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🇰🇷 South Korea /Economy & Trade

Cuba overhauls state-run economy, embraces China-Vietnam style reforms

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Sources not specified New plan
  • Cuba has approved 176 economic reform measures to revitalize its economy, shifting towards a market-oriented socialist model similar to China and Vietnam.
  • The reforms include liberalizing private enterprise, allowing private banks, expanding foreign investment, and granting more autonomy to state-owned companies.
  • These changes, described as the most profound since the 1959 revolution, aim to address economic deterioration exacerbated by U.S. sanctions and internal inefficiencies.

Cuba is undertaking its most significant economic overhaul since the 1959 revolution, approving 176 reform measures aimed at revitalizing a socialist economy struggling under U.S. sanctions and internal inefficiencies. The shift signals a move towards a market-oriented socialist model, drawing parallels with China and Vietnam.

The current situation demands urgent and essential changes. In a situation where the lives of the people are so difficult, the government's top priority is not to make excuses for the crisis, but to overcome it.

— Miguel Díaz-CanelPresident Miguel Díaz-Canel's remarks at the closing of the Cuban Communist Party's extraordinary Central Committee meeting, acknowledging the need for immediate economic reforms.

Key changes include a substantial overhaul of state-owned enterprises, granting them greater autonomy in wage systems, profit distribution, and import-export activities. The reforms also permit stock and equity trading within these enterprises and open up financial and real estate sectors to private investment. The government plans to introduce a private financial system and a real-time digital foreign exchange market under state supervision.

Private businesses will see relaxed regulations, including the ability to hire more employees and for entrepreneurs to own multiple companies. The government also intends to gradually reduce subsidies for basic goods and ease price controls, shifting towards direct support for vulnerable populations and introducing a new tax system to share public service funding between public and private sectors.

Obstacles are not only external or in the (U.S.) blockade. Inefficiencies, bureaucracy, and delayed decisions are making the economy difficult.

— Miguel Díaz-CanelPresident Miguel Díaz-Canel's statement highlighting internal challenges contributing to Cuba's economic struggles.

President Miguel Díaz-Canel acknowledged the "urgent and essential changes" needed, stating the government's priority is to overcome the crisis rather than make excuses. He admitted that inefficiencies, bureaucracy, and delayed decisions, not just external factors like the U.S. blockade, contribute to the economic hardship. The reforms come as U.S. sanctions intensify, leading to increased shortages and the withdrawal of foreign companies from key sectors.

The most profound economic reform since the 1959 revolution.

— Daniel TorralbaCuban economist Daniel Torralba's assessment of the significance of the approved economic reforms.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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