The Cuban authorities have presented and approved in record time, just one week, the largest package of economic reforms in at least 15 years. These hundred measures are presented as the way to confront the deep crisis suffered by the island and the demands of Washington.
In just seven days, the president of Cuba, Miguel Diaz-Canelhas announced by surprise the measures that the plenary session of the Central Committee of the Communist Party (PCC, the only legal one) has supported and an extraordinary session of the National Assembly of People’s Power (ANPP, unicameral legislative) ratifies them.
“Reality imposes urgent and necessary changes on us. And when the life of the people becomes so hard, the first duty of the PCC of Cuba and the revolutionary Government is not to better explain the crisis; but to change what needs to be changed to get out of it,” he stated before the Central Committee.
Likewise, Díaz-Canel assured this Thursday that Cuba “is experiencing the most difficult hours of this century” and that “It’s time to change everything that needs to be changed”a historical moment that “demands transformation.” “Cuba changes to rise up! Cuba changes to live better! Cuba changes to remain free!” he exclaimed to close his speech. These phrases are not the result of spontaneity. They refer to some of the allusions that Fidel Castro made during a speech in 2000.
This plan represents a before and after in the statist and centralized economic system of Cuba, by seeking to open and decentralize an economy exhausted and paralyzed by internal factors and, especially in the last six months, by
Although also since the presidency of Raúl Castro (2008-2018) the Cuban Government had made reformist approaches and announcements that were subsequently not applied, were reduced in scope or remained largely mired in a bureaucratic tangle.
It is difficult to foresee the consequences of these movements. Some analysts point towards a scenario in line with the transformations of systems such as the Chinese and Vietnamese, while others warn about the possibility that the island becomes more oriented towards an economic regime like the Russian one.
The historic reforms
Although the Cuban government keeps these measures deeply secretive, they range from the entry into the tourism sector of “new actors” in “new modalities” to the promotion of foreign direct investment (especially for non-resident Cubans), through measures to expand the role of the private sector.
They also contemplate changes that would lead to boosting agriculture, foreign trade and the real estate sector, in addition to decentralizing decision-making and providing greater “autonomy” to state companies and municipalities.
Likewise, it seeks to end the serious distortions of the monetary system (with two currencies, three official exchange rates and a dominant informal rate), adjust the tax system and even end universal subsidies for basic products (to move towards subsidies for people, only for vulnerable groups).
The Prime Minister, Manuel Marrero, has defended the initiatives before the Cuban parliament. He has spoken of “strategic impact measures” that in no way pervert the socialist character of the Cuban economic system, but are “a condition for its preservation.”
More reforms
These, furthermore, As has been revealed EfeDíaz-Canel has launched a group of experts (which includes non-governmental economists and critics) to propose new measures beyond those already approved.
Díaz-Canel has recognized that the package of measures do not constitute “new ideas”, They were proposed years ago but were not implemented, which was a “mistake”. “Cuba does not need more delays, it needs solutions. It is not about creating more offices or multiplying meetings, but about achieving concrete results,” he stressed.
These economic changes can serve two objectives at the same time: to tackle the serious structural crisis suffered by the island, which has registered a sustained contraction in the last six years.
Maximum tension
Furthermore, in an environment of maximum tension, Havana seeks to calm pressure from Washington, which demands profound political and economic changes on the island and, according to Cuban sources, has even threatened military intervention to achieve this.
Since January, Washington has almost completely prevented the entry of oil and derivatives into Cuba and has caused a rout of international companies that operated on the island (hotels, shipping companies, airlines and banks) for fear of suffering the latest round of secondary sanctions.
Likewise, agricultural and industrial production has collapsed, energy generation is collapsingprices are multiplying, macroeconomic distortions are entrenched, the peso is depreciating rapidly, and the banking system and the Cuban State are decapitalized.
The deterioration of the quality of life, progressive in recent years and accelerated since January, following the oil blockade and the additional maximum pressure sanctions applied by the United States Government, is encouraging unusual protests on the island (small and peaceful, but increasingly frequent), where pots and pans are played and the garbage accumulated in the streets is burned.
