Cuba lives in a “war economy.” The island’s own authorities said so a week ago. That is to say, the food shortages that the population has been dealing with for years, the salaries that are not enough, the skyrocketing prices, that desolate panorama, that territory of disaster resembles that of a country turned to the battlefield. The recognition aroused mixed reactions. Some considered the announcement “effective,” others responded skeptically and a few have done nothing but mock. The popular actor Ulises Toirac, one of the great faces of humor on national television, said on his networks that he was tired of the heat and the lack of bread, but not now, but for a long time. Then he made the most serious joke he has ever said: “I am in a war economy. For years.”
Despite its significance, the government’s statement, made at a recent meeting of the Council of Ministers where new measures were announced to “reboost the economy during 2024,” did not provoke a particular climate of fear or uncertainty. Cubans have been suffering for years from a crisis that began in the 1990s with the loss of economic aid from the former Soviet Union and from which they have never been able to recover. People have perceived that the permanent scarcity in which they live now has a new, more dire name.
Nothing really changes after being told that they are still in a “war economy,” because they have long understood what this implies. “I have heard comments about the war economy, but it doesn’t mean anything to me because we are always in a bad way,” says Yosvani Castañeda, from Havana. “Food and everything else is very expensive. Prices are sky-high, especially the most necessary things, food, medicine. You need a truckload of money to survive. We have to wait and see if it is true that they will cap prices, but what I believe is that this will never change.”
The term “war economy” is now a mystery to many: why is the Cuban government using today, and not before, a concept that is typical of countries in a war situation, that have taken measures to reorganize their industry, save supplies or control their economic policies in hostile contexts?
Ricardo Torres, a former researcher at the Center for Studies of the Cuban Economy and a professor at the American University in Washington, believes that the term “is intended to be installed in public opinion to justify the inevitable adjustments that the government has to introduce,” since “some of the measures related to the budget are unpopular, because they imply spending cuts and more tax collection.” The economist also believes that with this expression the authorities refer both to the economic crisis and to the international “siege” that they are suffering. “It is known that there is a combination of domestic and external factors that affect the Cuban economy. But there is no war. There is a model that does not work, that has decades-old flaws, and an economic crisis that has not been well managed by the government.”
However, this is not the first time that the Cuban government has described the turbulence as a “war economy.” At the end of 2023, President Miguel Díaz-Canel publicly announced the “beginning of a new trend in the behavior” of the Cuban economy. “We have called it a war economy, because it must operate in a scenario of maximum suffocation policy, designed and applied to a small country by the most powerful empire in history.” With this he was referring to the economic embargo that the United States maintains towards Cuba, and which has served as a pretext to justify the constant crises that have ended up plunging the country into misery.
Other specialists, such as Omar Everleny Pérez Villanueva, former director of the Center for Studies of the Cuban Economy at the University of Havana, consider it “risky” to use a term like “war economy,” which could “further encourage Cuban emigration, which has broken all possible records of departures from the country since 1959 to the present.” Also, according to him, it could send “a discouraging message to potential foreign investors in the Cuban economy who could have brought fresh capital so necessary for development.” The economist believes that, by appealing to this term, the Government “wants to say” that extraordinary measures could be taken in the economic area, which would not be done under other conditions. “From once again stopping private companies that function as retail suppliers to the population, such as not granting new licenses, or putting price caps.”
The private sector, a target of the new measures
If the new cuts have aroused any resentment, it has been among the people who make up the private sector on the island. At the meeting, Mildrey Granadillo de la Torre, First Deputy Minister of Economy and Planning, announced that these measures include budget cuts, “price controls” in both the state and non-state sectors, the establishment of a single price policy and the centralization and control of some economic decisions. It is not yet known when they will begin to be implemented, but some analysts already understand that the measures could directly affect the so-called Mipymes, small and medium-sized companies that were approved in 2021, when the Government found no other option than to open the private sector, in the midst of a crisis that has worsened since 2019, the blows to the economy due to the Covid-19 pandemic and the intensification of economic sanctions against the island by the Administration of former US President Donald Trump.
According to Pérez Villanueva, some of these measures “are very risky, as they will tend to reduce the supply of goods, in a situation of great scarcity, and where there is a huge deterioration in the purchasing power of salaries and pensions.” The Government will cap the maximum prices of products such as chicken, oil, sausage, powdered milk, pasta and detergent, which are often inaccessible to people who only live on state salaries. The measure, which provides relief to customers, could affect private businesses.
“Administrative price controls on some products sold by SMEs are completely nonsensical,” Torres believes. “The results are known: increased shortages, smuggling, informal markets, and so on. In a way, it is an acknowledgement of the failure to control inflation. Restrictions continue to be imposed on the private sector, when they should be doing the opposite. The best cure to stabilise the economy is to make it grow, and we do not see a coherent plan in that regard.”
The economist also agrees with a general feeling: the measures seek greater state control over the country’s economy. “I think that this has always been a government objective,” he says. “The government is afraid of a large and autonomous private sector, but at the same time it cannot do without it without sinking the economy even further. They want to achieve a balance that is impossible to maintain a model that has failed.”
For some time now, economists have been saying that the crisis the country has been immersed in since 2019 far exceeds what was experienced during the so-called Special Period, the harsh crisis that began as a result of the collapse of the Soviet Union. At the beginning of this year, it was learned that for the first time Cuba had asked the United Nations World Food Program for “urgent” help to send milk for children under seven years of age. In 2023, the country closed with 30% inflation at the end of the year, an economy contracted to 2% and a depreciation of the Cuban currency of more than 50% against the dollar and the euro in the informal market. Cubans, in the midst of desperation, have twice taken to the streets shouting “hunger” and “food.” The outlook is bleak.
“I think this crisis is worse for many reasons,” says Torres, comparing it to the one experienced in the 1990s. “Cuba entered the Special Period after a decade of relative prosperity, robust social services and reduced inequality. This crisis comes after almost three decades of stagnation and growing inequality. Many families never recovered the living standards of the 1980s. There is a decline in the quality of social services. This crisis disproportionately affects a part of the population that was already at a disadvantage. Emigration has been much higher, and the population is aging rapidly. All of this bodes ill for the future,” he insists.
Although the government has recently taken a number of measures, such as the dismissal of the Minister of the Economy or the implementation of another plan that involved an increase in the price of transport, electricity rates and even liquefied gas, the truth is that no conclusive solution has been proposed to alleviate the crisis on the island. The authorities continue to look the other way and centralize all economic power.

“I believe that the only measure that can get the country out of the situation of chronic shortages is to remove the knots that still hinder manufacturing or agricultural production,” says Everleny, who insists that, apart from these measures, all the others “are temporary and instead of moving forward, they go backwards.” “For example, price caps have proven to be unviable in the economic circumstances in Cuba. The government has to be competitive with the private sector, but not from positions of power or control from above, but by offering products at a better price.”
Torres, in turn, thinks that this, as in previous announcements, lacks the most important thing: a coherent plan that includes structural measures. “The commitment to a failed economic model remains, while the focus on applying patches continues. The priority at this time must be a radical reform of state companies, restructuring those that are not viable and imposing the discipline that only the market can achieve,” he maintains.
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