Cuba Passes 176 Historic Reforms to Open Its Economy to Private Banks and Real Estate
Key Takeaways
- The National Assembly passed 176 reforms on Thursday, opening Cuba to private investment.
- Under new rules, Cuba allows private firms with over 100 staff and private real estate market investment.
- Trump’s sanctions forced Diaz-Canel to exert reforms to save the island’s crashing economy.
Cuba Backpedals On Socialism With New Economic Reforms
Cuba, one of the bastions of communism still present in the world, is now making changes to dynamize its economy, which has been hit by recent U.S. pressure.
On Thursday, the National Assembly of Cuba passed a set of 176 reforms to decentralize the Cuban economy, which has traditionally been state-driven, and open several sectors, including the financial, to private capital.
The changes would allow private investment to enter real estate development on the island, enabling the state to sell part of its properties to national and foreign individuals and institutions, walking back the state-ownership exclusivity characteristic of the communist model.
The existence of private banks, overseen by the state, would also be allowed under these new rules, as the rise of businesses in Cuba with over 100 employees. This would pave the way for the surge of large private companies.
The reforms constitute one of the most profound changes in the island’s system since the late Fidel Castro assumed office after ousting dictator Fulgencio Batista in 1959.
The changes were supported by Fidel Castro’s living brother and former President of Cuba, Raúl Castro, recently indicted by the U.S. Department of Justice for shooting down two unarmed U.S civilian aircraft operated by Brothers to the Rescue in international airspace in Feb. 1996.
The government has cited the suffering of the Cuban people, battling fuel shortages and frequent power outages, as the source of these measures.
In a speech before the assembly, Cuban President Miguel Diaz-Canel stressed that Cuba was living its most difficult hour and that the government had the historic responsibility of saving it.
“When the people’s lives become so hard, the primary duty of the Communist Party and the Revolutionary Government is not to better explain the crisis, but to change whatever is necessary to overcome it,” he assessed.
“It is time to change everything that needs to be changed,” he concluded.
These changes come after the Trump Administration has exerted pressure on the Cuban government to change its system, with President Donald Trump frequently referring to Cuba as the next target of his government.
The U.S. Department of State has sanctioned several companies key to the Cuban government, including Grupo de Administración Empresarial S.A. (GAESA), which operated as an umbrella enterprise for the Cuban military, and Unión Cuba-Petróleo (CUPET), which faces allegations of selling oil on secondary markets as the Cuban people face frequent energy outages.