Dark times for Cuba’s economic experiment

Cuba is in crisis.

“Since January, the U.S. has been preventing almost all oil from reaching the island.”

Doctors can't get to the hospitals where they work, many buses aren't running trucks, can't

deliver food and medicine where they're needed. People's lives are in danger because there are frequent and long blackouts. In the last few weeks on more than one occasion, the entire country has lacked power. In one case, for more than a full day. We wanted to understand what it's like for people trying to make their way in Cuba right

now. What it's like to try to work or to run a business. Because even though Cuba has a communist government, at times it's also had a pretty thriving private business sector. But recently, these blackouts have become so frequent that it's hard to even charge your

phone, sell service and internet or spotty. So I've been talking to people through voice notes.

“Like this farmer, Lady Casimito, who says she can only use her phone for about two hours”

a day and never knows when.

She also told us right now she has no gas, so she can't get to the other farmers she works with. All right, I can win the win the win. Hotel manager named Alfredo Medero Scarsia told me when the electricity is out, you have to keep the fridge closed.

Try not to open it. And then when the electricity comes back on, you jump into action. A lot of people said that if the power comes on in the middle of the night, that's when they cook. That's when they work on their computers.

Use their phone. This guy who runs a bicycle business.

“Yes, there Gonzales Cabrera was up for sending more than just a few messages.”

So I said, OK, I'll record my questions. He gave us a see the answer and you record your answers. And that's what we've been doing. In one of his earliest messages, he told me things have been bad in Cuba for a while. At the recent oil embargo, and the resulting blackouts, it's affecting every aspect of life.

La Vida, the basic life, no? And some messages his voice sounds normal. And I will go and I'm on the other side. Can hear the birds in the background. Sometimes he's walking down the street in his Savannah neighborhood or he's in his kitchen

cooking. Sometimes music is playing bad. But then sometimes records these voice notes and it sounds like he's just sitting by himself in the dark. He tells me he worries about his parents, because the electricity situation for them is even

worse. Because they both live in more rural areas and the government is prioritizing cities. Yes, there is the bike guy in Cuba and he'd think with so little electricity across the island, maybe bikes might actually be a good business at this moment in time, except to make any money he needs tourists.

Which Cuba used to have, because even though Cuba was once a hundred percent strict communist state run economy, at one point, not that long ago, it had a small but vibrant private sector. At the height of, yes, there is business. He was running bike tours for like 400 tourists a month.

But last year, he only had about 25 customers total all year. And now with everything going on, it's even worse. He says he hasn't even had a paying customer this year. You can hear in his voice how hard things are. He said not only is it hard to live like this, it's stressful and it makes him sad.

He told me I always used to see a lot of potential for my work in Cuba, but now he doesn't

see any future. Hello and welcome to Planet Money, America Baris. The long and winding economic experiment that is Cuba has an extremely uncertain future. Yasser's parents grew up in communist Cuba where the state was in charge of everything. And Yasser came of age in a much looser, some might even say capitalist Ish Cuba, where

he could start his own business. And now, Yasser can't even plan for a phone call, much less run a business. Today on the show, how did Cuba get here? For more than 60 years, Cuba has survived on two seemingly contradictory economic strategies,

Capitalism.

And right now, it seems like the US is making both strategies impossible.

When I asked Yasser, how did all this happen?

“How did Cuba go from this mini boom to near failure?”

Was it because of the US oil embargo over the last few months? I'm guessing he listened, rub this temples and was like, where do I start? What was happening in the last few months is an intensification of what happened last few months is an intensification of what's been happening for a long time. So, for help with my complicated questions, I also contacted an economist.

So you are Cuba. I am Cuba. What on race? But you're not in Cuba now. I'm not in Cuba.

I left Cuba almost five years ago. This is Ricardo Torres, an economist who we can't speak with on the phone right now because

“he does have regular internet and socialists.”

He's in Washington, D.C., he works at American University. But before all that, Ricardo lived and studied economics in Cuba. So he was the perfect person to talk to us about Cuba's decades-long economic experiment. Going between its communist compatriots and its frenemy, capitalism, starting with the 1959 revolution, which Ricardo learned about in elementary school.

When his teachers would tell him the heroic story of the great revolution led by their beloved leader, Fidel Castro. Before 1959, Cuba was run by a dictator and American companies ran most of Cuba's sugarfields and refineries, rare roads, hotels, casinos. Then Cuban rebels overthrew the government and made Cuba into a socialist communist country.

Cuba is just 90 miles from the U.S. and this was a cold war. These two countries became the opposite of compatriots. So the U.S. imposed what soon became the mother of all embargoes on Cuba. Nothing from the U.S. could be exported to Cuba. So at the outset, Cuba's economic strategy was lean on its communist friends, its compatriots.

At this point, Cuba was 100% fully communist. Everyone was employed by the government. The government appointed people to jobs, its set wages, and it owned and controlled everything. The government gave people little ration books, little paper books that told them how much of what kind of food a person or a family could get in a given month at a given store. The Cuban government now owned the tobacco and sugar industry.

One to get the other things that needed, especially oil, it relied on its most powerful communist commodity, the Soviet Union. The Soviets bought Cuban goods for more than they were worth, and sold Cuba oil for less than it was worth. They also got access to an island 90 miles away from their mortal enemy, the United States.

That for a few decades, yeah, it worked, Cuba was poor, but collaboration with the Soviets kept it going, even the poor in Cuba, they had their basics covered. Like shelter, like shelter, like the through the rationing book, sufficient food, and then

you could always send your children to school and you were taking care of if you got

oil because a healthcare was accessible and free of charge. With help from the Soviets, Cuba developed a strong healthcare and education system.

“But in 1991, Cuba lost its key competitor, the Soviet Union broke up and stopped being”

communist. Right. And those post-Soviet countries stopped paying top dollar for Cuban exports, and sending Cuba cheap oil. And this was devastating for Cuba.

This period in the early 90s was called the Special Period, which makes it sound good special.

Was actually terrible, there was less food, Cuba's GDP sank by 35 percent.

People were suffering, fleeing some people even making rafts out of whatever they could find and trying to float to the U.S. The recorder says, "Many Cubans still believed in the revolutionary dream. They didn't have material reserves, but they did have faith. What he calls moral reserves."

In a way that, okay, socialism does work, we just had now bad luck, we were abandoned, we were left behind by these countries, traders, as they would put it in Cuba. But we figured it out, and we'll go back to that period of well-being. By that time, Ricardo had gotten his hands on an old Soviet economics textbook that extoled

But young Ricardo was wondering, "Okay, well, why did the Soviet Union break up and ditch communism if it was so great?" "Well, perhaps reality is a little bit different from what I saw in the book." And this was a moment where maybe Cuba had to reassess its strategy.

“Like, are we going to survive sticking only to this communist compatrails crowd?”

So, a few years after the Soviet Union broke up, and Cuba no longer had its help, Cuba

for the first time in decades be grudgingly tried basically hanging out with some capitalist

frenemies. In 1993, Cuba started its first experiment in capitalism since the revolution. I'm going to call it Caribbean communism, but with a teeny tiny capitalist exception. Ricardo says this was supposed to be temporary. But it was a big deal.

Yes, before everyone was employed by Cuba. But now, Cubans could be self-employed, have their own businesses. In the US, this made big news. This is week-end edition, I'm Scott Simon, Fidel Castro, changed his economic cabinet this week. Moated several ministers considered to be reformers.

This has been interpreted as one more sign of Cuba's increasing turn to market-oriented reforms as it tries to cope. Scott, there were a lot of restrictions on this new private sector, these new private businesses. Your employees had to be family members, and you could only have so many of them.

The realities that they had little freedom in making important decisions when it comes soon production, prices, and all kinds of things that we would associate with free enterprise. Basically, anything meaningful to a business was not up to you. It was up to the state. So this was a tiny first move, the number of people working in small businesses was really

small. Lesson 1%. They tried a few other things, like a first small experiment in tourism, an experiment, pegging a second currency to the dollar. But none of that was enough to pull Cuba out of its economic crisis.

So Cuba turned back to its old friend group, went to its communist and socialist compatriots for help.

“Who are further developed its relationship with China?”

For example, they got a great deal from China on about a million bikes to deal with all

those fuel shortages. But the biggest alliance that Cuba made during this time was with Venezuela, the land of oil. There's this famous beach where Hugo Chavez is in Havana, praising Fidel Castro, saying US free trade ideals are basically overturned to colonialism. And he talks about how Cuba is in the dreams of every Latin American Revolutionary.

Ricardo says in the year 2000, Venezuela and Cuba agreed to their own sort of trade deal. Cuba started providing services to Venezuela, teachers, doctors, also boxing and baseball coaches. Yeah, they didn't change Venezuela. Basically, something oil.

Uh-huh. Venezuela sent oil. She's the one thing that Venezuela had that Cuban idiot. That was the trade. When it came to oil, Venezuela took the role that the Soviets had played.

And soon, Cuba's GDP was growing faster. Cuba was back from the brink. In the early 2000s, Ricardo got a job teaching economics in Havana. As an academic, he was able to visit Europe in the US. And he says he could have left Cuba.

But he was like, why leave when I can study and maybe even influence this giant economic experiment? Why not?

“I mean, this is a good place to be if you want to do something for your own country.”

The Cuban government has been infamously repressive of descent. But Ricardo says as an economist, he was able to access and study data and hold public discussions about the Cuban economy. And that's what he was doing when Cuba started shaking up its friend group again, because Fidel Castro, Cuba's original communist leader, got sick and his brother Raul took over.

He started talking about our economy, it's not in good shape, and we can trace some of the factors behind that to our economic system. So we need to introduce some changes here. Stay communists, put get a little more capitalist, open up some more, crank up this capitalism thing.

The kick this up a notch. Our role Castro said, let's expand our teeny tiny private sector at the time Cuba's small businesses

were basically tiny restaurants or other people's homes or taxis or people renting rooms

out of their houses.

of their families.

And try to bring in more tourists.

“The government updated a list of jobs people were allowed to hold.”

Now they had almost 200 options, like a barber, someone who dresses up an old Havana for tourists is like a fortune teller or an old school dandy, specific musical acts for the now medium size and still growing tourism industry. This wasn't like capitalism unleashed though. Procordus has the government was still wary of the free market taking over.

Still Raul is actually talking to the United States around this time. President Obama starts to loosen restrictions on trade and travel with Cuba and Cuba's private sector grows even bigger. It was around this time that you said the kind of Anna who's been answering our questions, via voice notes, really got into bikes.

He was in his 20s, he was working as a software engineer, and he had heard about all this bike stuff that was happening in the US and other places, things like dedicated bike

“lanes, city run, short-term bike rentals.”

And he was like, we need to have that too! He started a company called CityCletta, hosting bike tours in the capital. The group's riding their bikes through the streets of Havana with him, I've seen all these videos of him leading tourists on bikes. Everyone seems happy, keep it looks beautiful, there's just, you know, general good vibes.

And in 2016, President Obama visits Cuba, the first president since the communist revolution

to visit the island. It's a historic opportunity to engage directly with the Cuban people, and to forge new agreements and commercial deals to build new ties between our two peoples. For us, this was awesome, he was giving bike tours to people from everywhere, Germany, Holland, Australia, Canada, his customers were Mexicans and Colombians, and tourists from the United

States. Cuba was open for business.

“The luxury fashion house Chanel just staged its very first show in the Cuban capital.”

Fast in the furious film there. The Rolling Stones held a monster concert in this country where Rakan Role had once been restricted.

That boom, you know, lots of people wanting to visit Cuba, in part was driven by this romantic

idea. Well, you know, Cuba is changing so fast. It's no longer going to be a communist country or a socialist country in a few years. So we want to go there and see it before it changes completely. And we have McDonald's in every corner of Cuba, like everywhere else.

So we want to see it before it ends. Many hundreds of thousands of Americans and their dollars went to Cuba around that time, including me. I was there, too. And so was our producer on the show, Luis Gayo.

Up until this point, Cuba had oil from Venezuela and tourists from the US and elsewhere. It was boom-tastic. Oil from its friends, tourists from its frenemy. But of course, that all came to an end. That's after the break.

So in the heyday of Cuba's flirtation with its frenemy, capitalism, the country leaned all the way into tourism. In the '20s, tourism was supposed to be the people's capitalist growth engine. Cuba still had state-owned industries. It was still exporting sugar, some cars to fund its government, and it was still getting

help from its allies. Cheap oil from Venezuela, cheap solar panels from China. Cubans could also buy sneakers, or dishwashers, or cosmetics, or buck spray. In the US. But to make money, more and more Cubans were going into tourism.

People were converting homes into hotels, opening restaurants. Yes, there was leading his bike tours. Cuba's economy was growing in large part because of one industry. Tourism. Small economy is they tend to be more specialized than big economies.

And then if your main industry is effective for one reason or the other, then you are in troubles. Did come for tourism in Cuba?

The first big shock was sort of a slow-moving one.

“Venezuela's economy started to fall apart, so starting in 2016, the country sent less”

and less oil to Cuba. The second big shock came when President Trump took office for the first time in 2017. Trump was not on board with the warming relations between the US and Cuba. He cited the country's human rights violations and accused it of spreading violence and instability, accused Obama of propping up a repressive regime.

So, Trump brought back many of the economic sanctions Obama had relaxed. And have a leave restricted travel again. Third shock to this new tourism-based growth engine, the pandemic. Travel just stopped.

From boom to bust, but like, without preparation or anticipation of any kind, like in a few

months, all gone almost all gone. Both front-of-means and competitors were giving Cuba the cold shoulder. Cuba had a new president by then, and he tried to fix the country's alien economy. He said those small businesses we've allowed now, those can get even bigger. Companies can hire more employees up to a hundred.

According to government in the statistics, there were almost 10,000 of those operating in Cuba. Part of that, some Cubans made big money, but he says even before this latest venture into capitalism, the loosening of government controls had given rise to a culture of half and half knots.

There'd be a blackout across much of the country, but in some richer neighborhoods in Havana, people would still be partying. They'd have lights on, eating lobsters, and Cubans did not accept it. There were protests, people said the government wasn't taking care of their needs. Ricardo says that people were running out of that thing he called moral reserves.

They're faith that the Cuban experiment could ever work. Ricardo, too, was frustrated. In 2021, he was preparing to go to the US for a fellowship and looking around. He decided that this time, when he left, he wasn't coming back.

“I think I've contributed more than enough, and I've sacrificed to many things as well.”

So I said, OK, well, it's time for a new beginning in elsewhere in the US was that place. He was part of the biggest wave of migration at Cuba yet, according to one estimate, nearly

3 million people have left since 2020.

A quarter of the population. And now, when Ricardo goes back to visit, he says it seems Cuba's rich are getting richer. You see Teslas and escalates on the streets, but he says Cuba's poor are also getting poor. Things that were unthinkable in Cuba before, and I say it with sorrow, I'm not proud about those.

You know, beggars, people like looking for food in trash cans, that's become very common. Trash was piling up. Ricardo says that's the Cuba he saw the last time he was there in 2025. And then at the start of this year, the US captured the president of Venezuela, and essentially took over its oil industry.

So that lifeline, Cuba was getting from its best compatriot was the ink to it. The Trump administration told Venezuela no more oil for Cuba, and they told other countries that would have sold oil to Cuba, like Mexico, that if they do, they will get tariffed. And this week, after several months preventing any oil tanker from reaching Cuba, President Trump changed his mind.

Decided, yes, he would let a tanker from Russia land on Cuba's shores. Ricardo says it seems Cuba is at the mercy of the US. The oil embargo has exposed all the vulnerabilities of Cuba at once. US foreign policy is choking off much of the help the Cuban government gets from its allies. And Cuba's big industry, tourism requires tourists who either can't or won't visit a country

who's antiquated Soviet electrical system definitely cannot survive a US oil embargo. So now you are confronting your two real challenges. One is, it's functional economy at home, and then the US government, 90 miles away.

“The only way out for Cuba is through a negotiation with the United States.”

And the US is turning out to be a very ferocious friend of me. The voice notes, yes, air keeps sending me, are sounding pretty hopeless. No one is paying for bike tours, but at the same time, he says, he feels a responsibility to keep holding these biking events, just free ones, teaching Cubans to bike.

Like even with the blackouts, he recently held a big bike gathering in a park.

something during these days where they have nothing.

“And Yasser says a lot of people around him have this notion that bikes are a tool of necessity.”

These things that were shipped over from China during Cuba's first oil shortage, back

of the 90s. It's shown to shake that. He doesn't want people to think of bikes as just how you get around when there's no gas. He wants people to think of them as a way to engage and interact with the world, the way to

beat together, something that can bring joy, even during this very difficult time.

!

“Hi, I'm so excited that we are going to see you in person on our book tour.”

I am going to be on stage in Pittsburgh on Wednesday, April 22nd. And I'm going to be in Los Angeles on April 16th.

The book is called Planet Money, a guy to the economic forces that shape your life and

are coming to a dozen cities. Each shop will be unique with different hosts and guests. And if you get a ticket, you can also get a tour exclusive tote bag with your purchase while supplies last.

“Find the show nearest to you at the link in the show notes or go to planetmoneybook.com.”

And thank you. Today's episode was produced by the great, great Luis Gio. He's headed off to greener pastures and we're going to ask you what you were so good. Hi! So good.

You were so good at this job. Thank you so much. The show was also edited by Marian McCune. It was fact checked by Sierra Watas and engineered by Robert Rodriguez. Alex Goldmark is our executive producer.

Thank you to Ada Paralta, Saradoti, Margarita Fernandez, Jasper Goldman and Michael Boostamante. I'm Erica Varys. And I'm Nick Fountain. This is NPR. Thank you for listening.

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