Listen to this article
Average 4 minutes
The audio version of this article was created by AI-based technology. It can be mispronounced. We are working with our partners to continuously review and improve the results.
Cuba’s prime minister on Thursday presented lawmakers with sweeping reforms backed by the Communist Party and the former leader. Raúl Castro would trade a large part of the country’s socialist economy in order to survive the sanctions imposed by the United States.
These measures, if approved by lawmakers and implemented, could represent the biggest change in Cuba’s social model since the revolution of former leader Fidel Castro in 1959 and a major shift toward a market economy.
These reforms will open the door to private real estate development on the Caribbean island, transform state-owned enterprises into private enterprises with shares and equity stakes, and allow private banks to enter Cuba’s once state-dominated financial sector.
They will also allow “the sale of government-owned properties to national and foreign law enforcement agencies and individuals, including Cubans living abroad,” according to a televised presentation to lawmakers — a major change in a country where the state has long controlled land and industry.
Air Canada, Air Transat and Sunwing Vacations, the group that includes WestJet, have announced that they will permanently suspend Canadian flights to Cuba. Air Transat says the “current situation in Cuba” is the reason for this decision. Major Canadian airlines first suspended flights to Cuba in February. Cuban-Canadians in Toronto are still worried about families facing uncertainty about electricity and gas shortages in the country. CBC’s Lorenda Reddekopp has the latest.
Prime Minister Manuel Marrero told lawmakers that the measures consider the market “a tool for fair distribution of resources,” a highly unusual concession from a senior official of Cuba’s Communist Party.
But he made the proposed reforms true to Cuba’s socialist roots.
“These changes do not constitute a deviation from our socialist project; rather, they respond … to its development,” Marrero said. “The renewal of the economic and social model has the important purpose of improving the quality of life of our people.”
A list of more than 175 measures, presented in a nearly two-hour speech by the prime minister, now requires a vote by the National Assembly.
Debate and discussions on the measures began at the meeting immediately after their introduction.
It was not immediately clear how quickly, or in what ways, the new set of measures would be implemented, leaving many questions unanswered amid the legislative debate.
Pressure from the US
Many of these open proposals have appeared, inside and outside of Cuba, for years, but intense pressure from the United States has pushed them forward again.
Cuba’s state-run economy, formal and dysfunctional, has struggled to provide for its people since the fall of the Soviet Union, which long ago helped write Cuba’s name for socialism.
But the Trump administration’s heavy-handed sanctions — including a months-long oil embargo — have now left Cuba with no room to repair itself, hurting its already ailing economy, forcing out foreign businesses and destroying its vital tourism industry.
The US State Department did not immediately respond to a request for comment.
Longtime Communist Party leader Raúl Castro – who was indicted in May in the United States – threw his weight behind the measures, which would reverse many of the social reforms implemented after the 1959 revolution.
In a written letter presented first to the politburo on Wednesday and later to lawmakers on Thursday, he called them “beneficial” and urged their immediate implementation.
Many opportunities for independent business
The reform package will significantly reduce the prominence of state-owned enterprises in Cuba while introducing private businesses that have long been restricted by a regime that is cautious about private capital.
Cuban businesses, for the first time, are allowed to hire more than 100 workers. Entrepreneurs will also be allowed to own multiple independent businesses – one first.
Marrero said the movement of private funds will be driven by a private, supervised, government-directed banking system, and a real-time digital currency exchange market with authorized agents.
Cuba has long provided its citizens with well-subsidized public services, including free or low-cost education, medical care and transportation. Many of those services in recent years have collapsed amid government inefficiencies and a faltering economy.
The new measures will establish a new tax system and make public enterprises and private companies, foreign and domestic – partly responsible for underwriting public services.
