Cuba proposes sweeping market reforms to rescue economy under US sanctions

A historic turn under duress

On Thursday, Cuban Prime Minister Manuel Marrero laid out 176 reform proposals before the National Assembly, a package that would mark the most far‑reaching change to the island’s socialist model since the 1959 revolution. The measures are explicitly presented as a survival strategy against US sanctions that have cut off oil supplies, driven away foreign businesses and shattered tourism.

President Miguel Díaz‑Canel warned the Communist Party politburo that delay was not an option.

“We need to unleash production, to have more output and less restriction.”

Former President Raúl Castro, indicted in May by the United States on murder charges, broke with his usual reserve to write a letter backing the plan as “beneficial” and urging swift action.

The 176‑point package

Marrero’s two‑hour address detailed a shift that goes well beyond the small‑ and medium‑enterprise openings allowed in 2021. Private companies with more than 100 employees will be permitted for the first time, and Cubans will be able to own multiple businesses. State‑owned enterprises are to be turned into commercial ventures with tradable shares; private banks may enter a sector once reserved for the state.

Real estate development is also being opened to private investors, including in heavily restricted zones such as Old Havana and the Los Cayos archipelago. Tourism, agriculture and the foreign‑exchange market are to be liberalised, alongside a reduction in government ministries from 27 to 21 and greater fiscal autonomy for municipalities.

“The market is an instrument for the efficient allocation of resources.”

Pressure from Washington

The overhaul is a direct response to the Trump administration’s intensifying economic war. An oil embargo imposed in December 2025, coupled with the US‑orchestrated capture of Venezuelan President Nicolás Maduro in January 2026, dried up Cuba’s main fuel supply. The result has been days‑long blackouts, shortages of food, medicine and drinking water, and a tourism sector in free‑fall.

US Vice President JD Vance signalled a wait‑and‑see approach.

“If they make smart decisions, we’re going to have a much better relationship with that island.”

Inspiration from Asia

The Cuban leadership says the reforms draw explicitly from the example of China and Vietnam, two single‑party states that embraced market mechanisms while retaining political control. Díaz‑Canel argued that economic opening need not threaten the Communist Party’s monopoly, a lesson he said had been proven in Asia.

“Cuba has creatively and heroically resisted, but has endured a barbaric, undeserved and unbearable punishment for too long, to which the threat of military aggression has now been added.”

What happens next

Cuban economist Daniel Torralbas, based in London, called the package “the most profound economic reform programme since the revolution of 1959” and a genuine departure from cosmetic adjustments. The National Assembly vote, expected later on Thursday, is widely seen as a rubber stamp in the one‑party system. No timeline for implementation has been given, and the government itself brands the measures not as reforms but as “economic and social transformations” that preserve the principles of the 1959 revolution.