U.S. Secretary of State Marco Rubio Calls Cuba a 'Failed State'
U.S. Secretary of State Rubio: Cuba has long since collapsed
U.S. Secretary of State Marco Rubio stated that Cuba has "long since collapsed" and is a "complete failed state" with a non-functioning economy, while the rulers continue to promote a revolution that has been "dead for 20 years" and has never succeeded.
He distinguished between the ability to suppress and the functionality of the state: the authorities can still imprison and kill, but it is not an effectively functioning government. Any profitable sectors are controlled by the military and the Communist Party, enriching a few. He noted that nearly 20% of the population has left since 2021 and expressed hope that some among those wielding power would see reality and change course. Concurrently, President Donald Trump referred to Cuba as an "absolute failed state" at the United Nations General Assembly, predicting its collapse, which led to the Cuban delegation leaving midway, with Foreign Minister Bruno Rodríguez Parrilla denouncing it as a lie and denying the existence of formal negotiations.
In a congressional hearing, Rubio stated that the military holding company GAESA dominates about 70% of economic activity and controls approximately $18 billion in assets, with profits not remitted to the treasury. He pointed to long-term power outages and fuel shortages, asserting that the economic model "will never work." After the interruption of free oil from Venezuela, he mentioned that Cuba had resold about 60% of its oil for profit instead of repairing power plants. In August, he told the media that policies require patience, suggesting that the regime might last until after 2028.
During the UN General Assembly, he also stated that over sixty years of failed management, corruption, and incompetence cannot be reversed in six months, and that under the current governance model, no one is willing to invest. Washington claims to have contacted the Cuban side, proposing conditions for economic recovery, but believes that unless there is a change in personnel or mindset, reform is impossible. The Cuban government denies any negotiations.
For the U.S., a failed state combined with hostile forces just 90 miles away is considered a security issue and is linked to immigration overflow. Increased sanctions, disruption of oil sources, and pressure on the tourism industry are part of the same set of pressure tools. Havana, on the other hand, attributes the crisis to the blockade.
In market mechanisms, this is a re-pricing driven by political characterization, not trade normalization. Buyers are exiled capital betting on entering after a regime change and companies from third countries; sellers are military groups still controlling hotels, currency exchange, and imports. The current outflow of funds is from population and remittances, while inflows are foreign exchange that maintains repression. Beneficiaries are Miami capital treating Cuban assets as options, while pressures are on domestic consumption, the power grid, and state-owned enterprises still accounting at official exchange rates. The characterization itself does not change the immediate output of sugar, nickel, and tourism.
Source: Public Information
ABAB AI Insight
Rubio's characterization of Cuba as a failed state is not new. During Trump's first term, sanctions and travel restrictions were used to pressure tourism foreign exchange; in the second term, this was compounded by the contraction of Venezuelan oil supplies. GAESA has incorporated hotels, retail, and currency exchange into military accounts, depriving the national treasury of profits, which is a survival structure formed after the special period of the 1990s: the regime uses military companies to exchange for hard currency and maintains cities through rationing. The population has accelerated outflow since 2021, thinning both the labor force and the tax base.
The capital path is clear. Profitable ports do not contribute to the treasury but go into military-controlled entities; remittances and immigration have become family balance sheets. The U.S. seeks reform in exchange for easing tensions, with the condition of simultaneous political and economic loosening. The Cuban side wants oil and tourism to return, sanctions to ease, and the system to remain unchanged. When both sides cannot reach an agreement, the only continuous flow is people. Exiled capital treats future privatization as an option but does not heavily invest in physical assets under the current system.
Comparing to the early 1990s in the Soviet periphery and Venezuela in the 2010s: the repression machine is still in place, and public services are the first to stop. Unlike Eastern Europe, Cuba lacks negotiable opposition organizations and executable timelines for property reform. The industry phase is about controlling the aftermath, not transformation. Only those who first acknowledge that the revolutionary narrative is dead can talk about rewriting investment laws.
Structural judgments belong to the overlay of regulatory changes and industry chain standstill. The U.S. writing "failed state" into diplomatic and legal language is to provide a basis for sanctions, shipping insurance, and immigration handling. Mechanically, state failure does not equal regime collapse: the machine that can imprison people can continue to operate even after the power grid collapses. What truly re-prices is the speed of foreign exchange depletion, not speeches.
ABAB News · Cognitive Law
Being able to arrest people does not mean the state is still functioning
If the foreign exchange-generating sector only enriches the regime, the treasury is already bankrupt
When the population leaves first, reform negotiations will turn into empty accounts against empty accounts