Cuban Economists Outline Paths to Navigate Economic Crisis

Cuba is grappling with one of the most severe economic downturns in its recent history. However, eight independent economists consulted by EFE suggest that the Cuban government can still take significant steps to improve the situation, even within the constraints they face. As the United Nations General Assembly prepares to discuss Cuba's resolution calling for the end of the U.S. embargo, experts caution that a narrow focus on U.S. sanctions diverts attention from urgent internal reforms, many of which are within the Cuban government's reach.

A Complex Crisis Beyond Just Economics

The ongoing economic downturn, now in its fifth consecutive year, is compounded by crises in multiple sectors such as energy, food, health, production, agriculture, banking, finance, and currency. "The embargo affects us, but it's not under the government's control. What they can control is ending hyper-centralized planning, granting more autonomy to existing property forms, reducing bureaucracy, and embracing the market," says Omar Everleny, a professor at the University of Havana.

Systemic Issues Not Merely Structural

According to Tamarys Bahamonde, a professor at the City University of New York, the crisis cannot be attributed to a single factor. "It's systemic, with all problems interconnected like a web. You can't address one without touching all the others," Bahamonde explains. Experts reiterate that while sanctions do have an impact, the primary hurdle is the existing economic model and the government's resistance to substantial change. "Even amid sanctions, much can be done," assures Ricardo Torres, a researcher at American University in Washington. He recommends fostering investment, protecting private property, establishing a stable legal framework, encouraging competition, and seeking financing from international organizations. However, he warns, "The current model needs dismantling, but that's what they resist."

Political Change: The Necessary First Step

Some economists stress that political reform should precede economic change. Mauricio de Miranda, a professor at Pontificia Universidad Javeriana in Cali, Colombia, suggests starting with the "democratization" of the system and involving Cubans abroad as sources of ideas, human capital, and financial resources. Economically, he advocates for "liberating productive forces" by ending centralized administration, dissolving the military-controlled GAESA business conglomerate, and lifting restrictions in the agricultural and external sectors. Legally, he calls for "equality for all economic actors and predictability."

Constitutional Roadblocks to Progress

Economist Pedro Monreal highlights constitutional barriers, suggesting the removal of the "planned direction of the economy" from the 2019 Constitution as a central component of the economic system. Monreal argues that "Cuba is in a type of crisis from which it cannot recover within the current system's frameworks," emphasizing the need for substantial reforms. Yet, he remains skeptical: "The Cuban government doesn't seem willing to make such radical changes."

Internal Barriers to Competition

Cuban-American economist Carlos Martínez signals internal obstacles hindering key sectors. He proposes liberalizing the agricultural sector, where most land is state-owned, and opening the economy to "competition" in state monopoly-dominated areas like telecommunications and energy. "Havana can stop obstructing the dynamization of certain fields," he asserts.

Credibility: A Barrier to Investment

Pavel Vidal, also a professor at Pontificia Universidad Javeriana in Cali, argues that the government needs to take concrete steps to demonstrate its reformist intentions. "It needs to make at least some moves to convince that it will apply a profound reform of the current economic model, which lacks credibility." He notes that even Cuba's traditional allies, such as Russia and China, are hesitant to invest due to this credibility gap. "Historically, Cuba has sought international allies, but this strategy is failing due to a severe credibility issue," he states. "Even among historical allies, Russians and Chinese understand the Cuban economic model's problems and the need for reform."

An Integrated Transition: The Only Viable Solution

Economist Miguel Alejandro Hayes, coordinator of the Caribbean Basin Research Institute, goes further, asserting that partial reforms are insufficient. With the lowest per capita income in Latin America, a "paralyzed business system," and infrastructure needs estimated at $60 billion, he believes the country is in a state of "collapse" rather than crisis. "The only economic solution for the Cuban government to reverse the current collapse—a more fitting term than crisis—is to create an economic and political transition that allows for the design and implementation of a plan to rebuild Cuba," he states. These eight independent economists agree on a clear diagnosis: Cuba's crisis is systemic and demands profound transformations. While external sanctions continue to impact, the scope for internal action is broad and vital. From structural reforms to political transitions, the responsibility to act now lies with the Cuban government.