Can Cuba turn its economy around?

Summary

Business Daily (BBC World Service) – March 23, 2026

Episode Summary: Can Cuba Turn Its Economy Around?

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Main Theme

This episode investigates Cuba’s escalating economic crisis, spotlighting severe energy shortages, the impact of US sanctions, mass emigration, and prospects for reform. Host Will Bain brings insight from Cuban residents, energy experts, former US diplomats, and policy analysts to answer the core question: Can Cuba implement meaningful reforms to prevent economic collapse, and what role does the US play in its future?

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Key Discussion Points & Insights

1. Life Amid Crisis: Energy, Food, and Uncertainty

• Chronic blackouts now last up to 36 hours, causing food spoilage and disrupting daily life.
• Residents describe a reality where “everything is in the dark, all night” and schools/hospitals shut down due to lack of power.
  • Quote:
    • "It will be two or three days without electricity and what little we have to eat spoils. And nobody has answers for anything."
      — Cuban Resident 1 [01:32, 03:11]
    • “I eat in the dark, I have breakfast in the dark, I shower in the dark. Always everything in the dark, all night. What else can I say?”
      — Cuban Resident 2 [03:23]

2. Roots of the Crisis: Sanctions and Structural Decay

• The crisis has deepened recently due to a near-total cutoff in oil imports, attributed to US sanctions and physical blockades—the result: long periods without electricity, food, and medicines (see [04:36–04:59]).
• Cuban President Miguel Diaz-Canel admits:
  • "No fuel has entered the country for three months... diesel runs out and fuel oil runs out. Therefore, a considerable number of megawatts that we were generating, especially for peak hours and nighttime hours, drop out of that generation system and put the system in a situation of great instability."
    [04:59]

3. Long-term Failings: Energy System Breakdown

• Jorge Pinon (University of Texas, former oil executive) explains that the crisis is rooted in decades of underinvestment and outdated infrastructure:
  • The majority of power stations are “over 45 years old, all Russian and Czechoslovakian equipment, very little capital improvement” and rely on corrosive domestic crude.
  • “The electric power sector is a structural problem… their main suppliers, historically, which have been Venezuela, Mexico and Russia, are no longer there. So now they have an oil shortage crisis in their hands.”
    [06:25, 08:11]
• Cuba’s efforts with renewables (solar and biomass) are “drops in the bucket,” hampered by neglect and diminished sugar production.

4. The Humanitarian Toll and Emigration

• Record numbers of Cubans are leaving.
  • Maria Jose Espinoza (Center for Engagement and Advocacy in the Americas):
    • “Between 2022 and 2025, more than 500,000 migrants have arrived [in the US]. …Cuba has seen a migration of 2.5 million since 2022. That means that Cuba generated roughly 5.3 asylum claims per 1,000 inhabitants.”
      [16:56]

5. International Dynamics: US Policy and Sanctions

• Former US diplomat John Caulfield and Secretary of State Rubio outline a policy shift: the US now demands economic reform as a condition for easing sanctions, no longer insisting on political revolution first.

  • "Everyone seems to be in agreement. Major economic changes are needed… Cuba needs to change economically first. We want to see political change in Cuba in the future, but it doesn’t have to be now… " — John Caulfield [11:48]
  • “Cuba needs to change dramatically because it is the only chance that it has to improve the quality of life for its people. 15% of the people of Cuba have left since 2021. That is not a system that's working.” — Secretary of State Rubio [12:16]

• US policy includes financial isolation, physical interdiction of oil supplies, and discouragement of outside investment or aid to Cuba.

  • “Where the US intervention has been significant, it has dissuaded Mexico from sending free oil to Cuba … probably are avoiding doing so, such as Colombia or Brazil.” — John Caulfield [13:53]

6. Can Reform Save Cuba? Investors’ Reluctance and Skepticism

• Recent government announcements about opening the economy are met with skepticism.
  • “It's been sort of the official speech for the past decade, but it hasn't been put in practice through actual meaningful reforms. …it feels like too little, too late.” — Maria Jose Espinoza [17:50]
• Obstacles to foreign investment cited:
  • "No clear investment rules…You're not going to have a major oil company... coming to a country in which long term stability, political stability and economic stability are transparent and clear." — Jorge Pinon [15:41]
• Internal reforms alone are seen as insufficient:
  • “It's not going to be enough by implementing internal reforms, if some external factors also don't change. …How is the country going to attract foreign investment, given the lack of infrastructure, the access of the private sector to markets and inputs, the extreme heavy bureaucracy and regulatory uncertainty…?” — Maria Jose Espinoza [17:50]
• Comparative example: Vietnam successfully transformed its economy through a similar moment of crisis, but Cuba is hampered by deeper internal and external obstacles.

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Notable Quotes & Memorable Moments

On Energy Desperation:

• “March was what we call zero option. In other words, they will literally run out of oil sometime in the next two or three weeks.”
  — Jorge Pinon [07:16]

On US Policy:

• “We want a dramatic opening of the Cuban economy, opening to the private sector and to not have the state impede economic development in Cuba.”
  — John Caulfield [15:04]

On Skepticism and Danger of Inaction:

• "If we don't see a solution by the Cuban government and by the US Government, we are going to see a humanitarian collapse of the island in the next year."
  — Maria Jose Espinoza [19:25]

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Timestamps for Key Segments

• [01:18–03:33] — First-hand accounts of daily life during the crisis, energy blackouts, and social unrest.
• [03:49–04:36] — Maria Jose Espinoza contextualizes the human impact and economic hardship.
• [04:36–07:47] — Energy shortage deep-dive: causes, blockade, reliance on aging infrastructure (Jorge Pinon, Miguel Diaz-Canel).
• [10:48–11:48] — Transition to foreign and US perspectives; introduction of US political stance.
• [11:48–13:03] — John Caulfield and policy analysis: “change must be economic before political.”
• [16:45–17:44] — Mass emigration statistics and unprecedented exodus discussion.
• [17:50–19:39] — Critique of Cuban reforms, challenges to investment, warning of imminent humanitarian collapse.

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Conclusion

The episode paints a bleak but clear picture: Cuba's economic malaise is not new, but it is now acute, and only deep, genuine reform—both internal and enabled externally—may stave off disaster. Skepticism pervades both within Cuba and among external actors about the will or ability of the government to implement real change before collapse becomes unavoidable.

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For further context or to listen to the episode in full, visit BBC Business Daily.

Transcript

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[Will Bain]

Hello and welcome to Business Daily on the BBC World Service. I'm Will Bain. Today, Cuba has been mired in economic crisis for years, but many now fear the island's economy is on the brink of complete collapse.

[Cuban Resident 1]

It will be two or three days without electricity and what little we have to eat spoils. And nobody has answers for anything.

[Will Bain]

And today we'll hear a warning more pressure could still be to come.

[Jorge Pinon]

We estimated about two or three months ago that March was what we call zero option. In other words, they will literally run out of oil sometime in the next two or three weeks.

[Will Bain]

In response, the Communist government says it will open up the economy to more private investment. But many are still skeptical.

[Maria Jose Espinoza]

At this point, when you hear the president talking about changes needed, you ask yourself, okay, what are the practical steps that you're taking? Because it feels like too little too late.

[Will Bain]

So today on Business Daily, can Cuba make the economic reforms needed to turn its economy around? A fire is raging in what turns out to be the ruling Communist Party of Cuba's offices in the central city of Moron. Black smoke billows into the night sky as protesters lit up by the flames in the social media video hurl rocks and bottles at the building. Someone is seen waving a Cuban flag and you can make out a cry of freedom in the background. The protests came as Cubans endure increasingly long periods of energy blackouts, food shortages, as well as shortages of key medicines.

[Narrator/Voiceover]

Since last night, it has been 24 hours without electricity. On some days, we have gone without for 17 hours. Depending on how the connection to the system is and how the systems are

[Cuban Resident 1]

doing, it will be two or three days without electricity. And what little we have to eat spoils. Nobody says anything and nobody has answers for anything.

[Cuban Resident 2]

We can't do anything. I eat in the dark, I have breakfast in the dark, I shower in the dark. Always everything in the dark, all night. What else can I say?

[Will Bain]

Maria Jose Espinoza is the Cuban born executive director at the center for Engagement and Advocacy in the Americas, a non profit strategy organization based in Washington D.C. she told us more about what the picture was like across the country right now.

[Maria Jose Espinoza]

I mean, imagine that you wake up in the morning, you haven't had electricity for 36 hours in a row. That probably means that your fluid is spoiling and then you need to feed your family and then you need to send them to school. But some of the schools are shuttered because of the energy shortages. You can get to a hospital and you might not have the care that is needed. You might have a family member that has, let's say, diabetes and you won't have access to insulin or let's say your state salary, it's around $20, $30 a month. That is not sufficient for you to get your basic needs. So it's becoming this point where people are desperate.

[Will Bain]

And that situation has been exacerbated in recent months by a virtual blockade of energy into Cuba, whether through sanctions or physically stopping tankers at sea. It's been imposed by the United States, as the Cuban President Miguel Diaz Canel addressed in a recent press conference covered and translated by the Reute news agency.

[Miguel Diaz Canel]

No fuel has entered the country for three months. Therefore we are generating electricity during daytime hours with domestic crude in our thermoelectric plants. Three months without any incoming fuel, diesel runs out and fuel oil runs out. Therefore, a considerable number of megawatts that we were generating, especially for peak hours and nighttime hours, drop out of that generation system and put the system in a situation of great instability.

[Will Bain]

However, for longtime oil executive Jorge Pinon, the recent blockade is merely intensifying long term issues that have plagued the Cuban energy system.

[Jorge Pinon]

The main point that we do want to point out is that there is no short term solution. This is a crisis that's been developing over the last five or ten years and again now because of the literal blockade of liquid fuels of gasoline and diesel and so on, has come now to a crisis.

[Will Bain]

Mr. Pinon came to the United States as a 12 year old boy along with roughly 14,000 other unaccompanied children who fled Cuba in the aftermath of Fidel Castro's communist revolution in an exodus known in 1959 as Operation Peter Pan. He went on to forge a career with many of the biggest oil companies on the planet, including Shell and Amoco Oil, and is now at the University of Texas in Austin's energy.

[Jorge Pinon]

There are two main sectors that we have to address as far as Cuba's energy challenges are one is electric power generation, and the other one is Cuba's oil supply, demand, balance. Those are the two critical issues Cuba is facing or that Cuba has actually faced for the last five or 10 years. But now they have both come to a crisis situation. The electric power system, because at least 50% of its generating capacity is down, producing long hours of blackouts throughout the island. And oil supply balance, because Cuba has very little domestic production. And their main suppliers, historically, which have been Venezuela, Mexico and Russia, are no longer there. So now they have an oil shortage crisis in their hands.

[Will Bain]

And you guys have been tracking that. How acute is that crisis?

[Jorge Pinon]

The last import that Cuba received was on the 9th of January. It was a small tanker with 85,000 barrels of oil from Mexico. So since the first week of January, Cuba has not been able to meet its deficit of about 60,000 barrels a day. We estimated about two or three months ago that March was what we call zero option. In other words, they will literally run out of oil sometime in the next two or three weeks.

[Will Bain]

And as a result, he sees no quick fix.

[Jorge Pinon]

It's something that will take maybe three to five years. And we estimate between eight to $10 billion to be able to meet national demand of both electricity and fuels. So again, it's a very long road ahead.

[Will Bain]

So actually, this crisis kind of existed before the US blockade. The US blockade has just sort of ramped it up or brought it to

[Jorge Pinon]

a finish, basically, no question about it. In other words, the electric power sector is a structural problem. The aid generating plants are over 45 years old, all Russian and Czechoslovakian equipment, very little capital improvement. They run in those thermoelectric power plants. Heavy, high, sour Cuban crude oil, which is very corrosive. So it's like a vicious circle. They fix the plants when they come down and then they run this crude. That again, is the reason for the downtime. And they have to shut down the plant again. So this is a historical situation. They have tried their best with renewables, particular with solar power, but again, it's a drop in the bucket. They're building a number of 21.8 megawatt solar parks, which again, they might contribute locally, they might contribute during peak hours during the daytime, but strategically they're not the core generating base that they need. Biomass for example. Biomass from sugarcane, huge potential. In Brazil, Sugarcane biomass generates 6% of its electric power demand. But the problem with Cuba is that last year, for the first time in its history, had to import sugar. So even biomass, which is a national product not impacted in any way, shape or form by sanctions from the US has been totally neglected.

[Will Bain]

You're listening to Business Daily on the BBC World Service.

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[Will Bain]

I'm Will Bain and today we're looking at what can be done to pull Cuba from its economic crisis.

[Donald Trump]

You know, all my life I've been hearing about the United States and Cuba. I do believe I'll be the honor of having the honor of taking Cuba. That'd be good. That's a big honor.

[Jorge Pinon]

Taking Cuba.

[Donald Trump]

Taking Cuba in some form. Yeah, taking Cuba. I mean, whether I free it, take it. Think I could do anything I want with it? You want another the truth? A very weakened nation.

[Will Bain]

President Trump speaking about the situation in Cuba recently. It introduces another important question into all this. Just what will the United States accept in terms of change to ease sanctions and restrictions on the Cuban economy? Over a three decade career in the US State Department, John Caulfield worked across Latin America, including his charged affairs at the American Embassy in Venezuela. And although the US doesn't have a formal ambassador to Cuba, Mr. Caulfield served president Obama as Chief of mission of the U.S. interests section in Havana.

[John Caulfield]

Everyone seems to be in agreement. Major economic changes are needed. What I think is the really dramatic change in US Policy is Secretary of State Rubio has said that Cuba needs to change economically first. That is the most important. We want to see political change in Cuba in the future, but it doesn't have to be nailed. It doesn't have to be a coup. And that is quite a change in U.S. policy.

[Will Bain]

Well, here is Secretary of State Rubio, a Cuban American himself, making that point.

[Secretary of State Rubio]

It needs to change, and it doesn't have to change all at once. It doesn't have to change from one day to the next. Everyone is mature and realistic here. But Cuba needs to change. It needs to change dramatically because it is the only chance that it has to improve the quality of life for its people. 15% of the people of Cuba have left since 2021. That is not a system that's working.

[Will Bain]

John Caulfield, again.

[John Caulfield]

And so I think that is positive. But the Cubans themselves have to accept the fact that for economy to change, the state has to pull back from the economy and allow private sector to operate. Until now, what private sector activity there is has been kept very small, highly regulated, and very nervous about whether they're going to be allowed to continue.

[Will Bain]

The method that the US has gone about approaching this, I mean, seems to be sparking something of a humanitarian catastrophe.

[John Caulfield]

Well, Cuba is experiencing a humanitarian catastrophe. What has aggravated in the last two months since the US Incursion in Venezuela is that Venezuela is no longer sending free oil. Now, Venezuela had diminished greatly the amount of oil that had been sent to Cuba over the years, but still it was a very, very important source. And with that oil no longer flowing, that has provoked even more severe economic crisis in Cuba.

[Will Bain]

But there's ostensibly a blockade, isn't there for anybody else, Whether it be a physical one with ships intercepting oil tankers, but also the threat of tariffs of anybody who sells there. And I just wonder from a policy perspective, is that the right approach or has that gone too far?

[John Caulfield]

It is having an impact. It has really made more intense and more immediate the economic policies of several years. But. But I think it's important to remember that until now, although the US Economic blockade had more to do with an isolation of Cuba from the world financial system, that the US Is one of the major suppliers to Cuba for example, food imports. There are no restrictions on food for medical supplies. But Cuba's problem is a lack of funds. The US Will not lend money to Cuba or allow the private sector in the US to lend money to Cuba, except for very, very short term letters of credit. And that has been an obstacle because Cuba does not have foreign exchange. Where the US intervention has been significant, it has dissuaded Mexico from sending free oil to Cuba. And other countries in Latin America that might be inclined to do so probably are avoiding doing so, such as Colombia or Brazil.

[Will Bain]

What happens next then? What do you think? Because it feels like a key question. What do you think the current American administration wants to see happen next and how would they like to see this end?

[John Caulfield]

What they've said and everything that I've heard President Trump or Secretary Rubio say indicates this is the fact, is that they want a dramatic opening of the Cuban economy, opening to the private sector and to not have the state impede economic development in Cuba. That is the major change that we're seeking.

[Will Bain]

In recent days, the Cuban government have reiterated that pledge to open up the economy, saying it will allow its nationals living abroad to invest directly. But for longtime energy executive Jorge Pinon at the University of Texas at Austin, words alone won't change much.

[Jorge Pinon]

By the way, it's a carbon copy of the same situation that the US Oil companies have with Venezuela today, which is what are the rules of investment? Cuba is a country that, for example, doesn't have transparent national account. So it'll be very, very difficult to them to apply for the World bank or the IMF or the Inter American Development bank for funding. There is no clear investment. You're not going to have a major oil company or an electric power company like Germany, Siemens or Total Energy or others coming to a country in which long term stability, political stability and economic stability are transparent and clear. What happens if tomorrow a new government in Cuba decides to change the rules of the game? Yeah, we don't see foreign investment long term. We do see foreign investment. We want to encourage foreign investment. But Cuba will have to change a centralized economic model and be more open and transparent, like Vietnam, for example. Vietnam in 1986 introduced economic reforms that transformed from an economic point of view, that country.

[Will Bain]

And it's not just foreign investors who need convincing. Cubans themselves have been leaving the country in record numbers. Maria Jose Espinoza, Executive Director at the center for Engagement and Advocacy in the

[Maria Jose Espinoza]

Americas Again, it's been unprecedented. So starting in 2022, we saw a record number of Cubans leaving the island. And it was record, meaning that the exodus between 2022 and 2025 surpassed all previous migration episodes, including the post revolution exodus, the Marielle boat lift in 1980 and the crisis in 1994. And we're talking about only to the United States. Between 2022 and 25, more than 500,000 migrants have arrived. But in general, Cuba has seen a migration of 2.5 million since 2022. That means that Cuba generated roughly 5.3 asylum claims per 1,000 inhabitants.

[Will Bain]

And she fears many people will have heard pledges about change before it is urgent.

[Maria Jose Espinoza]

Honestly, it's been sort of the official speech for the past decade, but it hasn't been put in practice through actual meaningful reforms. So at this point, when you hear the president talking about changes needed, you ask yourself, okay, what are the practical steps that you're taking? Because it feels like too little too late. They even announced a few reforms to private sector regulations, just allowed public private enterprises in a new decree low. And this has been so that the private sector has been asking an economist for years. But really it feels like it's sort of too late given where the country eats and given the external shocks. So to recover the country, to recover the economy, it's not going to be enough. By implementing internal reforms, if some external factors also don't change, how is the country going to attract foreign investment? Given the lack of infrastructure, the access of the private sector to markets and inputs, the extreme heavy bureaucracy and regulatory uncertainty that the Cuban private sector faces, how is that going to attract foreign investors? On top of that, we're still under US Sanctions, heavy sanctions that there's no doubt complicate any external relations. And we're seeing obviously on the Trump administration side this new oil embargo that is complicating the crisis. So it feels like a turning point. And my concern is that if we don't see a solution by the Cuban government and by the US Government, we are going to see a humanitarian collapse of the island in the next year.

[Will Bain]

Maria Jose Espinosa there, bringing us just about to the end of this edition of Business Daily. The producer was Craig Henderson and to never miss an episode, do subscribe to our podcast. Just search for BBC Business Daily.

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