The role of international development banks in the reconstruction of Cuba

By Francisco J. Diaz Pou · July 25, 2026

At the conclusion of World War II, the extent of devastation experienced by the warring nations became unmistakably clear, except for those situated in the Western Hemisphere. The victorious Allied powers were confronted with a worldwide crisis, characterized by its extraordinary scale, prolonged duration, and intricate challenges.

The aftermath of World War II left many nations in a state of severe economic, institutional, and social collapse. The process of recovery demanded the mobilization of vast financial, social, and political resources from the Allied powers. Restoring these nations was not a task that could be accomplished swiftly. Instead, it required a prolonged and sustained commitment that lasted for over a decade. Most of the countries undertaking this enormous challenge operated under the liberal democratic model, which was predominant in North America and Western Europe.

The need for a lasting institutional response

The greatest risk of this multinational effort was that political and economic support would weaken over time. The inherent dynamics of democratic systems, subject to changes in government, partisan disputes, and shifts in national priorities, made it necessary to create a mechanism capable of sustaining international cooperation regardless of regional or short-term interests.

The solution was to promote the creation of supranational entities tasked with managing the reconstruction process and, in time, shaping the international economic system that would emerge after the war.

Bretton Woods and the new international economic framework

The United Nations Monetary and Financial Conference, held in Bretton Woods in 1944 and organized by the Allies toward the end of World War II, laid out the foundations for what became known as the new international economic order. Although this framework has undergone numerous adjustments, its main institutions have influenced the global economy for the last eighty years. Given the initial success in the territories that were part of the theater of operations of the war, it was decided to expand its technical and financial assistance to developing countries worldwide.

The central purpose was to promote economic interdependence and prevent a recurrence of the financial, commercial, and monetary crisis that had contributed to the rise of international tensions in previous decades. Among its most important results were:

The creation of the International Monetary Fund [IMF] aimed at promoting the stability of exchange rates and international financial flows.
The founding of the International Bank for Reconstruction and Development [IBRD], later integrated into the World Bank Group, whose initial purpose was to finance the reconstruction of infrastructure in countries affected by the war.
The beginning of negotiations that led to the General Agreement on Tariffs and Trade [GATT], designed to reduce imbalances in international trade caused primarily by tariff disputes between countries.

Cuba and the organizations that emerge from Bretton Woods

Cuba participated in the Bretton Woods Conference and was a founding member of the three organizations created by that new framework for international cooperation. In fact, the first preparatory meeting for the General Agreement on Tariffs and Trade was held in Havana.

In 1948, at the request of the Cuban government, the IBRD conducted a study of the national economy and formulated several recommendations. These included the creation of a central bank responsible for implementing the country’s monetary policy and the establishment of development banks aimed at boosting agricultural and industrial production.

In 1950, the IBRD sent an economic and technical mission to conduct a more comprehensive study of the Cuban economy. Upon completing its work, the mission prepared a report that identified the country’s main economic problems and outlined viable development projects. To this end, it relied on the cooperation of government and civil society entities, including specialists such as Ramiro Guerra, Julian Alienes and Casto Ferragut. Furthermore, at the request of the Cuban government, the international firm Price Waterhouse & Co. assessed the state of public finances, and this work was incorporated into the mission’s analysis.

The IBRD report became popularly known by the surname of the mission’s head, Francis A. Truslow. The document was widely debated, and several of its recommendations began to be implemented.

During the economic expansion of the 1950s, Cuba received technical assistance from the IBRD and the IMF. Likewise, newly created development banks, such as BANFAIC, received loans from these entities, guaranteed by the National Bank of Cuba [central bank], to finance part of the trade deficit generated by their development projects.

Institutional breakdown and financial isolation

The Castro regime’s main argument for justifying Cuba’s current disaster has been the so-called US embargo. However, financial isolation began to take shape internally as soon as the Castro family took control of the country in 1959.

At the beginning of the revolutionary process, the Castro brothers decided to sever ties of assistance and financial cooperation with the IMF and the IBRD. Furthermore, Cuba did not participate in the founding of the Inter-American Development Bank [IDB] in 1960.

The financial and technological isolation experienced by Cuba was directly imposed by the Castro regime. This approach drew inspiration from the actions of Joseph Stalin, who, in 1945, prevented the Soviet Union from joining international organizations out of concern that increased economic interdependence could diminish his absolute authority. Cuba thus began its own isolation before the rupture of diplomatic relations with the United States and before the Cuban Missiles Crisis of 1962.

While other countries in the Western Hemisphere have received technical and financial assistance from international development banks, Castro’s Cuba has demonized these institutions for more than six decades.

Priorities for national reconstruction

Cuba is currently experiencing a severe economic implosion, the effects of which have escalated into a humanitarian crisis of immeasurable proportions. This dire situation stems from chronic mismanagement of public affairs by the Castro regime for more than sixty years. Confronted with the consequences of its own governance, the regime now finds itself lacking the essential tools and credibility required to address and resolve the crisis it has created.

The group appointed to lead Cuba in its national reconstruction, after the current regime relinquishes absolute authority, carries an immense responsibility. To effectively confront the ongoing humanitarian crisis, these leaders will need to develop and implement strategies that span three critical periods: the short, the medium, and the long-term.

Addressing the urgent needs of the Cuban population is the priority in the national reconstruction process. In the immediate aftermath of regime change, critical challenges such as widespread famine, unsanitary living conditions, and the erosion of basic standards of life must be confronted directly. A comprehensive assistance plan will be required to provide rapid relief and restore fundamental living conditions.

To effectively address Cuba’s urgent humanitarian needs the new government must establish itself as a credible authority. This credibility is essential for rallying the support of the Cuban diaspora, whose involvement will be pivotal in providing relief and assistance to the island’s population. Additionally, the government should formally request immediate assistance from the United States on securing essential foodstuffs—including wheat, rice, vegetable oils, and dairy products—from the established food assistance programs designed for regions facing similar crises.

Reintegration into the international development banking system

The new governing body should immediately begin negotiations with the IMF and the World Bank Group to request Cuba’s reintegration into these institutions. In addition, manage its incorporation into the Interamerican Development Bank [IDB].

The IMF could launch a technical and financial cooperation program to support the formulation and implementation of monetary and fiscal policies. Its participation would also add a framework of essential institutional discipline, absent for decades in a system where economic resources have been subordinated to political priorities rather than sound economic management.

Likewise, the IMF could assist in the re-establishment of national development banks to provide essential financing to the agricultural and industrial sectors. Due to the prolonged isolation fostered by the Castro regime, public finance officials will need technical support to reach the required level of professionalism in implementing these policies.

The World Bank Group and the IDB should play a significant role in financing the rebuilding of the country’s physical infrastructure. This work should include, among other areas, the construction of hospitals, the rehabilitation of water and sewage systems, and the modernization of public transportation in its various forms.

The participation of these supranational organizations would guarantee greater continuity to the reconstruction process for decades and contribute to the sustained development of the Cuban economy. Without their support, the country’s growth and institutional modernization would be slow, unstable, and resulting in higher economic and social costs for the Cuban people.

Re-establishing relations with these organizations will require the new Cuban government to accept their rules of operation. Such an interdependent relationship necessitates close oversight of the programs they fund or sponsor.

Historical lessons and the role of the United States

The prevailing opinion among Russian historians and analysts who have studied the disintegration of the USSR is that its client states, such as Cuba and Syria, drained resources indispensable for Soviet development. The autarky imposed by Stalin at the end of World War II deprived the USSR of the sophistication and experience necessary to manage and supervise development and economic assistance projects. This weakness allowed client states to manage the financial aid they received with broad discretion.

Over more than eighty years, the international development banks have refined and optimized their assistance programs, which is why donor countries often prefer this vehicle to support nation-building processes.

In the case of Cuba, the United States alone lacks the necessary administrative structure to operate the type of assistance provided by development banks. Its contribution could focus on specific and rapidly implementable measures, such as granting preferential tariffs treatment, providing agricultural technical assistance, and eliminating federal laws and regulations that hinder the free exchange of goods and financial resources between the two countries.

In short, international development banks would be the main instrument to assist the new government in the monumental task of national reconstruction. Their participation would also offer guarantees for foreign investment by reducing the risk of government abuses like those that have characterized Cuba for the past sixty-seven years.