Cuba Approves Historic Market-Oriented Economic Reforms

Cuba's Communist Party has approved sweeping economic measures that would represent a significant shift toward market-oriented policies on the island, according to statements from President Miguel Díaz-Canel and other Cuban officials. If approved by the National Assembly of People's Power (Cuba's parliament), these reforms would mark an unprecedented opening of the Cuban economy to private enterprise and foreign investment.

The proposed reforms include substantial decentralization of state power to Cuba's 168 municipalities across 15 provinces, granting them authority to approve businesses in their territories, manage foreign currency income, and engage in direct import and export activities. Additionally, a bill pending in parliament seeks to reduce the number of government ministries from 27 to 21. State-owned enterprises, of which Cuba has approximately 2,000, would gain autonomy to design their own wage systems, make unlimited use of profits, and engage in international trade and partnerships with private companies and cooperatives.

Private sector activity would be significantly expanded under the measures. The reforms aim to accelerate approval processes for small and medium-sized enterprises (SMEs) and encourage their association with state entities. Currently, more than 9,500 SMEs are registered on the island, a process that began in 2021. Private importers and exporters would no longer be required to operate through state agencies that control timelines and set prices, eliminating this intermediary role. Benefits would be provided for importing inputs and raw materials for productive processes.

Foreign investment restrictions would be substantially eased, with removal of barriers to foreign bank accounts and direct foreign investment approvals. Cubans both residing in the country and in the diaspora would be permitted to participate as economic actors alongside foreign investors, state enterprises, and cooperatives. The reforms also include elimination of agricultural restrictions, granting farmers access to input and foreign exchange markets, and expanded permits for foreign investment in food production.

A major social component of the reforms involves the gradual elimination of Cuba's long-standing libreta de abastecimiento (rationing booklet), which has provided citizens with subsidized access to products at controlled prices since the 1959 revolution. Under the new measures, subsidies—particularly for food—would be phased out, with products sold at market prices instead. This represents a fundamental change to the social safety net that has characterized the Cuban system for over 60 years.