Why did Cuba’s economy suffer after the Soviet Union dissolved in 1991?

Cuba’s economy suffered significantly following the dissolution of the Soviet Union in 1991 because the island had become heavily dependent on Soviet support.12

Prior to 1991, the Soviet Union provided Cuba with approximately $3 billion in annual aid, including loans, petroleum, and military equipment. Furthermore, the Soviet bloc effectively subsidized the Cuban economy by purchasing the majority of the country’s sugar crop at prices well above those of the free market. By the late 1980s, nearly three-fourths of Cuba’s trade was conducted with the Soviet Union on these highly beneficial terms.324

When this financial assistance and trade relationship ended, the loss of income triggered a severe economic crisis, causing the Cuban economy to decline by 35–50 percent between 1989 and 1993. The collapse resulted in widespread shortages of essential goods, power, and transportation. In response, the Cuban government began to relax controls on private enterprise, permitted the circulation of U.S. dollars, and promoted foreign investment, particularly in the tourism sector, to stabilize the economy.531