AGP Executive Report

US Sanctions Tighten Grip on Cuba’s Economy: The Trump administration hit Cuba with new sanctions on Fidel Ernesto Castro (Raúl Castro’s grandson), Banco Exterior de Cuba, and firms tied to nickel and the power grid, including Abapet—aimed at disrupting maintenance supplies as blackouts worsen. Energy Crisis Meets Real-World Costs: Cuba’s grid strain is also showing up in workplace risk, with a Havana lineman dying during maintenance—another sign of how shortages and aging infrastructure are biting. Free-Market Rules Move Forward: Cuba formalized changes letting foreign and mixed-ownership companies hire directly without state mediation, a step meant to simplify investment and labor access. Foreign Investment Push, Tourism Fallout: Reuters reports Cuba is expanding legal openings for foreign investment and trade, but tourism remains battered—international arrivals are down sharply year-on-year. Currency Watch: In the informal market, the dollar closed at 683 CUP and the euro at 773 CUP, reflecting continued pressure and volatility. Education Under Strain: Cuba reopened the academic year despite fuel, electricity, water, and teacher shortages, with universities shifting to hybrid formats amid long outages.

Sanctions Pressure Intensifies: The U.S. imposed fresh sanctions on Fidel Ernesto Castro Calis (Raúl Castro’s grandson), Cuba’s Banco Exterior de Cuba, and firms tied to nickel and energy, as Washington argues elites profit while shortages worsen and blackouts strain the grid. Market Reforms: Cuba also unveiled new rules to attract foreign investment, trade and tourism—aiming to cut red tape, simplify processes, and make it easier for investors to operate, following a major June reform package. Non-State Sector Expansion: Cuba’s Decree-Law No. 133 opens more room for non-state economic actors, including allowing private enterprises to hire over 100 workers and reducing requirements and timelines for starting and running businesses. Tourism Under Strain: Despite optimism from the tourism ministry, multiple reports point to a steep drop in visitor arrivals as U.S. pressure and energy constraints bite. Currency Watch: Informal market updates suggest the dollar stayed stable while the euro moved higher, reflecting ongoing pressure on household purchasing power. Energy & Humanitarian Risk: The sanctions backdrop is tied to fuel access problems and repeated nationwide blackouts, with the UN warning of a potential humanitarian crisis.

Cuba’s private sector gets a major green light: Cuba has finally authorized Cubans living abroad to own private companies on the island, while also expanding the size limits for private businesses (including firms with more than 100 workers) and allowing individuals to hold stakes in multiple ventures—an overhaul aimed at reviving activity without formally abandoning the state-led model. Tourism keeps sliding: ONEI reports international traveler numbers through July at just 50.2% of the prior year, with foreign visitors down sharply and major source markets (including Canada, the Cuban diaspora, and the U.S.) showing steep declines—another hit to hard-currency inflows. School year starts under strain: Cuba opened the 2026–2027 school year amid shortages of teachers, materials, uniforms, food, water, and electricity, with families facing long blackouts and mounting costs that can reach nearly 11 minimum wages for basic supplies. Energy and digital governance push forward: Cuba says its foreign minister is blaming the “energy blockade” and U.S. secondary sanctions for the crisis, while the government also moves ahead with a digital government upgrade for its Soberanía platform, backed by UNDP and China, to expand online services and digital identities. Sanctions ripple into everyday business: In Belfast, a Cuban sandwich shop says a delivery-platform payment delay tied to U.S. sanctions was resolved after public pressure—showing how compliance shocks can quickly hit cash flow. Currency snapshot: In the informal market, the dollar held steady at 678 CUP while the euro rose to 770 CUP, underscoring continued pressure and volatility.

Private Sector Expansion: Cuba removed the 100-worker cap for private firms and reworked MSME rules under Decree-Law 133/2026, formally allowing “private companies” above 100 employees while keeping state oversight and requiring authorization for direct imports/exports. State Enterprise Pay Rules: Cuba’s state-business regulator (Resolution 2/2026) sets new profit-distribution procedures, including quarterly profit advances to workers (up to 50% of available profit) starting in 2027. Energy & Sanctions Pressure: Tourism keeps sliding as U.S. sanctions bite—Cuba reported 794,492 travelers in Jan–July, down 49.8%—while Rubio again blamed Cuba’s failing grid and loss of subsidized Venezuelan oil for blackouts. Payments Tech Disruption: ETECSA said SMS service problems temporarily shut down Transfermóvil, disrupting electronic payments. Aviation Debt: Russian firm Ark Technic sued Cubana de Aviación/CACSA for about $6.2m and seeks asset seizure. Tourism/Flights: Delta asked to keep most Cuba frequencies suspended for the 2026–27 winter, citing weak demand. Education Rules Update: MINED updated procedures for non-state education activities (child care, language classes, tutoring, shorthand, typing).

Cuba Tourism Shock: Cuba’s foreign visitor numbers plunged 62% in the first seven months of 2026, with about 419,000 arrivals versus 1.1 million in the same period of 2025, as U.S. pressure, an energy embargo, and sanctions on tourism operators hit hotels, flights, and payment systems. Energy & Power Strain: The broader economic squeeze is showing up in daily life, from blackouts and shortages to new infrastructure disruptions, including a landfill fire that damaged Las Tunas’ power network and left neighborhoods without electricity. Reform Debate in the Background: Cuban economists in Miami argue the crisis is structural and call for a social market economy plus rule-of-law reforms, contrasting with partial, party-led changes. Human Cost on the Ground: Reports from inside Cuba describe nights without electricity, doctor salaries that can’t cover basic food and medicine, and rising stress and hunger. Cuba’s Currency Pulse: In the informal market, the dollar held steady while the euro softened, reflecting ongoing foreign-currency shortages and shifting demand. Regional Oil Politics With Cuba in Mind: U.S. officials defended a Venezuela oil deal that gives Washington control over a large share of reserves and fields—framed as a way to curb Russian/Chinese influence and prevent oil diversion tied to Cuba.

Cuba’s School Year Under Strain: Cuba reopened classrooms for 1.4M students with 135,000 teachers, but families face fuel shortages, missing uniforms and teacher gaps as buses stay off the road and power disruptions worsen. Energy & Infrastructure Pressure: Cuba forecasts major blackouts and reports ongoing damage risks to the electrical system, including transformer oil theft tied to severe penalties. Sanctions vs. Reforms: Cuba’s UN ambassador says U.S. sanctions keep blocking investment and tourism even as Havana expands private activity; the dispute centers on why Washington urges openings while tightening restrictions. Secondary Sanctions Spillover: A Belfast Cuban sandwich shop suspended Deliveroo payments after U.S. sanctions disrupted banking flows tied to Cuba. Legal/Business Rules Update: Cuba moves to update its domestic trade framework and relax wholesale regulations, aiming to make commerce work better amid shortages. Crime & Safety Alert: The U.S. Embassy in Havana warns of a rise in vehicle-related thefts, urging tighter precautions. Leadership Uncertainty: Reports of Raúl Castro’s critical health are reviving questions about Cuba’s future stability.

Cuba’s power crunch hits daily life: The Electric Company in Las Tunas posted a school-year message—and Cubans flooded it with blackout jokes as the grid struggles (generation far below demand, with large parts of the country losing electricity). Education under strain: Cuba’s Education Minister says the 2026–27 school year will start “very difficult,” with shortages of uniforms, notebooks, teacher supplies, and school meals—pushing local “state and private” sponsorships in places like Camagüey/Florida. Humanitarian aid and sanctions pressure: US Secretary of State Marco Rubio met Havana’s diplomat Mike Hammer to review a $100m humanitarian effort routed via Caritas and other groups; a Cuban-American group urges broad humanitarian exemptions, including for fuel, while pressing Havana to ease aid-blocking rules. Foreign trade squeeze: A BBC report says Cuba’s food crisis is tied to both sanctions and internal agricultural failures; meanwhile Swiss trade with Cuba is collapsing as banks struggle to process payments under US sanctions. Pensions delayed: Cuban retirees report months-long waits (up to a year) for pension recalculations, raising fears they won’t live to enjoy the increases. School-year fixes via private firms: Camagüey officials say local businesses will sponsor repairs and maintenance for dozens of schools. Tourism and inequality debate: A viral Varadero clip of a crowded hotel and 200+ private cars sparked debate over who can afford the domestic tourism push.

Cuba’s Private Sector Push: Cuba authorized private retail and restaurant chains to register a single brand and open multiple locations across provinces, letting micro, small and medium firms, cooperatives and foreign investors operate in Cuban pesos and foreign currency as part of a 176-reform package aimed at easing shortages and bureaucracy. Retail Under Strain: In Matanzas, food stalls in the Sacristy alley are retreating as vendors face supplier gaps and power outages, with some unable to recoup major cart costs. Energy Crime Crackdown: Cuba’s prosecutor warns that stealing dielectric oil from transformers is being treated as sabotage, with penalties up to death, after hundreds of investigations since 2025 and heavy cases in provinces like Matanzas and Santiago. Currency Pressure: The informal market opened with the dollar at 678 CUP and the euro at 765 CUP, both up versus the prior day, reflecting ongoing foreign-currency scarcity. Food Security Support: WFP expanded its “Act Differently!” local food project in Rafael Freyre, linking cooperatives with social protection institutions to strengthen eastern Cuba’s food systems. Tourism Headline: Expedia is back in a Miami federal court fight under Helms-Burton over confiscated Cuban properties, with a jury previously siding with the company before an overturned verdict.

Cuba’s Market Rules Update: Decree 167, published in Cuba’s Official Gazette, creates a “light food service network” framework for recognized brands and chains—opening the door in theory to big names like McDonald’s, while still keeping centralized controls. Food & Health Aid: UNICEF says it delivered 213,000 prenatal supplement bottles to 30,430 pregnant and breastfeeding women in Cuba via air after sea shipment was impossible, with extra costs covered by UNICEF. Tourism & Air Links: Air Europa says it’s keeping and expanding flights to Havana despite Cuba’s fuel and tourism slump, adding frequencies and planning more service later. Energy Strain Hits Daily Life: Reports highlight how blackouts and water shortages are worsening conditions across Havana and beyond, including impacts on animal shelters and veterinary cold-chain needs. Exchange Rate Watch: In the informal market, the dollar closed around 676 CUP and the euro around 765 CUP, both higher than the prior session. Local Accountability: A Havana resident who posted about water access and alleged local favoritism was detained, underscoring risks for citizens using social media to report shortages. Business Resilience: Despite the crisis, Cuban chefs and small restaurants are trying to survive by shifting toward domestic customers and cheaper menus.

Tourism Shock: Cuba’s hotel crisis is deepening fast: Prime Minister Manuel Marrero Cruz said 73% of hotel facilities are closed, leaving about 25,000 workers “available,” and seven foreign chains have stopped operating—Meliá, Iberostar and Barceló among them—while the government links the collapse to U.S. sanctions pressure on foreign business. Energy & Investment Contradictions: Critics are pointing to the K-23 “monument to failure” in Havana—reportedly a $200M-plus luxury project with low occupancy—while the electrical system struggles, raising questions about whether tourism spending is out of sync with Cuba’s power reality. Currency Watch: In the informal market, the dollar opened higher at 675 CUP and the euro at 763 CUP, underscoring persistent peso pressure amid structural shortages. Digital Governance Push: Díaz-Canel marked the first anniversary of the Sovereignty Platform, citing tens of thousands of digital identities and applications, but admitting uptake still lags in a country facing outages and weak connectivity. Education Funding: National tuition scholarships in St. Vincent and the Grenadines fell to 2,466 for 2026/27, down more than 500 from the prior year’s peak—an example of how budgets are tightening. Local Crisis Voices: Rigoberto Ferrera’s latest post boils the situation down to “hours without light, weeks without water,” while Cubans keep reporting daily breakdowns in basic services.

Cuba Economic Opening: Cuba is set to loosen key controls on its state-run economy, starting this week, to let private firms trade directly with foreign businesses, expand foreign investors’ hiring freedom, and boost real-estate development—moves framed as a lasting shift amid intensifying U.S. pressure. Cuban Trade & Rules: Cuba also updates its legal framework for domestic trade, including steps that would affect how private businesses operate and sell. Informal FX Watch: In the informal market, the dollar closed around 675 CUP and the euro around 763 CUP, with the dollar up over the week—another sign of ongoing currency scarcity. Prices Bite Households: MDM chicken picadillo jumped to 600 pesos per pound, linked to the domino effects of Resolution 150/2026 removing price caps on key staples. Energy Strain on Daily Life: Blackouts and fuel shortages keep disrupting life, from Holguín’s anger over celebrations during outages to transport paralysis in Guantánamo due to lack of fuel. Infrastructure Risk: A break in the Varadero–Matanzas pipeline was sealed after an oil spill, highlighting fragility in aging pipeline standards.

Cuba’s Domestic Trade Overhaul: The Official Gazette published Decree 167 and related rules to reorganize Cuba’s internal commerce, including clearer procedures for domestic trade and a new Central Commercial Registry framework under MINCIN, with Decree 168 pushing mandatory compliance via information and communication technologies. School Year Under Strain: Holguín says it will start 2026-2027 with a deficit of over 2,000 teachers, using “educational zones,” adjusted schedules, and emergency staffing measures as Hurricane Melisa damage and shortages complicate in-person learning. Energy-Linked Water Crisis in Havana: Reports highlight blackouts and failing pumps leaving Havana thirsty as officials review strategies to restore water supply amid prolonged power outages. Pipeline Fragility Exposed: A sealed break on the Varadero–Matanzas crude pipeline after an oil spill underscores aging infrastructure risks; repairs took 23 hours and affected supply to the Antonio Guiteras thermoelectric plant. Currency Watch: The informal market shows the dollar up to 674 CUP and the euro at 763 CUP at dawn, reflecting continued pressure on household purchasing power. Private-Sector Rules Tighten: MINCIN also moved to relax wholesale trade regulations while warning the private sector against illegalities, as the state tries to formalize and control market activity.

School & Power Crisis: Cuba will start the new school year on Sept. 1 with about 1.4 million students returning, but the Education Ministry admits only 73% of teaching posts are filled, uniforms won’t cover everyone, and it can’t guarantee in-person classes amid rolling blackouts and shortages. Electricity Disruptions: Reports from eastern and central areas describe prolonged outages and broken complaint channels, while warnings highlight how blackouts are stealing daily life time, not just electricity. Water Safety: The U.S. Embassy in Havana issued a health alert citing worsening water instability tied to the power crisis, warning that cold-chain failures and unreliable supply can raise health risks. Food & Currency Pressure: The informal market again shows the dollar and euro rising against the CUP, while Cubans report rising prices and scarcity pressures in everyday purchases. Agriculture 4.0 Pushback: Díaz-Canel promoted drone-based “Agriculture 4.0,” but social media backlash points to hunger and heavy food import dependence, questioning when staples like beans will actually be produced. Private Sector Friction: Swiss firms say trading with Cuba often fails after paperwork because state banks rarely collect, signaling persistent barriers for business. Healthcare Income Block: A Cuban medical mission’s Italian bank account reportedly remains frozen, disrupting transfers tied to doctors’ earnings. Market/Trade Signals: MINCIN moves to relax wholesale trade rules and re-categorize businesses, aiming to ease private-sector operations.

Energy & Utilities: Eastern Cuba was partially disconnected from the National Electric System after transmission-line fluctuations, knocking out units at major plants and disrupting hospitals, pumping systems, and business activity. Water Security: President Díaz-Canel visited the Paso Seco water source as maintenance and backup-power upgrades continue to keep Havana pumping during the energy crisis. Education Under Strain: Cuba will start the school year with in-person learning despite shortages of teachers and uniforms, plus flexible schedules to cope with power problems. Healthcare Supply: UNICEF delivered 213,000 prenatal bottles to pregnant and breastfeeding women in Cuba, using air logistics via Panama to bypass sea transport hurdles. Food & Local Support: A private Santa Clara bakery project “Pan pa’ti” is providing free monthly food packages and daily bread to 10 vulnerable families, expanding help to elderly residents and nearby schools. Retail Rules: MINCIN published a new typology for classifying Cuban retail establishments into three quality/comfort levels and seven activity types, replacing older rules. Currency & Informal Market: Reports point to renewed dollar strength in Cuba’s informal market as the day ends, with the euro weakening. Sanctions Pressure: The U.S. sanctioned the bank account tied to Cuba’s medical mission in Italy, raising new compliance and payment risks for the brigade. Private Sector Oversight: MINCIN’s new classification framework signals tighter monitoring of private and state retail quality standards. Human Stories: A Cuban family survives on chicken bones and a sweet potato amid food shortages, while a Santa Clara teacher shortage forces class reorganization.

Energy Crisis in Cuba: UNE says the eastern disconnection (Holguín to Guantánamo) has been restored after an oscillation in transmission lines took three thermal units offline, but many residents report power still not returning. Water Supply Emergency: Díaz-Canel visited the Paso Seco source in Boyeros as Havana’s water crisis leaves hundreds of thousands hauling buckets and buying costly water trucks; authorities admit the network is in a “critical situation.” Healthcare Under Sanctions: Cuba denounced new U.S. restrictions on medicines and medical inputs, citing progress on the home-grown cancer treatment 2C12 while warning raw-material limits are choking biopharma production. School-Year Strain: Cuba plans to start the school year next week despite shortages, teacher gaps, and transport/electricity problems, with nearly 1.4 million students set to return. Informal Market Watch: The informal currency market closed with the dollar up to 670 CUP, the euro down to 756 CUP, and the MLC rising to around 469 CUP. Food Pressure: A viral video shows people turning to hard-to-find options like slugs in sauce as prices for staples stay out of reach. Private Sector Bottleneck: Cuba’s MIPYMES face an institutional void—without their own chamber or union—limiting the private sector’s ability to organize and grow.

U.S.-Cuba Sanctions & Visa Pressure: Cuba’s UN envoy Ernesto Soberón denounced Washington’s “policy of suffocation,” citing intensified, extraterritorial economic and financial blockade impacts on daily life. School Year Resilience: Cuba will start the new school year on Sept. 1 despite transport, electricity, and supply shortages; Education Minister Naima Trujillo said about 1.5M students will return and that teachers have been preparing facilities even with reduced vacations. Informal Market Signals: Reports from Cuba’s informal currency market show the dollar and euro moving upward at different points in the day, reflecting ongoing liquidity and pricing pressure. Energy & Infrastructure Strain: Cuba continues to face power and fuel constraints, with coverage highlighting electricity disruptions and the knock-on effects for services and households. Regional Geopolitics With Cuba in the Mix: The U.S. removed Syria from its state sponsor of terrorism list, leaving Cuba as one of the remaining countries on the list—an update that could affect broader sanctions and investment risk perceptions. Legal/Detention Spotlight: A U.S. military judge set June 5, 2028 for the 9/11 mastermind Khalid Sheikh Mohammed’s trial at Guantánamo Bay, keeping Cuba tied to high-profile U.S. legal and detention issues.