What The Hell Is Going On In Cuba?

Have you seen any economic news coming out of Cuba recently? With barely a couple of exceptions, if you read the U.S. Corporate Media, likely you have not. Searching for the most recent articles on Cuba’s economy from mainstream sources just now, I find nothing in the Washington Post about Cuba’s economy since May 2022; nothing from the New York Times since a piece in April rehashing the usual litany of Cuba’s long-known economic failures; silence at CBS since a piece in April quoting a Cuban official as “blam[ing] the U.S. for exodus of migrants, economic issues”; nothing from CNN since a March article discussing “power cuts and food shortages.” And so forth. OK, Cuba’s economy has performed poorly for decades, ever since Castro’s revolution 65 years ago. We already knew that. But are there any important new developments we should know about?

There are no meaningful official economic data coming out of the Cuban government itself. But we might try the World Bank data site as the next best option. There we will find data that is neither unusual nor alarming — although it is undoubtedly completely false. Per capita GDP is given as $9,499.60 as of 2020, with no explanation of why there has been no update in the last four years. The $9500 figure is not all that different from, for example, the World Bank’s 2023 estimate for China of $12,614. Also at the World Bank’s data site, we find that Cuba’s GDP grew (supposedly) by 1.8% in 2022; that its unemployment rate is a remarkably low 1.2% as of 2023; that its population experienced a small decline from about 11.4 million in 2018 to 11.2 million in 2023; and that it had net out-migration of about 6,000 people in 2023.

I last wrote about the economic situation in Cuba about a month ago. The news I could find then already made the World Bank “data” appear ridiculous. Since then, more facts have dribbled out to make Cuba look like a full-on disaster.

If you are inclined to believe that the World Bank might know what it is talking about, you might try this very brief (barely over 300 words) piece from Reuters on September 30. Suddenly, the headline and lede sentence describe Cuba’s economy as “devastated” and “bankrupt.” Excerpt:

Cuba is suffering an unprecedented economic crisis. In the last month, the government has said more than one million people - around 10% of its population - are without running water. The majority of the population endures several hours of blackouts each day. Food, fuel and medicine shortages are nearly universal. . . . More than one million Cubans have left the Caribbean island since 2020, a record-breaking exodus that has contributed to a crisis at the U.S. border.

Unprecedented economic crisis? More than 1 million Cubans have left since 2020? How did the World Bank miss that? Actually, the real numbers on emigration may be far worse than even Reuters reports. Mary Anastasia O’Grady had a piece in the Wall Street Journal a few days ago on October 6. Here’s an excerpt on the overall economic situation on the island:

Cuba is in a full-fledged meltdown, starting with its public infrastructure. Millions are without running water. Food rations are shrinking. Electricity blackout and brownouts are routine. The tourism industry, which was never robust, hasn’t recovered since the Covid-19 pandemic despite the construction of luxury hotels.

And as to the out-migration:

Cuban emigration in recent years has been huge. . . . In July Cuban demographer and economist Juan Carlos Albizu-Campos released data showing that Cuba’s population shrank by 18% between 2022 and 2023. He calculates that some 8.62 million remain on the island.

A loss of 18% of the population of a country over just two years is truly extraordinary. That would mean that the World Bank’s figure of net out-migration of 6000 in 2023 is off by a factor of between 100 and 200. I have never heard of such an extraordinary rate of out-migration for any other country ever. How is this not a gigantic news story? The link in O’Grady’s piece goes to this long July 23 article from the English language page of the Spanish newspaper El Pais, which goes into detail on Albizu-Campos’s work and methodology. Some excerpts:

Although it’s clear that emigration in Cuba has taken off since 2021, official reports and government data describe a current population of just over 11 million who still live in the country. But that number is a figure from the past. Cuban economist and demographer Juan Carlos Albizu-Campos has announced that between 2022 and 2023, the island’s population fell by 18%, meaning that in reality, there are 8.62 million Cubans living there today. . . . Emigration now seems to be the only source of hope to many Cubans, who are selling everything, right down to their houses, to be able to pay for a one-way ticket. Their decisions have added up to a migratory wave that, between 2022 and 2023 alone, according to Albizu-Campos, accounted for the departure of 1.79 million people from the country. . . . So alarming is the situation that a few months ago, a Havana authority publicly recognized that the country is experiencing its largest exodus of all time.

Even more incredible, according to O’Grady, is that the exodus now includes high-ranking members of the ruling Cuban regime, although not those at the very top.

Eight days ago Juan Carlos Santana Novoa was a high-ranking official in the Cuban military dictatorship. . . . On Sept. 30 Mr. Santana Novoa presented himself to immigration authorities at the Nogales, Ariz., border using the CBP One app, which expedites entry for migrants making asylum claims. . . . The Foundation for Human Rights in Cuba says it has identified more than 100 Cubans living in the U.S. who committed human-rights crimes while working for the regime. Mr. Pentón has written about a few in Marti Noticias.

O’Grady rightly interposes a caveat that in at least some cases the entry of 100+ Castro regime thugs into the U.S. might be for nefarious purposes. But a better guess in most instances is her second hypothesis: that this “may signal a loss in faith that the police state is sustainable.”

As just one indicator, demographer Albizu-Campos deduces from his data that 77% of the people who have recently left are between 15 and 59 years old. Doing a little simple arithmetic (my specialty), that would imply that over the course of just a couple of years Cuba has lost close to a third of its working-age population. Meanwhile those left behind are overweighted in the categories of elderly and children who do not contribute to the economy.

So what exactly is suddenly going wrong in Cuba? While Cuba’s economy craters, the world economy has its problems, but is basically chugging along. In the CBS video from April of Cuba’s Deputy Foreign Minister, he blames Cuba’s economic crisis and population exodus on what he calls the U.S. “economic blockade.” That’s rather lame. I thought that Cuba’s communist/socialist economic system was supposed to be superior to the U.S. system. For example, how exactly does the U.S. embargo explain millions of people without running water? Don’t they have plumbers there? More generally, why don’t they just produce for themselves whatever the U.S. won’t sell them? Perhaps capitalism has a few secrets of economic success that they haven’t figured out. Also, the U.S. embargo has been in place all the way back to the 1960s, so how does it explain the crisis now?

I don’t want to hazard a guess as to when the Cuban regime will finally collapse and give up power. After all, one would think that the North Korean disaster could not possibly have gone on as long as it has, but there it is.

An ex-colleague of mine is an immigrant from Cuba, and still has some relatives there. I asked her for any insights she could give me. She had no hard economic data to share. But she did say that her relatives there substantially depend on remittances from U.S. family members to survive. Also, her information is that the regime has greatly reduced its resistance to granting exit visas, with the result that everyone who can get out is leaving.

From the regime’s point of view, I suppose that allowing everyone who wants to to leave helps to minimize domestic opposition, and thus probably prolongs the regime’s survival, at least for a while. But if the productive citizens all leave, at some point there will be no economy left. On current trends, this can’t go on much longer.

With this going on just 90 miles from the U.S. shore, it is crazy how little about it is part of common public consciousness here. The Corporate Media deserve a large share of the blame.