Dismissal of Ministers in Cuba: Impact on the Economic Crisis

Dismissal of Ministers in Cuba: Impact on the Economic Crisis

According to a report from www.sueddeutsche.de, three ministers have been fired in Cuba, which is struggling economically. The Minister of Economy, Alejandro Gil, will be replaced by the previous head of the central bank, Joaquín Vázquez. The Minister of Science, Technology and Environment, Elba Pérez, and the Minister of the Food Industry, Manuel Sobrino, also have to vacate their posts. On Wednesday, an increase in fuel prices of more than 400 percent announced for the following day and the sale of fuel at certain gas stations in foreign currencies were postponed indefinitely. The government's reason was that a foreign computer virus had been detected in the sales system. The government had announced the measures around three weeks earlier to stimulate the economy and correct “distortions”. Cuba is in one of the worst economic crises since Fidel Castro's revolution in 1959. In addition to the trade embargo by its neighboring country, the USA, which has been in effect for more than 60 years, tourism collapsed during the corona pandemic and support from ally Venezuela waned due to its own crisis. Food, medicine and fuel, among other things, are scarce in Cuba and the electricity is often out for long periods. According to the current exchange rate, an average monthly wage is less than 15 euros. Since 2022, around four percent of the Caribbean country's approximately eleven million inhabitants have emigrated.

As a financial expert, one looks at the dismissal of the three ministers in the context of the economic situation in Cuba. The fact that the government is trying to stimulate the economy and correct “distortions” shows that it is aware of the urgency of the situation. The severe economic crisis facing Cuba is exacerbated by various factors such as the long-standing US trade embargo, the collapse in tourism due to the pandemic and declining support from Venezuela. These factors have led to shortages of food, medicine and fuel and are causing high inflation.

The dismissal of the ministers and the appointment of Joaquín Vázquez as the new economy minister could be an attempt to find new approaches to dealing with the crisis. As a financial professional, it is important to monitor how developments in Cuba could impact the market and the financial industry. The reforms could potentially create new opportunities for investment and business in Cuba, while the ongoing crisis continues to pose risks to the stability of the economy and the financial market. It remains to be seen how the new measures will affect Cuba's economic performance and how this could affect international financial markets.