How did the collapse of the Soviet Union affect Havana’s economy in 1991?

The collapse of the Soviet Union in 1991 had a devastating impact on the economy of Havana, as the city’s trade with the Soviet bloc had effectively subsidized the Cuban economy. The loss of this vital income and support led to severe shortages of essential goods, power, and transportation.1

This period of crisis, which Cubans refer to as the período especial (“special period”), was characterized by widespread financial uncertainty and a sharp decline in overall trade. In response to these economic challenges, the government implemented several reforms to stabilize the situation:23

• Private Enterprise: Controls on private businesses were relaxed, allowing for the operation of family restaurants and farmers’ markets.1
• Currency: The government permitted the circulation of U.S. dollars as legal tender.1
• Foreign Investment: Efforts were made to promote foreign investment, particularly within the tourism sector, which eventually led to increased visitor traffic by the early 21st century.1

Despite these measures, the collapse fundamentally altered the economic landscape of the capital, forcing a shift away from the previous reliance on Soviet-subsidized trade.13