After a recent visit to Cuban President Miguel Diaz-Canel in Havana, renowned Brazilian liberation theologian Frei Betto expressed deep concern about Cuba's current economic situation. The Dominican friar and former intermediary between the Catholic Church and the government of late communist leader Fidel Castro, painted a bleak picture, describing it as the most challenging he has ever witnessed since the Cuban revolution in the 1950s.

Betto also works for the United Nations World Food Programme (WFP), and his assessment was underscored by recent news that the Communist Party-led government in Havana was seeking food aid from WFP. Operating in Cuba since 1963, WFP has only been requested by Havana to deliver food in the wake of natural catastrophes like hurricanes.

UN World Food Programme asked to intervene

Havana's unprecedented appeal for food relief was already made at the end of 2023, the WFP said, and it has already begun delivering skimmed milk powder to Cuba. Spanish news agency EFE reported last week that 144 tons of it were dispatched — approximately 7% of the country's overall monthly requirement of 2,000 tons.

The Cuban government typically provides a monthly quota of heavily subsidized milk to children and individuals with specific diets due to chronic illnesses. Moreover, a state-run system called Libreta provides other staples like beans, cooking oil, rice and chicken meat to those in need, costing the government about $1.6 billion (€1.47 billion) annually.

However, recent disruptions in the availability of state-supplied milk have led to delays and complications in distribution. Some provinces have reduced delivery quantities, while others have substituted milk with syrup or vitamin-enriched instant soda.

Minister for Internal Trade Betsy Diaz Rodriguez told reporters in Havana recently that "challenges in purchasing milk powder abroad, as well as domestic supply and processing issues within the national dairy industry," were reasons for the shortage.

Cuba's foreign currency squeeze

Cuban economist Omar Everleny Perez, however, blames Cuba's "current economic woes including a severe shortage of foreign currency" for the crisis. Perez told DW that Cuba could be self-sufficient in essential food items that could be produced domestically. However, "shortcomings in the Cuban agricultural model" have made food imports necessary.

The scarcity of foreign currency, he said, was exacerbated by a decline in tourism revenue, increased US sanctions, and elevated food and energy prices due to the conflict in Ukraine.

Tourism is the main money-spinner for Cuba but it hasn't fully recovered from the coronavirus pandemic yet Deutsche Welle

The Cuban minister for the food industry, Alberto Lopez Diaz, assured Cubans last week that, milk supply would be secured by March, thanks to fresh deliveries from Brazil.

Shortages beyond milk

The milk powder shortage is not the only concern for Cubans. The supply of wheat flour for bread is also problematic, prompting the government to announce cuts in the supply of subsidized bread until the end of March. Some provinces have reportedly limited bread distribution already.

Economist Perez noted that power outages have increased recently due to fuel shortages. But he also said that Cubans are used to shortages of all kinds and that the situation was better than years before due to economic reforms that allowed private businesses on a small scale. Perez argued that the main problem for the Cuban economy is high inflation, which would increase the government's financial needs while making state subsidies more expensive.

"Nowhere in the world are bakeries owned by the state," he told DW. He suggested the government should give small and medium-sized private enterprises more freedom to address shortages. "I think the state should rather focus on the strategically important sectors of the economy," he added.

Despite the difficulties, Perez is cautiously optimistic about Cuba's future, citing potential economic recovery through tourism. He says if political leaders take the right steps, the private sector can play a crucial role and reduce the pressure on the state.

He added that the appeal to the WFP could be seen as "a pragmatic move" by the Cuban government to "relieve the state budget and create room for planned reforms."