If you think you’re having a rough day, imagine bringing home just 5,000 Cuban pesos a month—sounds like a lot, but it’s barely $12 in U.S. dollars. That’s the monthly wage for the average Cuban state worker, putting a stark spotlight on the country’s financial woes. As if earning a mere fraction of what most people make in a day wasn’t challenging enough, actually withdrawing those hard-earned pesos from the bank is turning into a nightmare.
Cuba is grappling with a perfect storm of economic troubles: a severe cash shortage, soaring inflation, and government deficits that have plunged the socialist economy to its lowest point in decades. According to Cuban economist and university professor Omar Everleny Pérez, “The main culprits are the government’s growing fiscal deficit, the nonexistence of banknotes, stubbornly high inflation, and the non-return of cash to banks.”
While economic difficulties are nothing new for this communist island, the growing inability of citizens to access their own money is alarming. With consumption driving two-thirds of a nation’s GDP, it’s no wonder Cuba is seeing stagnant growth—people need money to spend money. The scarcity of physical cash has sparked public outcry and raised questions about the government’s silence and lack of transparency regarding the roots of this crisis. After a brief post-pandemic recovery, Cuba’s economy began to falter again in 2022, although the accuracy of this data is questionable since it’s provided by the Republic of Cuba itself.
Perhaps it’s as simple as malfunctioning equipment and ongoing power issues—both of which have plagued the nation for years. If you’re in Havana trying to withdraw cash from a Banco Metropolitano ATM, you’re likely to see the frustrating message, “Excuse us, at the moment the equipment is having technical difficulties to deliver cash.” Not exactly what you want to hear when you need money.
Life in a developing country can be grueling, especially financially, if you live outside of Havana where ATMs are even scarcer. Yet, according to the government, everything is just fine. Minister of Communications Mayra Arevich Marín assured the public that there’s no need to purchase more equipment. Sure, if you say so.
While some cash may still be circulating, it’s not in the banks. Small businesses, the backbone of most economies—even socialist ones—rely on cash to buy goods and services, most of which come from abroad. This means business owners need fiat currency to exchange for the foreign currency required for their transactions. Maria Efigenia Caballero, deputy director of Bandec in Sancti Spíritus province, noted that “in a time of shortages, we are also being hit by the extraction of high volumes by some small and medium business owners, self-employed fundamentally.” With no interest to gain and significant difficulty accessing funds, it’s no surprise that small businesses are opting out of banking altogether.
The velocity of money—how frequently a peso or dollar changes hands—is a key indicator of financial health. In 2018, half of the cash in circulation was held by the Cuban population and the other half in banks. But by 2022, 70% of the cash was in people’s wallets, according to Pérez.
We’ve established that part of the problem is physical, with outdated and poorly maintained ATMs across the island. Even if you have money, accessing it is a challenge. Businesses are exacerbating the cash shortage by hoarding pesos to exchange internationally when needed, further limiting the cash available for daily transactions.
The shortage of banknotes and runaway inflation are compounding the misery. With many ATMs dispensing only 1,000 peso notes—the equivalent of just $3 U.S.—machines run out of cash quickly. The malaise starts at the top, as in any socialist society, where the few prosper while the masses struggle. In this system, nothing trickles down to the people, and it never will. The proletariat has no say in the matter—they were simply born into a communist regime. But history has shown us that, sooner or later, the oppressed will rise. The question for Cuba is when.
