What was once a beacon of socialist revolution now models a failed regime. Since the collapse of the USSR in 1991, Cuba has been slowly deteriorating into a nationwide crisis. Government mismanagement combined with a hostile international community has led directly to a struggling Cuba. Now, with nationwide blackouts plaguing the nation, the international community has begun to take notice of Cuba. However, if a reversal of Cuba’s current situation is to occur, it becomes imperative to look at the factors causing Cuba’s energy crisis and what can be done next.
Much of the Cuban energy crisis finds its roots in the international community. The Cuban Revolution was contested by two major parties: the socialist regime of Fidel Castro and a U.S.-backed democratic government. Through revolutionary success, leaders of the Soviet Union were convinced that Cuba could be a new example of socialist strength. Soviet influence quickly convinced Cuba of the necessity of ousting all United States industries and personnel from the island. The U.S. response came swiftly in a slew of international sanctions meant to cripple Cuba’s growth as a nation. Many of these sanctions are still in place today, with estimates of lost revenue reaching $144 billion.
A significant lack of support from the international community forced Cuban leaders to look elsewhere to develop. Cuba’s early developmental stage was characterized by heavy Soviet influence and reliance. In a bid to bolster the Cuban economy, a key trade relationship was formed between Cuba and the Soviet Union. The Soviet Union would export oil to Cuba at a reduced rate in exchange for buying Cuban sugar at an inflated price. Although initially beneficial, as Cuba was being overpaid and given the capital to build its economy, reliance upon this deal would soon prove to be detrimental. Cuba’s economy would soon become reliant purely on the production and exportation of sugar. At the peak of Cuban sugar production, it was estimated that 70-80 percent of the Cuban economy was made up of sugar production. Crucially, a lack of diversification in economic output would lead to an eventual collapse of the Cuban economy. Additionally, the importation of Soviet oil at a reduced rate would see Cuba become heavily reliant upon oil for energy production with little initiative in developing other energy technologies.
After the collapse of the Soviet Union in 1991, Cuba fell into an economic crisis. Its main oil supplier, the Soviet Union, was unable to provide the oil that Cuba so desperately needed. Seeking a new trade partner, the Cuban regime looked towards its Latin American neighbor— Venezuela. In the year 1998, Venezuela would experience a change in leadership towards a leftist government spearheaded by Hugo Chavez. Soon after his rise to power, Chavez and Castro would ally. In return for access to the world’s largest oil reserves, Cuba provided Venezuela with access to doctors and military personnel. Once again, Cuba found itself to be reliant upon another country for the production of its energy. Although initially sustainable, their relationship today has slowly deteriorated. Venezuela’s current situation has been marred by an authoritarian, anti-developmental regime. Thus, as Venezuela now struggles domestically, the attention they once lavished upon Cuba has been noticeably absent. Oil imports from Venezuela dropped by roughly 50 percent during the COVID-19 pandemic and have since only recovered to roughly 60 percent of initial capacity. With a significant cut in oil imports, Cuba has struggled to power necessary energy plants. With few new partners willing to provide the necessary oil, Cuba’s blackouts have only increased.
As a result of Cuba’s reliance on foreign oil, a lack of diversification in energy sources has become ever more apparent. Cuba has failed to maintain its current energy production plants and diversify its means of production. The major power plants that Cuba relies upon for its energy production are now nearing 50 years old, far surpassing the average 38-year lifespan for petroleum-based power. As power plants become older. they struggle to keep up with the ever-increasing demand for energy. Additionally, a lack of diversification means that 80 percent of Cuban energy output is generated through petroleum products. Since the collapse of the Soviet Union, Cuba has failed to make any significant developments to its power grid. Extreme underfunding in the infrastructure sector has slowly compounded into the current energy crisis.
Much of the blame for underfunded infrastructure in Cuba can be laid on the international community. International sanctions have weakened the Cuban economy to the point that little capital can be reinvested. The United States remains the only major power in an economic embargo with Cuba. Despite increasing pressure from the United Nations, the American approach seems unlikely to change. While the Obama administration eased sanctions on Cuba, increasing investment, lowering tourism barriers, allowing for remittances, and growing the economy by 12 billion dollars, the Trump administration reversed this policy. Claims involving state-sponsored terrorism and support for the neighboring regime of Nicholas Maduro fueled the Trump administration’s desire to sanction Cuba further. With the introduction of the COVID-19 pandemic and heavier sanctions, Cuba quickly fell into a state of disarray. Economic output once again tanked falling by 10 percent in the year 2020 and has failed to make a full recovery since. Although the Biden administration claimed it would reverse the decisions of the previous Trump-led government, it has failed to do so. Sanctions against Cuba remain crippling, stifling its potential economic growth and ensuring key sectors stay underdeveloped. Due to the efforts of the United States, Cuba lacks the monetary ability to revolutionize its energy production sector.
Although the Cuban energy crisis initially seems to be a case of one major failure on the part of the Cuban government, it actually comes from numerous systemic failures. The Cuban regime has failed to diversify its own economy and energy production, relying too heavily upon the international community. In turn, the United States has played an active role in suppressing the development of Cuba. Yet, with no imminent change from international policy or the Cuban regime, the crisis will continue to worsen.