Cuba adopts reform program marking a historic economic shift

The Cuban National Assembly unanimously adopted on Thursday a very vast program of reforms in favor of the market economy, marking a historic turning point for the communist island in the grip of a deep economic crisis and under pressure from Washington.

More than 400 deputies of the National Assembly of Popular Power were called upon to decide on 176 proposals affecting many sectors of the economy, presented shortly before by the Prime Minister, Manuel Marrero.

The reforms were adopted unanimously by a show of hands, according to images broadcast by state television.

The measures concern in particular the organization of private and state enterprises, banks, tourism, agriculture, foreign investments, taxes, salaries and the foreign exchange market.

"This is the most profound economic reform program that has been announced in the last 70 years of the country's economic history, since the victory of the 1959 revolution," Cuban economist Daniel reacted to AFP. Torralbas, based in London.

In the years following the revolution led by Fidel Castro in 1959, large private companies, Cuban or foreign, had been nationalized, as well as small shops and family businesses.

Since then, recurring blows had been given to the dogma of the socialist economy, but without ever calling into question the foundations of a largely planned and centralized economy.

In 2021, however, for the first time in half a century, small and medium-sized businesses, capable of employing up to 100 employees, were authorized to deal with the crisis and social discontent.

There are now more than 10,000 and employ a third of the active population.

- “Drastic changes” -

Among the reforms approved Thursday include the transformation of state enterprises into commercial companies "by shares or with participation", the authorization of private companies with more than 100 employees, the participation of foreign capital in the private sector, the opening of foreign currency accounts for individuals.

Agriculture, tourism, the banking sector, the foreign exchange market will now be open to private investment, national or foreign. The latter was until then channeled in favor of state enterprises.

Cubans will also be able to own more than one private company and stakes in other companies. Salary negotiations within companies will be permitted.

"Most of the transformations that are proposed aim to expand the role of the private sector in the Cuban economy (...) and these are drastic changes, we are not talking about simple facade alterations", underlined Daniel Torralbas.

However, no timetable has yet been announced.