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20 February 2025 – The economic crisis in Cuba has reached a critical point with the collapse of remittances, the partial dollarization of the economy and new restrictive measures against micro, small, and medium enterprises (MSMEs) and self-employed workers (TCP), according to a recent report by Cuba Siglo 21.

Remittances, the government’s main source of foreign exchange earnings, fell 43% in 2024 compared to the previous year and 70% compared to 2019. Despite the massive exodus of Cubans in recent years, the amount of money sent to the island continues to plummet, reflecting a growing trend: exiles prioritize family reunification outside Cuba rather than continuing to support the regime’s economy.

The report notes that GAESA, the military conglomerate that controls much of the Cuban economy, has seen its revenues reduced and has responded with an aggressive strategy to regain control of the dollarized retail market. Measures imposed on MSMEs and TCPs include price ceilings, tax increases, import restrictions and the creation of the National Institute of Non-State Economic Actors (INAENE) with legal power to confiscate private entrepreneurs.

“The regime has lost control of the flow of remittances and the dollarized retail market. Its response is an offensive against the private sector to restore GAESA’s hegemony,” says Emilio Morales, author of the report.

Added to this is the policy of “partial dollarization of the economy”, a measure which, far from solving the crisis, seeks to financially prop up GAESA. However, the lack of confidence in the state banking system has led to 92.68% of remittances entering the country through informal channels, further weakening the regime’s finances. In essence, GAESA’s multimillion-dollar business with remittances was reduced to $81.6 million dollars that it received directly in 2024.

The report warns that this situation could trigger a new social outburst in Cuba, given the growing citizen discontent with the food and medicine crisis, blackouts and repression. As a solution, it proposes to completely free the productive forces, allow private direct investment -including that of Cuban exiles- and dismantle GAESA’s monopoly.

For more information, see the full report “The Hidden Cause of GAESA’s Offensive against MSMEs and self-employed workers“.