MercoPress. South Atlantic News Agency

Díaz-Canel unveils reforms to liberalize Cuba's economy amid an oil crisis and US sanctions

The reform also envisages a reduction of the state apparatus —from 27 to 20 ministries, according to a draft law— to cut spending and finance a future salary reform

Cuba's President Miguel Díaz-Canel on Friday announced a broad package of economic reforms, under the so-called Economic and Social Program for 2026, to confront one of the most severe crises in the island's recent history, amid strong pressure from Donald Trump's government. “These are times when we have to change,” the president said, without specifying an entry-into-force date or the legal norms that will underpin each measure.

The core of the plan is an unprecedented decentralization of the state apparatus. Municipalities will be able to manage their own foreign-currency income, decide on their companies and economic actors and even carry out foreign-trade operations without state intermediation. State enterprises will gain autonomy to design salary systems without caps, reinvest profits, import and export, and take part in the foreign-exchange market. The package also authorizes investments by Cubans living abroad on equal terms, opens more sectors to the private sector —the small and medium-sized enterprises known as mipymes— and provides for replacing product subsidies with aid targeted at vulnerable people, instead of the current ration book.

The reform also envisages a reduction of the state apparatus —from 27 to 20 ministries, according to a draft law— to cut spending and finance a future salary reform. In tourism and real estate, the government seeks to bring in “new actors” to make use of the infrastructure after the withdrawal of major hotel chains, such as Meliá and Iberostar, which left the island over US sanctions. Faced with fuel shortages —Díaz-Canel admitted that in the last five months “only one oil ship has entered Cuba”— the plan promotes the transition to renewable energy and the assembly of electric vehicles.

Díaz-Canel presented the shift as a response of resistance to the US embargo. “The United States cannot forgive that, at this point, with all the maximum pressure they have exerted, the Revolution still exists and the country keeps functioning,” he said, though he warned that the changes will maintain political control: “The enemy is lurking,” he said.

The announcement comes amid an aggressive pressure campaign by Washington, which has restricted the flow of crude to the island, limited its access to international banking —with the exit of operators such as Visa and Mastercard— and tightened sanctions against the military conglomerate GAESA, which controls much of the economy, and against the political leadership, including Díaz-Canel himself and former president Raúl Castro. Trump has gone so far as to speak of a “friendly takeover” of the island. “We have spoken with them and told them what they need to do to recover their economy,” Secretary of State Marco Rubio said in early June.