Thursday, March 10, 2022

CSI Continues to Experience Steep

Dr. Jorge I. Dominguez is an international relations scholar with 50 years of research and publishing experience. The author of numerous articles and co-editor of books on Cuba, Dr. Jorge I. Dominguez has been an astute observer of the island nation's political evolution and economic challenges, an ongoing one being the hits to its sugar industry.

Traditionally underpinning a major rum export industry, sugar was a significant driver of employment and economic development before and during Cuba’s communist rule. 1989 represented a high-water mark, with eight million metric tons of sugar produced. Unfortunately, production has steadily fallen; in 2021 this number hit 800,000 metric tons, their lowest since 1908.

Reasons for this precipitous drop, part of a continuing trend, include inept state enterprise management, insufficient incentives to improve productivity, a history of counterproductive government decisions, strict US trade sanctions that impair Cuba's access to international financing for irrigation and basic replacement parts and, more recently, the Covid-19 pandemic. This situation, which is systemic and cannot be remedied without major investment, may prove disastrous both for food self-sufficiency goals and the export economy. For 2022, the country has earmarked 500,000 metric tons of sugar for domestic consumption, while it expects to export 400,000 tons to China, as per longstanding trade arrangements. However, if production is even less than the 800,000 metric tons in 2021, there will be a major shortfall.