There is No Money’: Cuba faces potential collapse amid Grid failures and Financial crisis

Cuba is teetering on the brink of economic collapse as it grapples with severe electricity grid failures and a deepening financial crisis, leaving citizens without consistent power and essential resources. The crisis, exacerbated by decades of sanctions, mismanagement, and the lingering impacts of the COVID-19 pandemic, has left the country’s economy at a standstill and its population in despair.

Power outages have become a daily occurrence across the island, with many Cubans enduring hours-long blackouts that have disrupted businesses, hospitals, and homes. The country’s aging electricity grid, powered largely by outdated fuel oil plants, has struggled to meet demand, leading to widespread outages that government officials warn could worsen as the energy crisis continues.

“There is no money to buy fuel, no funds to import equipment, and no short-term solutions to fix the grid,” said a Cuban energy official who spoke anonymously. “We’re doing all we can, but resources are extremely limited.”

The electrical grid failures come on top of a deteriorating economic situation marked by inflation, food shortages, and limited access to basic goods. Cuba relies heavily on imports for essential goods, including food and medicine, but a lack of foreign currency reserves has made it nearly impossible to secure these necessities. With inflation surging, the cost of basic food items has skyrocketed, leaving many families struggling to put meals on the table.

Cubans have taken to the streets in recent weeks to protest the worsening conditions, some chanting “No tenemos dinero” (“We have no money”) as a rallying cry against the government’s handling of the crisis. In response, authorities have deployed police to control the protests, though the government has also acknowledged the severity of the crisis.

“The situation is critical,” Cuban President Miguel Díaz-Canel said in a recent address, calling on citizens to remain resilient amid the hardships. Díaz-Canel highlighted ongoing efforts to attract foreign investment and secure international aid but noted that these measures are unlikely to provide immediate relief.

Economists note that the crisis is partly due to structural challenges within Cuba’s economy. With its heavy reliance on tourism, the country was hit hard by pandemic-related travel restrictions. Revenue from tourism, a primary source of foreign currency, plummeted, and despite the industry’s partial reopening, the sector has not rebounded to pre-pandemic levels. Additionally, support from Venezuela historically a key ally and energy supplier has waned, leaving Cuba more vulnerable to energy shortages.

“Without structural reforms and access to international markets, Cuba’s economy has no foundation for growth,” explained Dr. Enrique Morales, an economist specializing in Latin American economies. “What we’re seeing now is the result of both global challenges and years of internal economic isolation.”

In an attempt to address the power crisis, the government has been rationing electricity, prioritizing critical facilities like hospitals and food distribution centers. But in most cases, the measures have only offered temporary relief, with daily blackouts lasting anywhere from a few hours to half the day.

Ordinary Cubans, meanwhile, are increasingly relying on small, informal trade networks to obtain scarce goods. Some have resorted to bartering and trading on the black market for necessities, while others have sought help from family members abroad. Remittances from Cuban expatriates have provided some families with much-needed support, although strict U.S. sanctions have made transferring funds challenging.

For many Cubans, the immediate concern is surviving the current hardships. “We don’t have power, and we don’t have food,” said Maria Gomez, a resident of Havana. “People are tired of struggling every day just to survive. If things don’t change soon, we fear what’s coming next.”

As Cuba faces one of the most severe economic crises in its recent history, many fear that without intervention or systemic change, the island nation could face a humanitarian crisis of unprecedented scale.

AMN | Reporters | Havana.