Despite the recent announcement of a sweeping economic reform package aimed at reviving Cuba's struggling economy with capitalist-oriented solutions, President Miguel Díaz-Canel reiterated his defense of "Cuban-style" socialism during the Third Extraordinary Session of the National Assembly of People's Power.
"We are not abandoning socialism," Díaz-Canel declared twice to regime officials and parliament members gathered in Havana, just 48 hours after the State Council called the session. The assembly formally approved 176 economic measures, including the authorization of private financial institutions, the establishment of private exchange houses, the opening of foreign investment in the non-state sector, relaxed rules for micro, small, and medium enterprises, the removal of general price caps, and a subsidy system reform, among others.
In an effort to reconcile this contradiction, Díaz-Canel appealed to a unique formula: "socialism, Cuban-style." He justified this by referencing the contributions of economists, without delving into details, and cited as a significant reference the report presented at the latest congress of the National Association of Economists and Accountants of Cuba (ANEC). He also stated that his government studied "the experiences of socialist construction in other countries" and "the ongoing debate within the country" before crafting these reforms.
Challenges and Acknowledgments
Díaz-Canel acknowledged that they are "trying to defend" the Cuban economic and social model in "an extremely complex moment," which he described as "the most challenging the revolution has ever faced," though he added that "the revolution has never had it easy."
Nevertheless, he firmly stated that the changes were inevitable regardless of circumstances: "I believe this had to be done anyway. Whether we were living this moment or not."
He admitted that the newly approved measures are not novel. "We have reached a point of maturity, a public debate in our country on how to perfect socialism, which dates back at least to the sixth party congress," he said, referring to the 2011 communist party meeting. He noted that many proposals were already included in the first version of the economic guidelines. "In other words, we had to go this way anyway," he affirmed, acknowledging that the regime has been postponing decisions it now deems essential for over 15 years, if not decades.
Internal Obstacles and Strategic Measures
The leader also pointed to internal obstacles, partially breaking from the official narrative that blames the island's economic crisis on the U.S. embargo: "There are barriers that do not come from outside or from blockades. There is sluggishness, bureaucracy, regulations that hinder those who want to produce, and decisions we have deferred."
The 176 measures approved on Thursday are organized into 23 strategic axes, resulting from the evaluation of 390 proposals, of which the regime incorporated 66.7%. Among the most significant changes are the authorization of private banking for the first time since 1959, the transformation of state enterprises into joint-stock companies, the removal of the 100-worker limit for micro, small, and medium enterprises, the creation of private exchange houses, and the gradual introduction of Value Added Tax (VAT).
According to official media, former President Raúl Castro participated via video conference in the extraordinary session of the National Assembly and supported the transformations, though he issued a warning that encapsulates accumulated skepticism: "As important as the approval of these transformations is their proper and timely implementation."
Public Reaction and Economic Outlook
The public's reaction was marked by skepticism. Phrases like "Does anyone believe them?" and "the same dog with a different collar" circulated widely on social media.
Economist Pedro Monreal described the process as "belated pragmatism" and warned that Cuba missed the opportunity to undertake gradual reforms akin to those in China or Vietnam when conditions were less adverse.
The Economic Commission for Latin America and the Caribbean (CEPAL) forecasts a 6.5% contraction of GDP by 2026, which would make Cuba the worst-performing economy in the region for the second consecutive year.
Insights into Cuba's Economic Reforms
What are some key measures of the new Cuban economic reforms?
The new reforms include private banking authorization, the creation of private exchange houses, foreign investment in the non-state sector, and removal of employment limits for small enterprises, among others.
How did the public react to Díaz-Canel's announcement of economic reforms?
The public response was largely skeptical, with many expressing doubts on social media, questioning the effectiveness and sincerity of the announced changes.
What are the economic projections for Cuba according to CEPAL?
CEPAL projects a 6.5% GDP contraction for Cuba by 2026, positioning it as the worst-performing economy in the region for the second year running.