Lo informal: Habaneros In Between System and Struggle - Navigating Cuba´s Economy as a Möbius Strip

Abstract

Since the collapse of the Soviet Union, Cuba has faced persistent economic stagnation. The sudden loss of subsidies from the Eastern Bloc, combined with a tightened embargo imposed by its northern neighbor, the U.S., has resulted in a society where state structures alone are insufficient to meet the population’s basic needs. Today, these structural weaknesses have been further intensified by the COVID-19 pandemic and the decline in tourism, leading to record-high inflation, new waves of mass migration, and worsening shortages across all aspects of daily life. In this context, economic informality - referred to by Cubans as <i>lo informal</i> - is an embedded social structure that fosters resilience, adaptability, and, in some cases, even upward mobility. While the centrally planned economy persists, formal employment and wages paid in Cuban pesos fail to secure livelihoods, forcing most to engage in informal economic activities to meet basic needs. This study explores how individuals across diverse social and professional backgrounds navigate scarcity and economic uncertainty by relying on social networks and daily improvisation. It conceptualizes Cuba’s economy as a <i>Möbius strip</i> - a continuous interplay between formal and informal sectors, not as distinct entities, but rather as interwoven and mutually dependent, often blurring the lines between legality and illegality. Findings illustrate how Cubans engage in informal economic activities such as pilferage of state resources, informal tourism-related labor, and digital entrepreneurialism as coping strategies within a rigidly controlled economy.