Cuba

Cuba controls the Florida Strait. This 150-kilometer gap between Cuba and Key West funnels Gulf of Mexico shipping toward the Atlantic—every tanker leaving Houston, every container vessel departing New Orleans. The island's position made it the strategic key to the Caribbean for four centuries of colonial warfare. Spain held it from 1492 until 1898, longer than any other American territory. The United States took it in the Spanish-American War, then granted nominal independence while retaining Guantanamo Bay and the right to intervene. Fidel Castro seized power in 1959, and Cuba became the Caribbean's alternative stable state—a controlled experiment in what happens when an island chooses exit over voice.

Sugar made Cuba rich, then made it dependent. By the 1920s, the island produced 25% of the world's sugar, and sugar comprised 80% of exports. American companies owned the mills; Cuban workers cut cane. The monoculture economy created the political conditions for revolution—concentrated land ownership, seasonal unemployment, extreme inequality. After 1959, Castro nationalized the sugar industry but doubled down on the crop, now selling to the Soviet Union at subsidized prices. When the Soviet Union collapsed in 1991, Cuba lost 80% of its imports and 35% of its GDP in four years. Cubans call this the Special Period.

The Special Period forced adaptation. Cuba developed a dual currency system—pesos for locals, convertible pesos for tourists—that persisted until 2021's unification attempt triggered inflation exceeding 70%. The country legalized self-employment, welcomed foreign tourism, and accepted remittances from the Miami diaspora it had spent decades denouncing. By 2024, remittances reached an estimated $3.5 billion annually, exceeding sugar and nickel exports combined. The economy runs on dollars sent by the two million Cubans who left.

Emigration accelerated dramatically after 2020. Between October 2021 and September 2024, over 700,000 Cubans reached the United States—roughly 6% of the island's population in three years. The drivers compound: economic collapse, power blackouts lasting 18 hours, food shortages, and political repression following the July 2021 protests. Cuba's population has likely fallen below 10 million for the first time since the 1970s.

The island's isolation is partly chosen, partly imposed. The U.S. embargo, strengthened under Trump and maintained under Biden, blocks most trade and investment. Cuba remains on the State Sponsors of Terrorism list, restricting access to international banking. But the government also maintains controls that limit private enterprise, suppress political opposition, and restrict information flow. The result is an economy frozen in amber—1950s American cars still running because nothing new arrives, healthcare and education systems that outperform regional peers but cannot retain the doctors and teachers they train.

Cuba in 2026 faces its deepest crisis since the Special Period. GDP contracted 1.9% in 2024 after falling 1.8% in 2023. The state cannot pay teachers or repair the electrical grid. Young Cubans leave as soon as they can reach Nicaragua, which offers visa-free entry and a land route north. The alternative stable state that survived the Cold War, the Special Period, and decades of embargo may finally be approaching a phase transition—though what emerges on the other side remains as unpredictable as the 1959 revolution itself.