Cuba's Communist Party has approved a series of unprecedented market-oriented economic measures as part of an emergency economic relief package. The reform package was presented to the country's National Assembly on July 17 and is almost certain to pass.
The plan expands opportunities for private enterprise and creates measures to attract more foreign investment, including from Cubans abroad. It could also pave the way for private real estate development on the Caribbean island and transform state-owned enterprises into private commercial joint ventures with shares and capital contributions. Additionally, the reform package allows private banks to enter the financial sector, which was previously dominated by the state.
This reform marks a major shift for Cuba, a country led by the Communist Party. Speaking to the Central Committee in a broadcast on July 17, President Miguel Diaz-Canel argued that the country's dire economic situation cannot be solely blamed on external pressure.
For decades, the U.S. has imposed a trade embargo on Cuba, weakening its economy. Since January, U.S. pressure has intensified as the Trump administration blocked fuel shipments to the island.
However, Diaz-Canel acknowledged that part of the current economic difficulties stem from domestic factors, citing “obstacles that do not come from outside, nor from the blockade.” He pointed to “slowness, bureaucracy, and norms that prevent those who want to produce” as well as “decisions that we have delayed.” “The situation demands urgent and necessary changes,” he said.
The same day, the European Union (EU) also increased pressure on Cuba by passing a resolution calling for sanctions against Diaz-Canel and the head of Grupo de Administracion Empresarial SA, a business conglomerate run by the Cuban military. The EU resolution condemned what it described as the Cuban government's “systematic repression” while calling for “far-reaching economic and political change.”
In his speech, Diaz-Canel indicated that some hardliners within the Communist Party oppose this emergency economic plan. The Communist Party has officially led Cuba since 1965. Some reforms, he said, “will not have absolute consensus, but they cannot be delayed.” Former Cuban leader Raul Castro, who was indicted by the U.S. in May, also supports the plan.
Trump administration officials, particularly Secretary of State Marco Rubio, have repeatedly stated that economic reforms could ease Washington's pressure campaign on the island. However, the U.S. has not yet responded immediately to these latest moves.
Meanwhile, U.S. Vice President JD Vance was asked on July 17 whether the Trump administration would shift its focus to Cuba after reaching a memorandum of understanding to end the war with Iran. Trump has repeatedly mentioned both military attacks and what he calls a “friendly takeover” of Cuba. Vance responded that Washington wants the Cuban people to be “happy and successful.” “We are actually talking to the Cuban government right now about how they can change their path,” Vance said. “If they make smart decisions, we will have a much better relationship with that island.”
