Cuba doesn’t have any beggars, according to the country’s minister of labour, Marta Elena Feitó Cabrera. In a speech to the national assembly on July 15, she denied the existence of destitution in the communist country, claiming the problem was actually people “disguised as beggars”.

Her words were greeted by public outcry on social media. They also prompted a swift rebuke from her peers and the president, Miguel Díaz-Canel, who said leadership could not “act with condescension”. The next day, the Cuban government published an official note saying Feitó Cabrera had resigned.

The political vulnerability of the Cuban government explains the urgent need to respond to missteps such as Feitó Cabrera’s. The country is enduring an acute economic crisis, which has seen living standards plummet and over 1 million Cubans leave the country since 2020.

Cubans are leaving en masse:

A severe economic crisis in Cuba has prompted a mass exodus from the island.
Oficina Nacional de Estadísticas e Información

The recession has severely strained the system of social protection that the government points to as one of its main achievements since taking power more than 60 years ago. Despite food subsidies and the efforts of welfare services, a growing number of people are now going hungry.

Public confidence in the government has been severely weakened as a result, particularly among young Cubans. The risk of escalating popular protest is magnified by the proliferation of social media channels, emanating from inside and outside the country.

These channels air the many complaints about daily frustrations in Cuba and highlight any failings or signs of hypocrisy on the part of officials. So when Feitó Cabrera’s speech went viral, it was met with inevitable public outrage.

Díaz-Canel’s reaction can be seen as urgent damage limitation. But it is also consistent with his broader approach to managing the crisis facing his country. He has worked tirelessly to try and defuse anger through engagement, touring Cuba for local meetings to search for solutions.

In his comments after Feitó Cabrera’s speech, he insisted that officials should acknowledge the scale of hardship being suffered, and “help, support and show solidarity” with the disadvantaged and most vulnerable.

This need to reach out was all the more important given the grim tone of the national assembly meeting where Feitó Cabrera made her remarks. Ministers appeared one after the other to present dismal reports on the state of almost all sectors of the Cuban economy.

The electricity system remains plagued by breakdowns caused by chronic underinvestment as well as difficulties in obtaining fuel and spare parts. The resulting daily power outages ensure that the sense of crisis is ever-present and frustrate all efforts to boost production.

Doubting official data

While full official national income data for 2024 has not yet been released, Cuba’s economy ministry estimates that real national income contracted by 1.1% in 2024. This leaves it more than 10% below its pre-pandemic level, and 2025 is not expected to show much improvement.

The decline in real disposable income for Cuban households since 2021 has, in reality, been far greater. The official inflation rate indicates that consumer prices have risen fourfold over the past five years. At this rate, living costs would have increased broadly in line with salaries.

Consumer prices have risen fourfold since 2020:

Official inflation data for Cuba. The spike in early 2021 was the result of a monetary reform, which involved a big jump in wages in December 2020 followed by a currency reform in January 2021.
Oficina Nacional de Estadísticas e Información

But official figures systematically understate the actual increase in prices faced by Cuban households, due to the weightings used. In 2021, for example, research estimated the inflation rate to be between 174% and 700% – well above the government’s estimate (77.3%).

The rising market prices have put many essential goods beyond the reach of most people who depend on state incomes. This has forced many households to depend on remittances or the informal economy to survive.

Thanks to tight fiscal restraint, the official annual rate of inflation eased to 15% in June. But the wide gap between the increase in the actual cost of living and official inflation index continues to compound distrust of the government and the perception that the country’s leaders are out of touch.

A lack of transparency and long delays in the publication of economic data, together with restrictions on the scope for private enterprise, are widely attributed to the government’s incompetence and reluctance to enact liberalising reforms.

Recovery blocked by US sanctions

For these reasons, the government’s insistence that US sanctions are to blame for limiting the possibilities for economic recovery is increasingly regarded with scepticism. However, the constraint on economic growth imposed by US measures is real and severe.

It is also the deliberate aim of US policy. The unilateral sanctions not only block trade, as well as financial and international travel between the US and Cuba. They also severely hamper all kinds of transactions between Cuba and the rest of the world.

Every branch of the Cuban economy has been affected, including the health service, social safety nets, agriculture and industry. And the lack of hard currency has, in turn, limited the scope for the investments and reforms needed for economic recovery.

The easing inflation rate, together with some new investments in renewable energy, an improved fiscal balance and a recent small increase in pensions, may signal that the end of the economic downturn may be approaching. But neither the government nor the population have any confidence that the crisis will come to an end this year.

No one is expecting US sanctions to be lifted while Donald Trump is president. Before Trump first stood for the presidency he hadn’t given Cuba his attention, but as president he has aligned himself firmly with hardliners.

In his first term, Trump reversed the opening with Cuba initiated by Barack Obama. And his current secretary of state, Marco Rubio, is one of the architects and leading proponents of economic sanctions against Cuba. Trade and investment will thus remain depressed, while shortages, power cuts, a lack of transport and crumbling public services will persist.

But by demanding the resignation of the minister of labour, perhaps Díaz-Canel hopes to demonstrate that his government understands what that the economic asphyxiation means for a majority of Cubans struggling to survive.

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Emily Morris does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.