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Socialist Economics

U.S. sanctions are not responsible for the Cuban economic crisis

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As anti-government protests erupted in Cuba due to a worsening economic situation in the country, people on all sides pointed fingers at those they deemed to be responsible for the economic crisis. Cuban President Miguel Diaz-Canel, who succeeded Raúl Castro in April 2021, believes U.S. sanctions are to blame.

He referred to these sanctions as a “policy of economic suffocation” that violates the human rights of the Cuban people. He demanded the United States lift the embargo immediately. Many hold a similar view and believe lifting the U.S. embargo on Cuba would help the Cuban economy.

However, the U.S. government and many anti-government Cubans believe the economic crisis was caused by the Cuban government’s mismanagement of the economy. U.S. Secretary of State Antony Blinken said that accusing the U.S. government of being behind the protests in Cuba was a “grievous mistake.”

Secretary Blinken went on to claim that the protests are a result of the Cuban people being “deeply tired of the mismanagement and repression” that they face at the hands of the Cuban government. “They are a reflection of the Cuban people, not the United States or any foreign actor,” said the Secretary of State.

Cuba’s repressive regime is responsible for the crisis, not U.S. sanctions

While the Cuban government claims that U.S. sanctions are a violation of the human rights of the people of Cuba, the Cuban government’s own human rights record is not exactly stellar.

According to numerous NGOs such as Human Rights Watch, the Cuban government frequently restricts the Cuban people’s right to free speech and freedom of expression. People are often jailed for expressing their views. One such person was Dr. Eduardo Cardet, who has been called a prisoner of conscience by Amnesty International. 

According to the exiled rights group Cubalex, at least 80 demonstrators, activists, and independent journalists have been jailed around the country since the protests began.

Despite being a communist state that claims to fight for the rights of workers, the Cuban government suppresses labor rights.
According to the 2020 World Report by Human Rights Watch, the Cuban government has violated conventions of the International Labor Organization regarding freedom of association and collective bargaining, a convention that Cuba itself ratified!

While the unrest in Cuba is primarily about poor economic conditions, many protestors also want political reform, protesting against the human rights abuses perpetrated by the Cuban government which has added fuel to the fire.

The Cuban government appears far more responsible for the current suffering in the country than the effects of the U.S. embargo. But even when it comes to the economic situation in Cuba, the Cuban government’s claims that U.S. sanctions are responsible for the economic crisis is inaccurate.

The embargo does not prevent Cuba from trading with other countries; it only prevents trading with the United States. According to the Observatory of Economic Complexity, countries that trade with Cuba include China, Russia, Spain, Germany, etc. with tobacco and sugar being some of their largest exports, while poultry meat, corn, and wheat are some of their largest imports.

Historically, Cuba relied heavily on Soviet subsidies

The real reason behind the Cuban economic crisis was the fall of the Soviet Union and the mishandling of the economy by the Cuban government. The Soviet Union was an important trading partner for Cuba and provided extensive subsidies.

According to United Press International archives, in 1983, Soviet economic aid to the Castro regime likely amounted to about $11 million per day. This Soviet assistance took the form of both direct aid and subsidized purchases.

But as the Soviet Union collapsed and the subsidies and trade stopped, the economic situation in Cuba immediately began to deteriorate. Authorities on Cuba at the Soviet Academy of Sciences even predicted that the cut-off in Soviet economic assistance would “fully paralyze” the Cuban economy within a year.

The Cuban economy has struggled since the fall of the Soviet Union. Just like other countries that have a planned economy, the government failed to manage the economy well. Planned economies such as Cuba are always outperformed by nations that have a mixed or a market economy.

In countries around the world such as Vietnam and India, market liberalization has improved the economy drastically and reduced poverty. According to the World Bank, GDP per capita of both the countries has rapidly increased since they began embracing economic liberalization in the late 1980s and early 1990s.

However, Cuba maintains a planned and heavily regulated economy, and thus has not seen any improvements that were seen by countries that began to embrace economic liberalisation.

It should also be noted that after criticizing the U.S. and blaming the embargo, President Miguel Diaz-Canel admitted that the Cuban government has a degree of responsibility for the protests, saying in a televised address: “We have to gain experience from the disturbances.”

U.S. sanctions are clearly not the cause of Cuba’s economic failure. If the Cuban government wants to see improving economic conditions in Cuba, they should, like many other nations have in the past, start embracing market liberalization. And while it is unlikely to happen, allowing multi-party involvement in politics and holding free and fair elections would help bring an end to the unrest in Cuba.

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This piece solely expresses the opinion of the author and not necessarily the organization as a whole. Students For Liberty is committed to facilitating a broad dialogue for liberty, representing a variety of opinions. If you’re a student interested in presenting your perspective on this blog, send your piece to [email protected], and mention SFL Blog in the email subject line for your chance to be published and be seen!

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