A country that does not progress: Socialism condemned Cuba to a stagnation that has been going on for 30 years

The Caribbean country’s per capita income has failed to grow at all since 1988. The economic collapse of the “special period” and the subsequent insufficient recovery condemned the country to backwardness and social marginality.

Cuban socialism condemned any type of economic progress for the people who suffer it year after year on the island. According to data published by the Castro dictatorship itself through the Cuban National Statistics Office, income per inhabitant in real terms did not grow practically at all between 1988 and 2021.

In 33 years, the average quality of life for Cubans, measured by the purchasing power of the national average income, only improved by a meager 0.24%. This is one of the most drastic and violent economic failures recorded for the region in the period described, only behind the catastrophic performance experienced by Haiti.

The first great factor to explain the failure of the socialist model in Cuba was the collapse of the Soviet Union, and thus the end of the commercial influx of what until then was its largest commercial partner in the world. The USSR also functioned as the main lender to finance the large fiscal imbalances that Cuba maintained throughout the 1970s and 1980s.

By the beginning of the 1990s, Cuba entered into a profound economic collapse that was described by the authorities of the dictatorship as the “special period.” The self-blockade imposed by the island prevented the efficient replacement of Russia as a commercial partner, and the terrible economic organization forced the Government to monetize the imbalances that it could no longer solve with foreign debt.

The post-crisis recovery of the 1990s proved to be much less profound than expected, since the country did not even recover the already very poor long-term growth trend that it registered in the second half of the 20th century.

Starting in 2015, Cuba once again faced a situation of stagnation, and the shock caused by the 2020 pandemic meant the coup de grace to precipitate a new economic collapse on the island.

The current reforms on the country’s exchange, monetary and commercial system do not modify the bureaucratic and statist structure that has remained unchanged for decades. The size of the Cuban State averaged 65% of GDP in the last 30 years, reached 69.2% of the product in the midst of the pandemic and fell to 58.8% after the adjustment and the inflationary shock of 2021.

With information from La Derecha Diario