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
Armed forces target illegal mines in Northern Ecuador with bombing raids
Ecuador’s Armed Forces carried out an operation on Monday — including airstrikes — against illegal mining in the town of Buenos Aires, in the country’s north, Defense Minister Gian Carlo Loffredo reported.
The mountainous, gold-rich area has been a hotspot for illegal mining since 2017, located in the Andean province of Imbabura.
In 2019, former president Lenín Moreno deployed around 2,400 soldiers to the region in an attempt to curb the illegal activity. “The operation began with mortar fire, followed by gunfire and bombing runs by Supertucano aircraft,” Loffredo said in a video released by the Defense Ministry.
He added that the operation would continue on Tuesday with patrols across the area to locate possible members of “irregular armed groups that may have crossed from the Colombian border.”
The Armed Forces stated on X that the intervention focused on the “complete elimination of multiple illegal mining tunnels” in the areas known as Mina Nueva and Mina Vieja.
The operation coincided with the deployment of a military and police convoy into Imbabura, which has been the epicenter of protests against President Daniel Noboa since September 22, following his decision to scrap the diesel subsidy.
International
Caracas shuts embassy in Oslo without explanation following Machado’s Nobel win
Venezuela has announced the closure of its embassy in Norway, just days after opposition leader María Corina Machado was awarded the Nobel Peace Prize. The Norwegian Ministry of Foreign Affairs said the Venezuelan diplomatic mission provided no explanation for its decision on Monday.
“It is regrettable,” a ministry spokesperson said. “Despite our differences on several issues, Norway wishes to keep the dialogue with Venezuela open and will continue to work in that direction.” The ministry also emphasized that the Nobel Committee operates entirely independently from the Norwegian government.
In its announcement, the Nobel Committee stated that Machado met the criteria established by Alfred Nobel, “embodying the hope for a different future, where the fundamental rights of Venezuelans are heard.”
International
Sheinbaum: Urgent to restore access to towns cut off by heavy rains
Thousands of military personnel and civilians in Mexico worked tirelessly on Tuesday to clear roads blocked by the torrential rains of recent days, which have left more than 300 communities cut off across central and eastern regions of the country. Authorities also launched mass fumigation efforts in several affected areas to prevent the spread of dengue fever.
The official death toll remains at 64, though dozens of people are still missing. President Claudia Sheinbaumacknowledged that the government does not yet know the full situation in many of the isolated villages, which range in population from 500 to 1,000 inhabitants.
“The reopening of roads is one of the greatest urgencies,” Sheinbaum said. “It’s essential to guarantee air bridges, food supplies, clean water, and a proper census of the isolated communities so we can determine the condition of every person living there.”
Private construction companies are also assisting the effort with heavy machinery and technical support to help reopen highways and reconnect rural areas.
Armed forces target illegal mines in Northern Ecuador with bombing raids
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