This article is republished from The Conversation, an independent and nonprofit source of news, analysis and commentary from academic experts. Joseph J. Gonzalez is an associate professor of Global Studies at Appalachian State University.
For the in a year, all of Cuba on Sept. 10, 2025. Even suffered during the nearly 24-hour power outage.
That鈥檚 because Cuba鈥檚 power grid is , and the country cannot afford to import it needs to keep the lights on.
As a , I believe that the ongoing blackouts point to larger economic problems facing the country. While much of that is due to the continuing effects of the , which since 1960 has obstructed American trade and tourism with the Caribbean island, Cuba鈥檚 leaders also deserve a share of the blame for their economic mismanagement.
Indeed, while other nominally communist countries, such as Vietnam and China, have facilitated the in their economies in the past several decades, officials in Havana so as not to .
The result has been a less vibrant, less productive network of private enterprises unable to provide that Cuba so desperately needs. All the while, Cuba鈥檚 communist government as it struggles to maintain power in the face of popular discontent.
The external factors of the crisis
Since 2020, Cuba鈥檚 gross domestic product 11%, with economists of 1%-2% in 2025.
There are a number of reasons for this decline.
Tourism, Cuba鈥檚 lifeblood, since the COVID-19 pandemic. Meanwhile, Venezuela, which subsidized Cuba for a decade in the 2000s, , no longer to do so. Further, persistent energy shortages in Cuba have led to steep declines in and production.
Cubans wait to fill their water containers from a water truck in Havana on Sept. 29, 2025. From a broader perspective, the U.S. embargo also continues to harm the Cuban economy. For , Cubans have been to the United States 鈥� and Americans to travel to or Cuba outside of very limited categories.
Estimates vary the embargo damages the Cuban economy, but it seems certain that the 鈥渂lockade,鈥� as Cubans call it, deprives the nation of , if not billions, of U.S. dollars in trade every year, most particularly in and .
Steps toward domestic reform
While external factors have taken a toll, the persistent economic difficulties facing Cubans are also self-inflicted by the government.
Cuba鈥檚 leaders have pursued a , and sometimes path toward economic privatization 鈥� especially when contrasted with other officially communist countries in Asia.
Following Fidel Castro鈥檚 departure from public life in 2008, Cuba鈥檚 subsequent leader, and Fidel鈥檚 brother, Raul Castro, intended to encourage private enterprise that had long been curtailed by the government.
Under Raul, the state allowed Cubans to ; they could also businesses, and even to whom they were not related 鈥� practices prohibited under Fidel Castro.
The government also allowed more foreigners to , principally in , provided they confined themselves to .
Cubans were also permitted for the first time in decades to , setting their within limits. Collective farms, the bane of Soviet agriculture that had once inspired Fidel鈥檚 revolutionary visions, were the norm.
By 2017, about held licenses to start businesses, while the private sector employed about of all workers.
In the years immediately following these reforms, Cuba posted some gains in and and GDP. Indeed, during the mid-2000s, Cuba posted , sometimes in excess of 10%.
Domestic progress stalled
Unfortunately for Cubans, the upward trend did not continue.
And that is in no small measure due to Cuba鈥檚 prosperity in the 2000s being built on Venezuelan subsidies, not by Cuban entrepreneurs.
Venezuela鈥檚 late president, and longtime Castro admirer, Hugo Chavez, began to shortly after taking power in 1999.
A petrostate, Venezuela provided much-needed oil to Cuba on , while also for doctors to work in Venezuela鈥檚 hospitals and clinics, providing Cuba with the to pay for imports.
Researchers estimate that the Venezuelan government subsidized the Cuban economy by per year until 2016.
Venezuelan oil allowed Cuba to paper over a starker reality: Despite reforms, Cuba鈥檚 entrepreneurs remained hamstrung by .
Thanks to ever-changing regulations, the majority of private businesses and dedicated to personal services, such as restaurants, hairdressing, seamstressing and repairs.
On a larger scale, Cuba鈥檚 state bureaucrats see , especially in tourism, as a threat to their power and privileges. Taxes also remain for private firms.
Meanwhile, the larger private businesses that are now are almost always, according to a number of my Cuban-based sources, connected to friends or family members of the political elite, not average Cubans.
There have been successes, to be sure. The private sector now accounts for by volume than state enterprises.
But the employed by the private sector remains about what it was in 2019, while private enterprise accounts for only about .
The unsustainable present
Confronting multiple crises, Cuba鈥檚 leaders continue to and policy from Washington that has become only more bellicose under President Donald Trump. No doubt drawing optimism from before, the Cuban government seems committed to a state of defiance.
But the evidence this time around suggests Havana鈥檚 leaders should be less sanguine.
Despite , Cubans enjoy widespread access to the internet and they just how bad and how inequitable things are.
For all the government鈥檚 rhetoric and commitment to a decades-old revolution, Cubans see a much-vaunted , unable to provide drugs, procedures 鈥� or even electricity. They know that , while the value of the Cuban peso relative to the dollar
Cubans play dominoes on the street during a blackout in Havana on Sept. 10, 2025. Cubans see and hear of their , with links to state enterprises, flaunting their wealth. Cubans may also know that their military holds as much as 鈥� about 16% of Cuba鈥檚 GDP in 2024.
What they certainly know and experience is the reality of being forced to live without power, with no possibility of improvement in sight.
Limited choices going forward
Historically, Cuba has been pulled from crises by willing to subsidize its revolution.
But Russia鈥檚 strategic position, China鈥檚 global priorities and all make that unlikely right now. And with the U.S. now pursuing a policy of maximum pressure against noncompliant governments in Latin America, Havana can rest assured that it will see little breathing room from its powerful neighbor and long-time antagonist.
That leaves the Cuban government with only a few options.
It could choose to continue its citizens鈥� access to the internet. Unfortunately for the state, the is the lifeblood of the private sector.
Cuba鈥檚 leaders could also choose to rely on the loyalty of its security forces and their ability to intimidate and abuse their fellow Cubans. That has , but given Havana鈥檚 scarce resources and its limited capacity to reward its henchmen, it is not clear that the government can afford to adopt this approach indefinitely.
Of course, Cuba鈥檚 leaders could take steps toward further reform the private sector and eliminate the waste and corruption that have increasingly defined the Cuban state.
Such a course would require the government to permit all Cubans, not just a well-connected few, to compete with state enterprises. It would also mean allowing for a greater degree of foreign investment, which due to government policy.
If the past offers any guide, however, Havana will instead continue to rely on its apparatus to repress is citizens, while privatizing in ways that do not threaten the power and privileges of the elite.
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