International
Cuba, crisis and dollarization: without foreign exchange there is no country
The shortage of bread and rice, liquefied gas and gasoline, basic medicines and public transport, even daily blackouts. Many symptoms of the Cuban polycrisis have their origin in a common problem: the lack of foreign exchange of a state that monopolizes vast sectors of the economy.
The Liquefied Gas Company reported on Monday that it had no balitas (cylinders) until “the next import”, just one day after a freighter with 24,000 tons of wheat docked in Havana, where the manufacture of bread had been paralyzed due to lack of flour.
For weeks the queues at the service centros (gas stations) have been perpetual and many electric generation engines remain at a stop due to a shortage of imported fuel, while large areas of the country suffer blackouts of 20 or more hours a day.
“There is a critical shortage of foreign currency in the country,” Cuban economist and doctor in Public Policies Tamarys Bahamonde told EFE.
Independent experts consulted by EFE agree to start with the collapse of national agricultural and industrial production, which has skyrocketed imports, which account for 80% of what the country consumes, according to the United Nations.
In turn, the main sources of foreign exchange income – tourism, remittances, professional missions (mainly medical), sugar, the biopharmaceutical sector and nickel – have fallen significantly.
This has generated a strong imbalance in the accounts of the State, which exercises the monopoly of foreign trade and other key sectors.
“If there is no production that you can stop importing, we will not get out of this vicious circle,” says Cuban economist Omar Everleny, professor at the University of Havana.
The financial situation is such that in the middle of last year the Government began to decide on budget execution on a regular basis, depending on the actual income of each month.
The Cuban Government underlines the weight of US sanctions and the financial effects of their inclusion in the list of countries sponsoring terrorism for this crisis. The experts, for their part, highlight the internal causes (without denying the damage of the blockade or embargo).
Cuban economist Ricardo Torres, a professor at the American University of Washington (USA), talks about structural imbalances of decades and denounces a bad allocation: “More than a problem of resources, it is a problem of use of money.”
He explains that the Government has financed in the last ten years a “massive construction of hotels” – a sector in the hands of Gaesa, the army’s business consortium – despite very low occupancy rates.
“Seeing the public numbers, I come to the conclusion that it is a country in crisis, without a doubt. But with that I can’t justify that there is not even for wheat,” he says.
The consensus among the experts consulted is that 2025 will be the same or worse than 2024, in which the economy contracted. After five years of serious crisis, Cuban domestic product (GDP) is below 2019 levels.
They do not believe that the measures announced by the Government at the end of 2024, including a deepening of the dollarization of the national economy from the State, will reverse the situation.
Not without controversy, the Government has begun to charge in currency for customs procedures and higher octane gasoline, among others, in addition to converting part of its retail stores into establishments that sell in dollars.
Bahamonde sees in these decisions a copy of those that were taken in the crisis of the 1990s, and that were then reversed.
“It’s a way to raise money. Is it a long-term measure? No, will it guarantee economic development? No, what about growth? Neither. It is purely revenue, rential,” says the economist, who speaks of “subsistence economy.”
Everleny believes that many coordinated and in-depth reforms against the crisis in Cuba would be needed, something he does not perceive after the two severe adjustment packages approved in the last 15 months.
Bahamonde advocates making foreign trade more flexible, establishing a real foreign exchange market, extending participation to the private sector in domestic trade, renouncing the model of centralized administration, and eliminating Gaesa’s control over the Cuban economy, in general, and tourism, in particular.
“All solutions are medium and long-term, but people on the street need solutions today. If drastic, quick measures are not taken,… the time horizon of the resolution is moving away,” he warns.
In Everleny’s opinion, “the state needs long-term aid, like the International Monetary Fund,” because the country has already reached the point of “break”.
However, he himself does not see this option as viable because Cuba does not belong to these international organizations and because he believes that the United States would not approve financing lines for Havana.
International
U.S. and Mexico Reach Deal to Address Water Deficit Under 1944 Treaty
The United States and Mexico have reached an agreement to comply with current water obligations affecting U.S. farmers and ranchers and for Mexico to cover its water deficit to Texas under the 1944 Water Treaty, the U.S. Department of Agriculture said in a statement.
The department уточified that the agreement applies to both the current cycle and the water deficit from the previous cycle.
On Monday, U.S. President Donald Trump accused Mexico of failing to comply with the water-sharing treaty between the two countries, which requires the United States to deliver 1.85 billion cubic meters of water from the Colorado River, while Mexico must supply 432 million cubic meters from the Rio Grande.
Mexico is behind on its commitments. According to Washington, the country has accumulated a deficit of more than one billion cubic meters of water over the past five years.
“This violation is severely harming our beautiful crops and our livestock in Texas,” Trump wrote on Monday.
The Department of Agriculture said on Friday that Mexico had agreed to supply 250 million cubic meters of water starting next week and to work toward closing the shortfall.
Agriculture Secretary Brooke Rollins, quoted in the statement, said Mexico delivered more water in a single year than it had over the previous four years combined.
Trump has said that if Mexico continues to fall short of its obligations, the United States reserves the right to impose 5% tariffs on imported Mexican products.
Mexico’s Deputy Foreign Minister for North America, Roberto Velasco, said that a severe drought in 2022 and 2023prevented the country from meeting its commitments.
International
Several people shot in attack on Brown University campus
Several people were shot on Saturday in an attack on the campus of Brown University, in the northeastern United States, local police reported.
“Shelter in place and avoid the area until further notice,” the Providence Police Department urged in a post on X. Brown University is located in Providence, the capital of the state of Rhode Island.
U.S. President Donald Trump said on his social media platform Truth Social that he had been briefed on the situation and that the FBI was on the scene.
At 5:52 p.m. local time (11:52 p.m. GMT), Brown University said the situation was still “ongoing” and instructed students to remain sheltered until further notice.
After initially stating that the suspect had been taken into custody, Trump later posted a second message clarifying that local police had walked back that information. “The suspect has NOT been apprehended,” the U.S. president said.
International
Colombia says it would not reject Maduro asylum request as regional tensions escalate
The Colombian government stated on Thursday that it would have no reason to reject a potential asylum request from Venezuelan President Nicolás Maduro should he leave office, as regional tensions persist over the deployment of U.S. military forces in the Caribbean since August.
“In the current climate of tension, negotiations are necessary, and if the United States demands a transition or political change, that is something to be assessed. If such a transition results in him (Maduro) needing to live elsewhere or seek protection, Colombia would have no reason to deny it,” said Colombian Foreign Minister Rosa Villavicencio in an interview with Caracol Radio.
However, Villavicencio noted that it is unlikely Maduro would choose Colombia as a refuge. “I believe he would opt for someplace more distant and calmer,” she added.
Colombian President Gustavo Petro also commented on Venezuela’s situation on Wednesday, arguing that the country needs a “democratic revolution” rather than “inefficient repression.” His remarks followed the recent detention and passport cancellation of Cardinal Baltazar Porras at the Caracas airport.
“The Maduro government must understand that responding to external aggression requires more than military preparations; it requires a democratic revolution. A country is defended with more democracy, not more inefficient repression,” Petro wrote on X (formerly Twitter), in a rare public criticism of the Venezuelan leader.
Petro also called for a general amnesty for political opponents and reiterated his call for forming a broad transitional government to address Venezuela’s prolonged crisis.
Since September, U.S. military forces have destroyed more than 20 vessels allegedly carrying drugs in Caribbean and Pacific waters near Venezuela and Colombia, resulting in over 80 deaths.
U.S. President Donald Trump has repeatedly warned that attacks “inside Venezuela” will begin “soon,” while Maduro has urged Venezuelans to prepare for what he describes as an impending external aggression.
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