A Latin American country of ten million people, already in steep economic decline, moves into acute crisis as its entire electrical network shuts down. The U.S. government moves quickly to help stabilize the situation. The National Security Council convenes the full range of agencies to craft a response. The result: the State Department directs our ambassador to assure the country’s leadership of our ongoing support. The Energy Department sends a team to survey its power system and see what short-term fixes can be found. The Defense Department orders one of its hospital ships to the area to assist the collapsed healthcare system.

The Treasury Department reaches out to the World Bank and the Inter-American Development Bank to see how financing for vital petroleum imports can be found. The Commerce Department mounts missions for the private sector to survey the range of opportunities for the trade and investment that the country desperately needs. Finally, the Agency for International Development brings its expertise to bear on different sectors that require assistance.

That is unless the country is Cuba. In the face of the collapse of its electrical system and the underlying economic decay, the White House has confined itself to stating that it is “monitoring” the situation. It is “concerned” about the humanitarian impact while stressing that the fault lies with the Cuban government’s “long-term mismanagement of its economic policy and resources” and pointedly noting that Havana has not requested any assistance thus far. 

Behind the Blackout, an Economy in Crisis

The immediate reasons for the collapse of Cuba’s power grid lie in its aging, Soviet-built generation plants, which have suffered from chronic under-investment despite the more recent installation of some Spanish and Chinese equipment. Cubans also rely on imported oil. However, Venezuela, a major supplier at concessional rates, has been providing ever less in the face of its own problems. Mexico has apparently taken up some of the slack in transactions, which may also be below market prices, and some Russian oil has been provided. Evidently, not enough is reaching Cuban plants, and the country lacks the foreign exchange to go onto the spot market. 

We can expect that Cuba will be able to bring its grid back online after a fashion. Spare parts will be scrounged. Suppliers of cheap oil may provide a bit more. But at best, the system will function in the same spotty manner as it did before its complete collapse. Yet, behind the shortage of money and fuel for its electrical system is an economy incapable of providing necessary resources to its people. It remains trapped in a nether world between the communist system installed after the revolution and the only partially realized market-based reforms. The latter have stalled in the face of the regime’s fear of summoning social tensions that could ultimately threaten its hold on power.

The collapse of its electrical grid reflects the contradictions of Cuba today. The traditional mainstay of its state-run agricultural economy, sugar production, has almost disappeared as a result of mismanagement and under-investment. Tourism, the great hope for an economic alternative, saw significant European investment. Still, demand seems sluggish, with Cuba doing worse than regional competitors in the post-COVID environment (and indeed, the current electrical crisis will discourage future travelers).

Cuba undeniably suffers from the U.S. economic embargo. However, the extent of its impact is hard to calculate (and the official Cuban estimate of over $144 billion in costs since its inception obviously comes from an interested party). At the same time, Cuba has historically benefited from the flow of remittances (although this seems to be dropping as Cubans living abroad instead dedicate resources to resettling relatives emigrating from Cuba). Indeed, as the regime flounders, 10 percent of the population has left the island, according to official figures.

Once a Global Player

This somber picture in which a broken-down Cuba is left at the margin of global developments is remarkable when one remembers how large it once loomed on the chessboard of the Cold War. While there is room for debate as to whether the initial American response under Dwight Eisenhower to Castro’s triumph was too heavy-handed, ultimately, the two countries became locked into permanent confrontation as Fidel Castro (who reportedly had links to the Soviet Union well before he came to power) decisively aligned his country with America’s adversary.

Then, as the Kennedy administration looked to “support any friend, oppose any foe,” Cuba became an international flashpoint, first with the abortive 1961 Bay of Pigs invasion and then the truly dangerous missile crisis of 1962. The resolution of the latter between the United States and the Soviet Union stabilized Cuba’s position as an irritant rather than an existential threat to the United States.

Castro, his survival assured, looked to export communist revolutions throughout Latin America in the 1960s. His acolytes saw the Andes Mountains as analogous to Cuba’s Sierra Maestra, the birthplace of his movement. This effort largely failed, most notably with the 1967 death of Che Guevara in Bolivia. U.S.-backed anti-communist governments suppressed other guerrilla movements. 

However, Cuba was able to carve out a more prominent international position in the late 1970s and into the 1980s. Castro aggressively supported Marxist movements and governments in Africa, most notably in Angola, where he was able to project power successfully 7000 miles away. But Cuba’s most important theater of action was Central America, where it provided support to the Sandinista National Liberation Front in Nicaragua and the Farabundo Martí National Liberation Front in El Salvador.

In Nicaragua, Cuba thus had what it had long sought: a friendly fellow revolutionary government in Latin America. And its successes both there and in Africa (with Soviet backing, of course) were impressive achievements for the government of a small country under constant economic pressure. However, this period was the high water mark of Cuba’s achievements, as the Reagan administration returned to Kennedy’s commitment to “support any friend, oppose any foe.” Then, Cuba’s great patron, the Soviet Union, collapsed in 1991.

It was not until 1999, with the triumph of Hugo Chávez in Venezuela (a far larger and richer country than Nicaragua), that Cuba gained an important new ally, becoming a vital member of the ramshackle, but in some ways effective “Bolivarian Alliance for the Americas,” (ALBA) which had as its core Venezuela, Cuba and Nicaragua (with the Sandinistas back after a sixteen-year lapse). As Chávez sought to remake Venezuela in the image of “twenty-first-century socialism,” Cuban security and intelligence support, both for his inner circle of personal protection and for assuring the loyalty of Venezuela’s military, was vital.

It’s Good to Have Friends…

Throughout its history (at least until its recent travails), the Cuban regime’s ability to survive and even to act outside its borders owed much to its success in attracting massive foreign assistance, first from the Soviet Union and then from Venezuela. Its support of Marxist movements, from the early 1960s into the 1980s, came as the Soviets provided large subsidies to Cuba’s economy by providing oil at below-market prices and, in turn, buying Cuban sugar above them.

This process culminated in Cuba’s integration into the Council for Mutual Economic Assistance (COMECON), the economic counterpart to the Warsaw Pact. While its long period of close connection with the communist bloc had included some stretches of real economic growth in Cuba, it all came to a crashing end with the fall of the Soviet Union, leading to the “special period in peacetime” of extended economic crisis.

The “special period” forced Cuba into harsh austerity and partial economic liberalization. Still, it then received a lifeline in the form of Chávez’s largesse, which was made possible by the rise in global oil prices after 1999. In a rough approximation of Cuba’s earlier relations with the Soviets, Venezuela provided subsidized oil and, in turn, obtained the services of Cuban doctors for its public health programs and also allowed Cuba to act as a middleman for the purchase of foodstuffs for its network of government-run stores for its low-income population.

…Until They Can’t Help

But this process has been unwound as Venezuela has faced its own economic crisis; its corrupt, politically managed petroleum sector now produces far less than it did at its height, and what it does produce is needed to provide some semblance of the previous subsidization of its restive population. Its deliveries of cheap oil have been on a downward trend, contributing to the blackout in Cuba. However, the value of Cuba’s intelligence capabilities, as well as ideological affinity, may lead Venezuela to provide at least some further relief, even at the expense of its own population.

And it does not look like any other country is likely to resume the support that would provide sustained relief for Cuba’s economy. Russia, the successor to the Soviet Union, retains a political and security relationship with Cuba and welcomes the opportunity to make mischief for the United States, as when it recently sent naval vessels for a port call in Havana. But it is dealing with the enormous costs of its war with Ukraine, as well as sanctions that target its hydrocarbons sector. Like Venezuela, it may be able to ship some more oil for Cuba, but it is in no position to assume the massive costs of re-creating Cuba as a true client state.