Mario Juan Valdés Navia, a Cuban historian and Research Associate at Duke University, recently released an essay on the CubaxCuba website titled "Eleven Steps of Economic Collapse (1959-2021)." In this piece, he outlines a timeline of pivotal moments that have led to Cuba's economic decline from the Revolution's triumph to 2021. Valdés Navia asserts that the Cuban ruling elite is primarily responsible for the nation's current ruin.
The historian challenges the official narrative by stating that in January 1959, Cuba was not a poor country. At that time, its per capita income was approximately $2,363, equivalent to $27,200 today. This placed Cuba on par with Mexico, Chile, and Spain, and ahead of South Korea and Singapore, which now far surpass it economically. According to Valdés Navia, "the indicators do not support a view of 1958 Cuba as a nation in ruins, desperately needing miraculous solutions."
Valdés Navia argues that the collapse was directly caused by "a series of blunders from an improvised and erratic economic policy; massive defense spending due to intervention threats and civil war (1959-1964); efforts to export the revolution to Latin America and Africa; and escalating tensions with the United States, Cuba's primary trade partner since colonial times."
This essay is the second in a series. The first, published on June 5, detailed the deliberate dismantling of the republican order during the initial years of the revolution, concluding that this process gradually turned Cuba into "a poor, begging nation."
Key Steps in Economic Decline
Among the eleven steps of the economic downfall, the author highlights the forced nationalization of the agricultural economy via the agrarian reform laws of 1959 and 1963; the establishment of the "Economic Register" between 1965 and 1975, a militarized model that dismissed market regulation; and the Revolutionary Offensive of 1968, which nationalized thousands of small and medium-sized private businesses.
In 1985-1986, Fidel Castro criticized the socialist enterprise model as "mercantilist and bourgeois," launching the Rectification of Errors campaign with the slogan "Now we are really going to build socialism!" This move "worsened the economic crisis even before the collapse of the socialist bloc" in 1990. The reliance on Soviet subsidies, the author adds, "created an unprecedented external dependency, unseen even during colonial or republican times."
GAESA's Role in Economic Control
One of the most detailed steps is the expansion of the GAESA conglomerate, established in 1994 under the Ministry of the Revolutionary Armed Forces. Valdés Navia describes this as the "privatization of the national economy by the Castro family and their cronies," relegating the Cuban populace to "three sad roles": poorly paid, obedient employees; captive consumers paying monopoly prices in foreign currency; and emigrants forced to pay inflated travel costs and send remittances — a "ransom for hostages." The U.S. Department of State reported in May that GAESA controls 40% or more of the Cuban economy, with assets valued at at least $17.894 billion. Recently, Secretary of State Marco Rubio criticized the conglomerate in the U.S. Senate.
The essay concludes with the "Ordering Task" of 2021, which Valdés Navia describes not as a reform but as "the final mechanism for GAESA's parasitic enrichment, exploiting the Cuban nation both on the island and in its diaspora." Implemented amid pandemic conditions, it triggered a 77% inflation rate that year and was followed by the July 11 protests and subsequent violent repression.
Current Economic Realities
The Cuban reality in 2026 corroborates this diagnosis: extreme poverty affects 89% of the population, with a median salary of less than 7,000 pesos per month, insufficient against a living cost ranging from 30,000 to 50,000 pesos. The Economist Intelligence Unit forecasts a 7.2% GDP decline for 2026. Valdés Navia, who was ousted from Cuban universities in 2011 for his critical writings on government policies, plans to dedicate his next article to analyzing the last five years since the Ordering Task.
Impact of Cuban Economic Policies
What were the key moments in Cuba's economic decline according to Valdés Navia?
Valdés Navia identifies eleven key moments, including the agrarian reform laws of 1959 and 1963, the establishment of the "Economic Register" from 1965 to 1975, and the 1968 Revolutionary Offensive which nationalized private businesses.
How did GAESA influence Cuba's economy?
GAESA, established in 1994, is described by Valdés Navia as having privatized the Cuban economy, concentrating wealth among the Castro family and their allies, while controlling a significant portion of the national economy.
What were the consequences of the "Ordering Task" in 2021?
The "Ordering Task" led to a 77% inflation rate in 2021, worsening economic conditions and triggering protests on July 11, followed by a harsh crackdown.