Tag Archives: Jorge I. Dominguez

Internet Increasingly Drives Cuba’s Informal Economy

Dr. Jorge I. Dominguez is a US academic who taught international relations as a Harvard University professor for many years. Born in Havana and the author of several books on the subject of Cuba, Dr. Jorge I. Dominguez has a particular expertise in the area of market reforms in what is still a state-run economy.

A November 2022 Associated Press article brought attention to the growing role of the Internet in bolstering Cuba’s informal economy, which is often used to procure scarce and expensive items. An example is a Telegram group chat that reaches 170,000 people and enables the sale of everything from medicine to cleaning products.

For many years the Internet remained challenging to access in Cuba, and the black market existed largely among neighbors locally. However, in recent years the use of messaging and e-commerce sites has exploded. Revolico and other sites that mimic Craigslist offer items that range from sought-after “capitalist” apartments in Havana to electric bicycles.

In addition, high traffic WhatsApp groups allow discussions on topics such as the current informal exchange rate, which help consumers make educated financial decisions. This has to do with a situation in which many lower priced items sell in pesos, while higher ticket items are priced in dollars and require cash or international bank transfers. One unresolved issue involves “revendedores,” or people who purchase items abroad and resell them in Cuba for a profit. In October, President Miguel Diaz-Canel branded such entrepreneurs as criminals who “break the concepts of socialism,” and whether they will be allowed to flourish in the long term remains to be seen.

US-Cuba Economic and Political Relationship still a Work in Progress

Dr. Jorge I. Dominguez was a longtime Harvard University professor who served as chair of the Harvard Academy for International and Area Studies. Among the textbooks Dr. Jorge I. Dominguez has edited is “Cuban Economic and Social Development: Policy Reforms and Challenges in the 21st Century,” and he maintains a focus on trends in this area.

A May 2022 World Politics Review article brought focus to Miguel Diaz-Canel’s emergence as president in 2018. This culminated in his being named Cuban Communist Party chief in 2021. Between these milestones, Diaz-Canel favored a number of institutional reforms that included the creation of a new prime minister position, while working to implement a limited number of market economic reforms within an essentially static state-run system.

At the same time, the byword of Diaz-Canel’s leadership has been “continuity,” which has disappointed those in search of even more systemic reforms that would unlock Cuba’s entrepreneurial potential. In addition, the faltering US-Cuba relations during the term of President Trump placed even Havana’s limited efforts to privatize portions of the economy at risk. While many expected the normalization process begun under President Obama to gain traction under Joe Biden, Trump-era rules remained in place during a 15-month policy review process. This underlined the back-burner status of Cuba in current US political calculations.

The review did finally wind up with the most extreme sanctions being lifted, including those impacting the ability of Americans to study in Cuba, and restrictions on cash remittances were lifted. This did not mark a shift toward normalization, however, and mass protests have occurred since then, reflecting an often desperate population with few good economic options.