In a bid to lure foreign investments and capital from the Cuban diaspora, Miguel Díaz-Canel announced on Friday a series of economic reforms aimed at reducing bureaucratic hurdles and granting more autonomy to local municipalities and state-run enterprises. This comes as Cuba faces one of its most severe economic crises in decades.
These statements, reported by Cubadebate during an interview with the Presidential press team, follow a deadline by Washington urging foreign companies to sever ties with GAESA, the military conglomerate that controls approximately 40% of Cuba's economy. This ultimatum triggered the withdrawal of several international hotel chains.
Transformative Measures for Economic Recovery
Díaz-Canel detailed that the new measures will allow municipalities to "import and export without higher-level approval, manage foreign currency income, and attract investments from both foreign companies and Cuban expatriates."
State enterprises will gain the ability to bypass intermediaries, directly export and import goods, retain a portion of earned foreign currency, engage in currency exchange markets, and independently choose their clientele and suppliers.
Supporting Small Businesses and Agriculture
The President also announced expedited approvals for small and medium-sized enterprises (SMEs) with pending applications, with decision-making powers decentralized to local municipalities. A new legal framework is promised to instill "confidence for both Cubans and foreigners" in the realm of foreign investment.
Agriculture is not left out, as the plan includes enabling producers to access the supply market directly, open avenues for foreign investments in agriculture, and the ability to hold real foreign currency accounts in banks.
Long-term Vision Amid Economic Collapse
Framed within the Economic and Social Program for 2026, which will undergo public consultation later in 2025, Díaz-Canel emphasized that the proposals are nearing final approval by the Political Bureau and the National Assembly. The initiative incorporates artificial intelligence and insights from Chinese and Vietnamese economic models.
Implicitly acknowledging the dire situation, Díaz-Canel admitted, "Without wealth, it is very difficult to progress," emphasizing the need for collective efforts to stimulate productivity, create wealth, and distribute it with social fairness.
The announcement arrives as the economy spirals further: tourism plummeted by 55.8% in the first four months of 2026, energy imports fell between 80% to 90%, and The Economist Intelligence Unit forecasts a 7.2% GDP decline in 2026, marking a 23% cumulative contraction since 2019.
Challenges to Credibility and Sanctions
Despite these promises, structural challenges remain. Cuban-American businessman Carlos Saladrigas warned on Wednesday, "There will be no investment in Cuba without political change," while economist Pedro Monreal remarked last month that Cuba "missed the train of reforms seen in China and Vietnam."
Compounding the skepticism, the U.S. Office of Foreign Assets Control (OFAC) sanctioned Díaz-Canel, his wife Lis Cuesta Peraza, and his stepson Manuel Anido Cuesta on June 4, further eroding investor confidence in a government whose top officials are blacklisted by Washington.
Understanding Cuba's Economic Reforms
What economic reforms has Cuba recently announced?
Cuba has unveiled reforms to attract foreign investments, reduce bureaucratic red tape, and enhance the autonomy of local municipalities and state enterprises. This includes allowing direct import and export activities and retaining foreign currency earnings.
How does the U.S. sanction of Díaz-Canel affect foreign investment in Cuba?
The sanctions imposed by the U.S. on Díaz-Canel and his family members add a layer of mistrust for potential investors, as it underscores the political and economic complexities of engaging with a government under international sanctions.
What are the main obstacles to Cuba's economic recovery?
Key challenges include political instability, lack of economic reforms similar to those in China and Vietnam, and external pressures such as U.S. sanctions that impact international business relations.