Nearly 70 years after Fidel Castro’s 1959 revolution, communist-run Cuba has introduced a major package of free-market reforms aimed at pulling the country out of a deep economic crisis.
The changes mark one of the most significant shifts since the revolution and signal a sharp departure from the socialist model of the one-party state, reports AFP.
“These are not cosmetic changes, they represent radical change,” said London-based Cuban economist Daniel Torralbas. He said the reforms would allow, for the first time, the creation of large private enterprises in Cuba, beyond small and medium businesses.
Since the 1960s, Cuba has operated under a centrally planned command economy. Torralbas said this system was effectively dismantled on Thursday, and was “tacitly recognised as a failure”.
From the 1990s onwards, Cuba introduced limited market-oriented measures, including property ownership rights, mainly during periods of crisis or social unrest.
However, state-run enterprises still accounted for around 80 percent of the economy until recent years.
Under the new reforms, Cubans in the country and abroad will be allowed to start businesses and buy and develop property. Foreign investors will also be permitted to invest directly without being required to partner with the state.
Economists consulted by AFP remain sceptical about how quickly Cuba can implement such broad reforms amid a worsening economic crisis and strained public services.
“Cuba hasn’t been short of announcements in recent years, what’s been missing is implementation,” said Torralbas.
He added that some measures could move quickly, while others, including foreign investment, would take more time.
Cuban economist Tamarys Bahamonde of American University in Washington questioned whether investors would trust Cuba’s financial and institutional system, especially given concerns over fiscal reliability.
She also highlighted what she described as a “hemorrhaging of human capital,” noting that more than two million people have left the country in the past five years.
The success of the reforms may also depend on the United States, which has long imposed sanctions and a trade embargo on Cuba since 1962, limiting its access to income and investment.
Torralbas said the reforms would only work fully if relations with Washington improve. He described US ties as the key factor in Cuba’s economic recovery.
However, uncertainty remains over Washington’s response, particularly under President Donald Trump, who has previously suggested a “friendly takeover” of the island.
