Caribbean & Central America - July 2026

On 12 June, with the economy in free fall, the Cuban government announced a package of 176 sweeping economic reforms, described as the most significant set of changes since the 1959 revolution. But success is far from guaranteed.

Taken together, the measures are intended to decentralise the economy and encourage private sector activity and investment. About 80% of GDP is in the public sector, on estimates cited by French newspaper Le Monde, so expanding private enterprise is a major undertaking. Launching the measures, President Miguel Díaz-Canel admitted past failings including “slowness, bureaucracy, and rules that impede those who want to produce.” He said Cuba will now seek to follow the successful economic models of Vietnam and China.

Politically, there were signs of a new resolve. The ruling Partido Comunista de Cuba (PCC) and former president Raúl Castro (2008-2018), who is widely considered to have the final say on the island, have backed the changes. The normally slow-moving national assembly approved the package in less than seven days. Breaking with previous form, the government has set up an advisory board to monitor the changes formed by three independent economists and two pro-government officials.

• Scepticism

Independent analysts have also expressed doubts about the government’s ability to make the economic reform package succeed. They note that many of Cuba’s existing foreign investors in mining and tourism are already leaving because of political risk, the economic crisis, and energy shutdowns. They also point to long implementation delays. After years of discussion, for example, the decision to introduce a single exchange rate has yet to be fully executed.

The package is made up of various elements:

• A major expansion of the private sector. Larger private companies employing more than 100 staff to be permitted; entrepreneurs to be allowed to own multiple businesses.
• Transformation of state-owned companies. State-owned companies to be converted into shareholding corporations, with investors able to take equity stakes. Legislation will allow bankruptcy proceedings and restructuring.
• Opening to foreign investment. Conditions to be made more favourable for foreign investors to partner with Cuban entities. Investors to be sought in tourism, energy, infrastructure, and agriculture. Government will actively encourage overseas Cubans to invest.
• Legalisation of private banking. Private banks to be permitted and allowed to offer financial services.
• Creation of a “market-based foreign exchange system”. This will be digital and private sector-driven; there will also be a gradual devaluation of the Cuban peso towards more realistic market values.
• Reduction of universal subsidies. Blanket subsidies to be phased out and replaced by targeted help for the more vulnerable. Utility tariffs to rise closer to actual costs.

Other measures include labour market deregulation, private real estate development, and agricultural reforms. There is a general commitment to downsize the public sector.

To be fully successful the reforms would need the decades-long US trade embargo to be lifted. A US State Department spokesperson was cited by UK newspaper the Financial Times as indicating that there was little chance of that happening in the short-term, describing the reforms as no more than “superficial” and adding “this is part of the dictatorship’s handbook: announce a cycle of supposed reforms to insinuate a desire for change, then quickly roll back any changes the moment the regime’s total control is at all threatened.”