The Coming Revolution Down South

Will Cuba be Libre soon, and if so what happens next? And after that?

Cuba is coming apart at the seams. I know, I know — it’s been falling apart for literally decades, and one of the sad demonstrations of the past few years is just how long a country whose leaders don’t care about their people’s welfare, because they don’t have to, can be held more or less static. (See also Venezuela, Iran, North Korea). But, you know, “gradually, then suddenly.” There’s some reason to believe that Cuba is approaching the “suddenly” part of that equation. That’s bad news in the near term, but I have some thoughts on the longer term, too, and they’re much more positive.

This appeared on X as I started writing this piece.

As Jonathan leaf writes, Cuba is now moving from desuetude to collapse:

The country’s economy has been virtually non-functioning for years. That’s indicated by the pictures, placed below, which I took on a trip to the country in 2019.

It was Christmas, but there was almost nothing in the general stores to buy. Worse, people had to stand in long lines at food markets in order to get their hands on the few remaining potatoes and onions. Those markets were nestled in amid collapsing buildings and abandoned homes. On the adjoining streets were other lines of people. There ordinary Cubans queued up, glass-bottles in hand, waiting for the drinking water that they took from tanker trucks on the city streets.

Yet things are much worse now. . . .

Cuba is reliant on foreign aid because it can’t produce much of anything anymore. Even the items it was famous for making it can no longer manufacture in quantity. It’s now even importing sugar! It gets much of its current supply from the Dominican Republic, and then it sells this at inflated prices to China. (This is another way in which China is effectively subsidizing Cuba.) Cuban sugar production is only a little more than one-fourth as much as it was when I visited in 2019, and not greater than it was in 1895. That last statistic is especially startling when you consider the growth of the country’s population. In 1895 it had 1.5 million people, but it has over 10 million today.

Cuba’s agricultural failures would be hard to explain were it not Communist. Like most volcanic islands, it has rich soil, and it’s nearly as large as Pennsylvania. However, real calamity will come when its oil supplies run out, and that could happen in weeks.

As he notes, it’s not just that the oil will run out. Cuba depends on oil for nearly all its electricity, and it can’t run its crucial infrastructure, like municipal water systems (which have, like the rest of the country, been allowed to decay because socialism) without electricity. Lack of food refrigeration will be deadly in the tropical climate, too.

The collapse will be ugly. Is the United States ready to respond with food and help if things fall apart and the Communist regime is deposed? Nobody knows; the press isn’t asking, and the U.S. government isn’t talking. (I feel pretty confident, though, that Marco Rubio, and for that matter President Trump, have given this some thought despite all their other concerns; our policies toward Venezuela and Mexico seem calculated to bring the collapse about).

Cuba has a large army and police force relative to the population, and as Leaf notes those forces hold all the guns. (That’s the danger of a disarmed population — or, to dictatorial rulers, the advantage thereof.) But who will they be loyal to when the regime can’t pay them, a moment that is likely to appear soon?

I suspect that whatever powers are left in Cuba will be receptive to offers they can’t refuse, and I imagine that we’ll see the Art Of The Deal at work again. The likely outline involves jobs for many of the middle managers who are there now, sinecures for the army and police people whose cooperation we need, and a chance for some to be involved in lucrative investments and development on the island. There should be a lot of the latter.

I’m reminded of a conversation I had back in 2011. I was giving a speech on Grand Cayman for the Cayman Financial Review and I had lunch with one of the three lawyers who figured out how to set Cayman up as an offshore banking center. I had brought my family, and Helen and I were sort of casually looking at places to buy. His advice: No one much has lost money investing in Cayman real estate, but if you’re holding for the long term, remember that Cuba will probably open up in your lifetime, and Cuba has as much developable coastline as the rest of the Caribbean islands put together.

Grok informs me that Cuba has a bit over a third of the total island coastline in the Caribbean; I don’t know how his term “developable” modifies that. But anyway, it’s a lot.

His point was that when Cuba opens up, there will be a big wave of development, and that increase in the supply is likely to push down prices elsewhere.

But regardless of what this does to the value of Iggy Pop’s Cayman beach house (and yes, he has one, as does Armie Hammer, who has a lifelong connection to the islands) it means lots of economic opportunity in Cuba. Much of the money will be made by outside investors, who will provide capital and specialized knowledge. But there will be a lot of money made by Cubans, as workers, managers, property owners, real estate agents, merchants, and more.

You can bet that real-estate developer Donald Trump has thought about this, and planned for it. And you can bet that a lot of current and potential power-brokers on Cuba have thought about it too. There’s the prospect of a deal that will make everyone much richer — though to be fair, after 60+ years of communist destruction, making everyone much richer is a low bar.

Stay tuned.

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