my Cuban-based assets, related to buddies or members of the family of the political elite, no longer moderate Cubans.
There were successes, to make certain. The personal sector now accounts for extra retail gross sales by means of quantity than state enterprises.
However the proportion of the personnel hired by means of the personal sector stays about what it was once in 2019, whilst personal endeavor accounts for handiest about 15% of Cuba’s GDP.
The unsustainable provide
Confronting more than one crises, Cuba’s leaders proceed responsible the U.S. embargo and coverage from Washington that has change into handiest extra bellicose beneath President Donald Trump. Undoubtedly drawing optimism from having weathered serious crises ahead of, the Cuban authorities turns out dedicated to a state of defiance.
However the proof this time round suggests Havana’s leaders will have to be much less sanguine.
In spite of expanding prices, Cubans experience in style get right of entry to to [the internet] they usually know simply how unhealthy and the way inequitable issues are.
For the entire authorities’s rhetoric and dedication to a decades-old revolution, Cubans see a much-vaunted clinical machine this is failing, not able to supply medication, procedures — and even electrical energy. They know that crime is on the upward push, whilst inflation reduces the worth of the Cuban peso relative to the greenback each week
Cubans play dominoes in the street throughout a blackout in Havana on Sept. 10, 2025.
Yamil Lage/AFP by means of Getty Photographs
Cubans see and listen to in their well-connected countrymen, with hyperlinks to state enterprises, flaunting their wealth. Cubans might also know that their army holds up to US$18 billion in another country — about 16% of Cuba’s GDP in 2024.
What they surely know and revel in is the truth of being compelled to reside with out energy, without a risk of development in sight.
Restricted possible choices going ahead
Traditionally, Cuba has been pulled from crises by means of international buyers keen to subsidize its revolution.
However Russia’s strategic place, China’s international priorities and Venezuela’s hardships all make that not likely presently. And with the U.S. now pursuing a coverage of extreme power towards noncompliant governments in Latin The united states, Havana can relaxation confident that it is going to see little respiring room from its robust neighbor and long-time antagonist.
That leaves the Cuban authorities with only some choices.
It will select to proceed seeking to limit its voters’ get right of entry to to the web. Sadly for the state, the web is the lifeblood of the personal sector.
Cuba’s leaders may additionally select to depend at the loyalty of its safety forces and their skill to intimidate and abuse their fellow Cubans. That has labored previously, however given Havana’s scarce assets and its restricted capability to praise its henchmen, it’s not transparent that the federal government can have enough money to undertake this method indefinitely.
After all, Cuba’s leaders may take steps towards additional reform the personal sector and do away with the waste and corruption that experience more and more outlined the Cuban state.
Any such path will require the federal government to allow all Cubans, no longer only a well-connected few, to compete with state enterprises. It will additionally imply making an allowance for a better stage of international funding, which has remained stunted because of authorities coverage.
If the previous gives any information, on the other hand, Havana will as an alternative proceed to depend on its bold safety equipment to repress is voters, whilst privatizing in tactics that don’t threaten the ability and privileges of the elite.
