Cuba is particularly vulnerable to this kind of catastrophe. As a Caribbean country, it’s exposed to high temperatures and extreme climatic events. October is a winter month here, but thanks to climate change temperatures haven’t dropped as fast as they should, and energy demand is off the charts for this time of year. Cuban infrastructure is also technologically backwards, dating to the late 70s and 80s, and the country doesn’t have the money to import enough fuel or properly maintain its electricity infrastructure. Much of this is because of the us’s tightening grip on the economy, especially since Trump’s 2019 executive orders, which placed further restrictions on fuel, spare parts and new technologies. Similar power cuts have recently happened elsewhere in the region, in Panama, Ecuador and São Paulo. But when you combine these hostile climatic conditions with attempts to obstruct Cuba’s insertion into regional and global trading networks, you get a perfect storm.
Everything comes to a standstill, waiting for the power to return. In the meantime, food rots; it’s difficult to cook, especially when it comes to using domestic appliances—most people use rice cookers or electric pressure cookers; it’s hard to sleep without electric fans or air conditioning. Schools are usually shut, all the way from kindergartens to universities. Health facilities operate with very limited capacity and most small businesses are forced to close. People developed certain strategies to cope with the lack of electricity after Trump’s measures severely limited the oil supply. But it still comes as a shock, especially in Havana, which isn’t as accustomed to power cuts as other regions. The private sector and some richer households have been importing their own generators, which is quite different to what we saw during the Special Period in the 1990s, when the collapse of the ussr caused a prolonged economic slump. Back then, it was only certain state-sector facilities—like hospitals or factories or critical infrastructure—that had autonomous power sources.
They have become more visible in general, both at the upper and lower ends of the spectrum. After the liberalizing Reform process initiated by the Sixth Party Congress of 2011, the housing market was loosened up, and those who could afford it started buying better houses as well as building or renting properties for private businesses. There has been a proliferation of security devices, from private cctv cameras to sophisticated fences. High-end vehicles have begun to appear around Havana, imported by the private sector, and some parts of the city have become more expensive—dominated by a tiny, solvent minority. At the lower end, meanwhile, you can see things that either weren’t there or weren’t as noticeable before, such as street begging. There is more trash cluttering the neighbourhoods hit by oil shortages. And there has been a marked deterioration in some public services and social guarantees. These were once universal, the social grounding of a certain way of life. But with rising inflation and material deprivation, they have given way to more individual solutions, which exist for some but not others. For example, a lack of guaranteed medications has caused the black market to boom, but at prices that were unheard of even five or six years ago: up to thirty times more than they were in public pharmacies.
This reflects a dynamic, typical of capitalist societies, in which access to good and services is increasingly mediated by income level—rather than by, say, people’s political access or position in the state economy, as tends to be the case in highly centralized economies like the former ussr and Eastern Bloc, where there is a political distribution of the social surplus. Along with this shift, we have seen a change in the expectations of the wider population, whose wellbeing often relies on sheer luck: on remittances from family members in foreign countries or opportunities in the new private sector.
In some ways, the reforms were prompted by sudden external developments. The 2008 financial crisis hit the Cuban economy at the same time that hurricanes Paloma and Ike devastated large swathes of the country. But a slower internal process had also been playing out since the Special Period in the early 1990s. There was an ongoing debate about the state sector, which was not as dynamic or efficient as it should have been, and suffered from many of the typical shortcomings of centralized, state-managed economies. By 2008, the Cuban economic model was little more than a patchwork of solutions from the Special Period: the trading relationship with Venezuela, the recentralization programme, the Battle of Ideas—that is, the period of national debate launched by Fidel in late 1999, building on the popular mobilization to free Elián González, the six-year-old Cuban boy detained in the us. There was a double currency system: the so-called convertible peso was used by a sector connected to the world market through exports, remittances and tourism, while the standard peso was used by a sector that comprised much of Cuba’s domestic economic activity, social services and state budget. These realms coexisted and overlapped to some extent, but they remained fundamentally distinct, with separate prices and exchange rates. This led to difficulties in assessing the relative efficiency of the economy, as well as in accounting and investment.
This patchwork was unravelled by the 2008 financial crisis, and couldn’t be put back together. The 2011 Reform tried to move away from a state-centred model—involving the universal distribution of every important element of daily life—to a mixed one, in which the state sector continued to control the commanding heights, while allowing non-state actors, from co-ops to transnational capital, to form a new private sector. The seeds of this transition were already in place in the 90s, for instance in the expanding tourism sector, where the previous policy, of a social wage that the state sector would use to meet certain needs, was supplanted by a system in which prices, salaries and income played a much more pronounced role. This called into question the very idea of a command economy, and introduced more automatic price-based and market-based solutions. There was also change in who participated in the economy, how work was organized and how people reproduced themselves at an individual level.
The private sector, dominated by tourism and small traders, has improved the lives of a narrow stratum of business owners and workers, but it consists mostly of low-value activities which concentrate the country’s scarce opportunities for growth. It is still small, representing only 10 to 12 per cent of gdp, even though it employs a third of the total economically active population and its imports have risen dramatically over the last three years. The risks associated with this model became more apparent during the pandemic. For the duration of the crisis, state-sector employees received a percentage of their wages, providing a low but regular income, while many in the private sector lost all their sources of income and had nothing to fall back on. They still had some universal social guarantees, but that wasn’t nearly enough. So if the 2011 Reform was induced by an exogenous shock, it also created its own endogenous ones, because switching from one model to another meant that people’s livelihoods were endangered by this kind of deeply uncertain bet on the private sector.