The Economy of Cuba
Soviet Subsidies and the Special Period
Cuba relied on cheap Soviet oil and guaranteed sugar sales, and when the USSR collapsed in 1991, output fell by about a third, leading to the Special Period.
A supporting pillar collapsed.
Dependence
The USSR bought Cuban sugar at high prices and supplied oil at low prices.
Collapse
After 1991, imports and GDP plummeted, and blackouts and food shortages spread.
Response
Cuba legalised the US dollar, opened to tourism and allowed some private activity.
Legacy
Shortages and improvisation became part of daily life.
A bicycle city
Imported Chinese bicycles replaced cars as fuel became scarce.
Assuming the Special Period ended after a few years
Its effects lasted a long time.
Key takeaways
- The USSR subsidised Cuba.
- Its collapse cut GDP by a third.
- Dollars and tourism were allowed.
- Scarcity continued.
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