Amidst a deepening financial crisis in Cuba, Miguel Díaz-Canel has emphasized that increasing foreign currency earnings should be the country's top economic priority. During a session of the Council of Ministers at the Palace of the Revolution on Monday, before his departure to Russia, he made this point clear.
"Our focus must be on securing more foreign currency income. In my view, we need to approach this in two ways: one by increasing earnings through non-traditional means, and the other by utilizing our income more efficiently," Díaz-Canel stated. He encouraged looking into new income streams, such as exporting IT products, and enhancing national manufacturing not only for export but also to supply the domestic market.
He called for a shift in perspective, urging Cuban state companies to consider the "domestic market as a development source." Furthermore, he reiterated the importance of attracting foreign investment, regulating the exchange market, and advancing the banking process to better manage the island's limited resources.
Economic Challenges: Tourism Decline and Unmet Export Goals
Díaz-Canel's remarks highlight the severe liquidity crisis the nation is experiencing. Cuba is grappling with a continuous decline in foreign currency revenue, which hampers its ability to import essential goods like food, medicine, and fuel. Joaquín Alonso Vásquez, the Minister of Economy, disclosed that goods exports failed to meet the planned targets, despite a slight improvement from the previous month.
The tourism sector presents an even grimmer picture, with a 22% drop in service exports compared to the same period in 2024. The sugar harvest remains in critical condition, and while some agricultural production targets have been met, these achievements have not translated into actual food availability, exacerbating shortages in Cuban markets.
Desperate Measures: Increased Dollarization and Internet Costs
In December, the Cuban government sanctioned a partial "dollarization" of the economy. Manuel Marrero Cruz, the Prime Minister, announced this during the fourth ordinary session of the National Assembly. This move signaled the growing sway of the U.S. dollar and euro in the country, as the regime attempts to restructure key economic sectors while struggling to control the impact of the informal exchange market.
Before the close of 2024, ETECSA, the Cuban Telecommunications Company, declared a hike in internet rates for 2025 and unveiled new packages and services priced in foreign currency, aiming to collect more hard currency.
The most significant blow came in January 2025, with the opening of a new supermarket at 3rd and 70th in Havana, replacing the former establishment that operated under the Convertible Peso (MLC) system, now depleted. Since then, foreign currency stores have proliferated across Cuba, well-stocked with domestic and international goods, accepting cash dollars or cards linked to foreign currency accounts, thereby excluding most Cubans from accessing these essential products.
FAQs on Cuba's Economic Strategies
What are the two main strategies Díaz-Canel suggests for increasing foreign currency income?
Díaz-Canel suggests increasing foreign currency income by exploring non-traditional revenue streams and using current income more efficiently.
How is the tourism sector impacting Cuba's economy?
The tourism sector is severely affecting Cuba's economy, with a 22% drop in service exports compared to the previous year, contributing to the country's liquidity crisis.
Why has Cuba decided to partially dollarize its economy?
Cuba has opted for partial dollarization to harness the influence of the U.S. dollar and euro, aiming to stabilize key economic sectors amidst the challenges of controlling the informal exchange market.