Cuba is going through a structural crisis characterized by the complete loss of its ability to create productive linkages, a result of a deep deindustrialization that has left the country without key inputs, functional infrastructure, and a real recovery program.
Thus analyzed the Cuban economist Pedro Monreal in his profile on Facebook. The State as such, following the recent publication of the chapter “Manufacturing Industry” from the Statistical Yearbook of Cuba 2024, by the National Office of Statistics and Information (ONEI).
“With an intermediary goods industry in ruins and a 'vanished' capital goods industry, Cuba has lost the real capacity to generate the productive linkages required for the development process. It doesn't matter what the official propaganda says,” emphasized Monreal.
He also mentioned that the erosion of the industrial base "reflects the crisis stemming from the breakdown of the Soviet-era integration model, which led to the decapitalization and technological obsolescence of a significant portion of the industrial facilities, a process that worsened after the 'reorganization'."
The data confirms that the national industry, once regarded as the "backbone" of development, has been reduced to ruins.
The expert recalled that the industrial physical index in 2024 was lower than it was 35 years ago, even below the levels recorded during the "bottom" of the Special Period. The decline has been steady and shows no signs of reversing.
"While the government continues to speak about 'recovering unused industrial capacities,' the reality is much grimmer because material obsolescence ('old irons') and technological obsolescence (substandard performance) would require multimillion-dollar investments," he argued.
One of the most severe cases is the sugar industry. Once a symbol of pride and an economic engine, it has turned into a productive graveyard “as a result of the greatest blunder in industrial policy in the history of Cuba,” stated Monreal, referring to Tarea Álvaro Reinoso, initiated by Fidel Castro in 2002, which led to the dismantling of 120 of the 165 sugar mills that were operating at that time.
Ignored warnings, imposed decisions, and systematic dismantling have led to a situation where today Cuba, a country historically known for sugar production, relies on imports to meet its needs. It was not an inevitable fall; it was a policy executed with complete disregard for its consequences.
The problem is not limited to the sugar industry. Erosion also affects sectors such as intermediate and capital goods, making it impossible to generate linkages between productive branches.
The same is true for the obsolete electrical infrastructure and the lack of investments that keep the island in a severe energy crisis, with prolonged blackouts affecting daily life and paralyzing its already struggling economic activity.
The disappearance of the fertilizer industry has severely impacted agriculture, which, in turn, by not producing raw materials, hampers the functioning of what little remains of the food industry. The country has been left without its own productive base.
The specialist pointed out that the data is compelling: the food industry today produces barely a quarter of what it was generating in 1989. The collapse is total and twofold: what the industry does not produce is missing in the field, and what the field does not produce is missing in the factories. It is a broken cycle that reflects the fracture of the entire productive model.
Despite this situation, there is no serious plan to reverse it. “The absence of a credible reindustrialization program is one of the most notable and alarming gaps in Cuba's economic policy. The industry doesn't even have something comparable to the fig leaf of the 63 (ineffective) measures for agriculture,” he emphasized.
Other economists have analyzed that part of the disaster stems from the blind bet on tourism as the sole “economic engine”. The sudden transformation of the productive matrix in the 1990s redirected investments towards a service sector unable to sustain the national economy.
This is complemented by the priority given to the construction of luxury hotels, the importation of all supplies, and the gradual abandonment of actual production. This comes at a time when, according to data from ONEI, the hotel occupancy rate fell to just 24.1% in the first quarter of 2025, and the number of tourists dropped by 29.3% year-on-year. Tourism revenue also plummeted by 21.5%.
Meanwhile, a centralized structure is maintained, without business autonomy or the flexibility to recover key sectors. Decisions continue to be made from a logic of control, not development. And those who should be stopping the decline, applaud it from their platforms.
The most serious consequence of this entire process is not just the loss of jobs or the decline in GDP. It is the impossibility of Cuba rising from within. Without a strong industry, without connections between sectors, and without productive sovereignty, development is not possible. That is the reality that no slogan can hide.
Frequently Asked Questions about the Industrial and Economic Crisis in Cuba
What is the current state of the industry in Cuba and its main issues?
The Cuban industry is in a critical state of deindustrialization, with severely eroded productive capacity. The lack of inputs, technological obsolescence, and loss of capital have left the country without a solid productive base. The sugar industry, which was once an economic pillar, has collapsed due to misguided political decisions, such as the Álvaro Reinoso Task, and Cuba currently relies on imports to meet its needs.
What impact does deindustrialization have on the Cuban economy?
Deindustrialization has caused a productive collapse in Cuba, hindering the creation of essential production chains for economic development. The lack of a solid industry affects sectors such as agriculture and food production, making self-sufficiency and food sovereignty difficult. Furthermore, economic centralization and the lack of investment in key sectors have perpetuated a structural crisis that restricts economic growth.
Why hasn't the focus on tourism managed to reactivate the Cuban economy?
The bet on tourism as the main economic driver has been ineffective due to the low hotel occupancy rate and the decrease in the number of tourists. Despite significant investments in hotels and resort complexes, the sector has not generated the expected revenues nor compensated for the decline of other industries. This strategy has led to the undercapitalization of fundamental sectors such as agriculture and manufacturing, exacerbating the economic crisis.
Are there plans or measures to reindustrialize Cuba?
There is no credible reindustrialization plan in Cuba, according to economist Pedro Monreal. Despite official rhetoric regarding the need for reforms, concrete actions have not been taken to revitalize the industry. The approach remains centralized and controlled, providing no room for business autonomy or the stimulation of productive sectors. The absence of an effective reindustrialization program is one of the most concerning gaps in Cuban economic policy.
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