Cuba announces market-oriented reforms modelled on China and Vietnam, citing unsustainable status quo and US pressure
President Miguel Díaz-Canel said further economic sectors would be opened to private enterprise, approvals streamlined, and the state apparatus restructured, while holding up China and Vietnam as templates for a socialist market economy.
The announcement
President Miguel Díaz-Canel used a televised address on Friday to promise the most sweeping liberalisation of the Cuban economy in years. Further sectors would be opened to private companies, the business licensing process streamlined, changes made to agriculture, and the state apparatus restructured. The reforms would be "bald diskutiert und sehr zügig verabschiedet," he said, without giving a detailed timeline.
It is now time for change. The country simply cannot continue on its current course.
Equal footing for private investors
Since 2021, Cuba has allowed private enterprises with up to 100 employees, and since February they have been permitted to import fuel, a sphere previously reserved for the state. Now the government wants private Cuban businesses to invest on the same terms as foreign investors, and is specifically targeting the diaspora. It is also considering abolishing state intermediaries for imports and exports.
The US pressure backdrop
Washington has ramped up sanctions month after month. This week it targeted state oil company Cupet, adding to earlier sanctions on Díaz-Canel and his family. President Donald Trump has repeatedly threatened to "take control" of the island. Cuban officials accuse the US of seeking a pretext for military action. The embargo has been in place since 1962, and the country is suffering its worst crisis since the Soviet collapse, with frequent blackouts and fuel shortages.
The Chinese and Vietnamese template
Díaz-Canel explicitly named the socialist market economies of China and Vietnam as the model. The shift aims to resolve long-standing tensions between central planning and economic incentives.
The proposed measures will make it possible to resolve the long-standing contradictions between central planning and incentives.
What comes next
The Politburo of the Communist Party and the National Assembly still have to approve the package. No floor vote date was given, but Díaz-Canel insisted the reforms would be adopted quickly. Some foreign investors recently left, fearing US secondary sanctions, so the speed of implementation will be watched closely abroad.
