Cubans are being forced to queue for food and endure sharp cuts in transport services as a crackdown by US president Donald Trump’s administration worsens the impact of the economic implosion of Venezuela, the communist-ruled island’s key patron.
When American cruise ships were banned from Cuba this month it was the most visible sign that the US had reinstated a policy of sanctions and economic isolation after a brief thaw during the previous administration of Barack Obama.
Cruise ships were diverted at sea after the June 4 announcement and an estimated 800,000 Americans with bookings for Cuba were told they must change their holiday plans. In Cuba, tourist guides, classic car and restaurant owners, souvenir hawkers and others were left high and dry.
“We feel like we are on a rollercoaster,” said David Lopez, who sells souvenirs in Havana. “We went way up like never before with Obama, and now it feels we are dropping really fast.”
For many Cubans, the tide of American tourists in recent years raised hopes of better times just as the economic largesse from Venezuela, its ideological ally, was dwindling.
About 630,000 non-Cuban US citizens travelled to the island last year, according to the Havana government, almost half by cruise ship, while 257,500 Americans arrived this year through to April, 55 per cent on cruise ships.
This had boosted Cuba’s growing private sector, which includes more than 2,000 restaurants and 24,000 private rooms in bed and breakfasts.
“The annual financial impact, assuming approximately 300 sailings originating in the United States transporting approximately 800,000 visitors, will be up to $112m in passenger expenditures and up to $20m from port fees,” said John Kavulich, president of the US-Cuba Trade and Economic Council.
That comes on top of other travel restrictions imposed by Mr Trump, including a ban on the most popular category under which Americans were permitted to visit the island, known as “people-to-people educational travel”.
Mr Trump has reduced both countries’ embassies to skeleton staffs; slowed Cuban travel and immigration to the US to a trickle; ended most bilateral contacts; sanctioned all Cuban military-run companies and hotels and any company involved with shipping Venezuelan oil to Cuba.
“We will continue to take actions to restrict the Cuban regime’s access to US dollars,” Mr Trump’s national security adviser John Bolton wrote on Twitter after the cruise ship ban.
Mr Bolton has led the US campaign against what he has called the “troika of tyranny” of Cuba, Venezuela and Nicaragua.
Cuba reported tourism revenues approaching $3bn in 2018. But the island is immersed in a liquidity crisis caused in part by the economic implosion of Venezuela, from which it receives oil in exchange for providing doctors and, until the past few years, cash and other goods.
Bilateral trade with Venezuela plunged from about $7.2bn in 2014 to just $2.3bn in 2017. Oil shipments are down more than 50 per cent, forcing Cuba to purchase fuel from Russia and Algeria.
Declining revenues have led to increased short-term debt to suppliers and investment partners, estimated at more than $1.5bn by western diplomats and businessmen. This has forced some suppliers to stop doing business with the country, those sources say.
Declining Venezuelan support and the US crackdown are also hitting ordinary citizens. The Havana government has reduced fuel allocations to some state entities by as much as 50 per cent over the past three years, according to local media, resulting in fewer bus and taxi services in a land where few own private vehicles.
Scattered shortages are nothing new in Cuba, but they have become much worse this year, leading the government to regulate some sales to prevent hoarding and reselling products.
Throngs of people queueing for basic goods such as bread, cooking oil, chicken and eggs has become a common sight. Cuba imports up to 70 per cent of its food.
“Everyone is very anxious, because it is not just a problem of food and transportation but, for example, medicines in the hospitals and pharmacies,” Anaida Gonzalez, a retired nurse in the central farming province of Camagüey, said.
“Everyone expects it to get worse and there isn’t even anything to feed to chickens or a pig if you raise them in your yard,” she added.
Tightening the screws, the US administration in April activated a previously dormant section of a 1996 law that allows Americans to sue international companies using Cuban premises that were previously taken over by the communist government.
Western diplomats and businessmen said allowing Americans to sue over use of their former Cuban properties, combined with the ferocity of the Trump administration rhetoric and Cuba’s payment problems, had chilled already anaemic interest from investors.
Panama’s Multibank shut down numerous foreign accounts related to Cuba this year, stating that the action was not related to US pressure, a claim many in the business community doubt.
Two people involved in Cuba’s financial sector said they understood that Spain’s Banco Sabadell was terminating most, if not all, of its non-Spanish clients on the island because of the latest sanctions. A bank spokesperson would not comment.
“It is all but dead,” a European diplomat, whose country is one of the most engaged with Cuba, said of the investment climate.