The U.S. and Cuba could finally seize the vast missed opportunity of shared prosperity
Editor’s note: This is the latest in our Emerging Voices series featuring work by new writers. -Barclay Palmer
On our 4th day without steady electricity or water in Havana, I dip a cup into a bucket of water and rinse myself off in the dark. Through the bathroom window, the only light in the city glows from a hospital — and from foreign hotels. People haven’t been able to buy food at state stores as credit card readers went dead; withdraw cash from the bank, where the lines are three hours on a good day; or draw water from the faucets.
On Friday morning, Cuba’s largest power plant failed, causing an island-wide black out. The night before, Prime Minister Manuel Marrero Cruz had addressed the nation to explain increasingly frequesnt blackouts in Havana and the provinces, citing lack of petroleum, increased energy demand from private and residential sectors, and plant maintenance needs. While the specific reason for the subsequent failure has not been released, the rumor on the streets is that the use of domestically-extracted crude petroleum rather than more refined but less available fuel has degraded or even broken pipes and machinery. In recent years, reductions in petroleum imports from Venezuela have forced Cuba to burn its own crude in plants not designed to process it.
In Havana, a city that has weathered extreme scarcity, capitalist booms and revolutionary shocks, people remain characteristically calm. An incredible solidarity knits Havana together. Neighbors share rice and workers making below a living wage still give pesos to the elderly on the street. Lack of electricity is nothing new; programmed blackouts have kept the city supplied with relatively consistent power for years, at the expense of the countryside, which often suffers blackouts for 10 to 12 hours a day. What is new is the fact that this latest failure at the Antonio Guiteras plant in Matanzas, Cuba’s largest power plant, took out power across the entire country.
Some would say: Serves those communists right.
But in a country that has been forced to depend on foreign investment because of its geography, a history of perilous market concentration in one product (sugar) and one primary trade partner (Spain, then the U.S. or Russia) and the U.S.’s economic and military wall around it, assigning a reason for the current crisis is not so simple.
“A great gap between energy supply and demand remains. That signals opportunity”
I came to Cuba to figure out if the economic crisis is due to its authoritarian socialist government or due to the U.S. embargo since 1960. What I’ve found is that the cause is both. As Irma Adelman, Professor of Economics at UCLA Berkeley and Nobel Prize nominee, wrote in her 2001 paper Fallacies in Development Theory and Their Implications for Policy, thinking of underdevelopment in terms of a “single-cause theory” is “fundamentally misguided because it is based on a simplistic view of the mechanism of development and of the system in which it takes place.” There is no one single factor that determines how a country develops. Every economic situation is context-dependent, and every factor is one of multiple.
One factor is undeniable: The impact of fossil fuels on Cuba’s infrastructure. Just days ago, global warming caused by the burning of fossil fuels sent Hurricanes Helene and Milton surging up over the breakwaters and blanketing Havana in rain. I walked to university class in knee-deep water, hoping to not step in deeper holes hidden beneath the muddy swirling eddies. The science shows that burning fossil fuels has increased extreme weather events, destroying harvests and homes, and making Cuba increasingly dependent on importing goods with money it doesn’t have.
Burning more petroleum will not lift the island out of this downward spiral.
The crises that result when outdated infrastructure is overwhelmed by rising demand and increased extreme weather are expected to rise dramatically – not just in Cuba, but around the world, including the U.S.
How can we prevent such human and economic suffering?
As in most of the Global South, sunshine is plentiful in Cuba – solar power could be, too. But for developing nations like Cuba, a renewable transition is not possible without the foreign investment. China has shipped solar panels to the island, but a great gap between energy supply and demand remains. That signals opportunity.
The most logical source of investment – with the greatest potential returns for both countries – is the U.S. Just 90 miles, the U.S. has the proximity, innovation and economic resources to pioneer renewable energy solutions in a potentially substantial economic and strategic partner. Cuba has a highly educated population, thanks to free education, and a 99.67% literacy rate – higher than that of the U.S. The flourishing Cuban population in Miami maintains strong ties with family on the island. Robust economic activity between the nations could generate revenue and growth for the people, companies and economies of both countries.
Cuba’s energy crisis offers a warning – and a solution
A key barrier is the U.S. embargo, imposed in 1960 after Fidel Castro’s revolutionary government nationalized American companies operating in Cuba. In 1982, then-President Ronald Reagan added Cuba to the State Sponsor of Terrorism list, allowing the U.S. to sanction other countries for doing business with Cuba and penalizing foreign banks for issuing loans that would enable Cuba to import goods, including scarce food and medicine.
During President Obama’s presidency, the embargo was partially lifted, and Cuba’s fledgling private sector boomed. By contrast, the prolonged combination of Cuba’s authoritarian control and the U.S. embargo have been blamed for causing human and economic suffering rather than bringing regime change or economic growth to both nations. The Cuban government has refused to release political prisoners, and the Biden administration, other than allowing for some “U-turn” bank payments, has largely kept in place the harsh trade restrictions reinstated by former President Trump. This four-day, nationwide blackout is seen as the latest result of the conflict and paralysis.
Ironically, however, Cuba’s energy crisis today provides a warning to all countries, including the U.S., of the dangers of ignoring aging infrastructure and resource scarcity – as well as a potential roadmap for preventing such crises.
If the US wants to encourage entrepreneurship, innovation, political freedom and sustainable growth in Cuba, and if the Cuban government wants to foster energy security, economic growth and prosperity, both governments could take steps toward ending the embargo. In his speech on Thursday night, Prime Minister Marrero Cruz indicated that a long-term response to the energy crisis will include facilitating the purchase of solar systems for the private and residential sector. If Cuba and the U.S. could transition from embargo to economic cooperation, the U.S.’s rapidly growing range of energy innovations – solar, storage, geothermal, biofuels and potentially others, such as hydrogen – could help Cuba as a new economic partner grow dramatically.
50 ways to attract investment – and foster democracy
Cooperation could also prompt investment into other critical infrastructure, such as transportation, electronic banking, digital communications, and flood mitigation, sparking substantial economic growth in both countries. That growth could be predicated on – and also facilitate – a shift toward Cuba fostering private ownership, democratic values and freedom of speech, including the right to peacefully dissent. It could allow the U.S. to empower the strengthening of democratic values and while respecting Cuban sovereignty.
The current energy, economic and humanitarian crisis in Cuba can seem intractable. But as history has so often shown – especially in the U.S. – we know the solutions, and concerted effort can make them happen – in this case, lifting the embargo and accelerating the renewable transition. By prompting the development of abundant and secure energy supplies, economic growth, democratic flourishing, in the US just as much as in Cuba, we can set the stage for sustainable relations and a healthy society that can weather the challenging years to come.
