The economy of Cuba is dominated by state backed and run organizations in all sectors, segments and industries. The communists party of Cuba is the present ruling government and they set prices for most of the commodities in the country.
Before the pandemic struck the world, Cuba’s economy for the most part relied on its tourism sector along with exports of commodities like rum, sugar, minerals, and tobacco. The nation also happens to be very import dependent for the basic necessities such as food, milk, medicines, daily consumables etc.
The pandemic forced Cuba to shut its doors and restrict entry for at least eight months. This meant that food could not be imported, all the income that came into the nation through tourism and foreign remittance from Cubans living abroad stopped as well. Lockdowns ensured people couldn’t leave their homes therefore they couldn’t get out to work and earn a wage.
Tourism contributed at least 50% to the government’s foreign exchange reserves before the pandemic with shut-downs and movement restrictions imposed to curb the spread of infection the tourism sector collapsed and then the sanctions imposed by the US government under the former president hit the nation’s imports and exports which had led to widespread shortages and a situation of near bankruptcy.
Chaos erupted, prices skyrocketed, Cubans ended up waiting for nearly eight hours in que and lines just to buy food and other basic essentials. Electricity outages ended up becoming more frequent and rapid than ever. The infections spread was running rampant which ended up straining the nation’s health care system.
SEQUENCE OF EVENTS WHICH WORSENED THE SITUATION
To aid economic recovery the communist government brought in monetary reforms in the beginning of this year to its policies which further worsened the situation as it led to high levels of inflation.
All measures had led to a boost in sales through foreign currencies, majorly the dollar, these grave times and situations forced the hands of many Cubans to acquire foreign currencies through black markets where the rate has surged by three-fold compared to the official rate since the Cuban government sharply devalued their own Cuban peso.
Presently many commodities are no longer sold in Cuban peso even though there are billions of pesos in circulation. The outcome of unofficially adapting to using dollar as a medium of exchange, scarcity of basic essentials, necessities and sharpe devaluation of peso have skyrocketed the rates and prices forcing inflation that has most likely come in at a rate ranging between 500% to 900%.
“The government used to sell LED light tubes for 30 pesos. On the informal market they now cost 400 to 500 pesos and there are none in the government stores, not even for convertible currency,” state bank employee Ana Rebeca Labrada said.
The communist government also announced that they have no money in the bank left to exchange or even import commodities to consume and resell in pesos which cannot be exchanged outside the nation to buy more.
The Cuban economy has reportedly declined by at least 11% during the pandemic year a lot owing to years of stagnation as a result of a the communist regime measures, lockdowns and sanctions. The situation is only getting more grave and worse as the economic crises is come in well into this year.
Since July residents in Cuba have been coming out in large numbers to protest against the government, they demand the end of this communist regime and better measures and care for the country and its people.
In retaliation the Cuban President Miguel Díaz-Canel has ordered the nation’s security forces to disperse and dispel these protestors and activists. Many activists have reportedly been beaten up, stalked home and detained as well.
Over 500 protestors have been arrested for criticisms towards the government and its handling of the crises, many now are facing speedy trials and convictions in pro government courts and judicial systems that are happening behind closed doors with no lawyers representing the people.
Cuba’s president has even gone to the extent of clamping down the citizen’s voice through internet shut downs.
Reports have even suggested that the government has forced people to participate in rallies that are in support of their regime.