Cuba unveils economic reforms expanding role of private sector

Cuba has outlined new steps to open key sectors of its state-run economy to private industry, as the island faces intensifying U.S. pressure aimed at forcing economic transformation.

The measures were discussed during a two-day session of the National Assembly that concluded on Thursday, July 30. They include easing restrictions on land use, allowing businesses to import fuel and medications, and authorising private tourism companies to operate more broadly on the island, Reuters reports.

President Miguel Díaz-Canel said the reforms are not intended to satisfy Washington and reaffirmed that core sectors would remain under state control.

"We are not going to implement predatory capitalism or carry out a massive privatisation of national assets, as some fear," he said in a speech on Thursday afternoon. "There will be no, and this must be made very clear, privatisation of healthcare, science, culture, or services that are strategic to the nation.”

The announcement follows the National Assembly’s unanimous approval last month of a package of 176 measures which, if fully implemented, would represent a significant transformation of Cuba’s socialist economic model in response to tightening U.S. sanctions.

Cuba has previously announced reforms that were later delayed or reversed. However, officials say implementation has begun in some areas, six months into what they describe as a severe U.S.-imposed oil blockade and a wave of additional sanctions that have raised concerns about a worsening humanitarian situation.

Prime Minister Manuel Marrero Cruz told lawmakers that Cuba has already authorised its first foreign investment venture to import and sell fuel. Nearly 200 domestic businesses have also received approval to participate in wholesale fuel distribution.

The gradual opening of the energy sector — long tightly controlled by the state — comes after Washington imposed a stringent oil blockade while simultaneously allowing U.S. fuel exports to Cuba’s private businesses, a dual-track policy aimed at weakening the state while supporting the private sector.

Lawmakers also approved a new agriculture law designed to streamline procedures for granting rights to use state-owned land. The framework will apply to Cuban citizens, foreign investors, and private Cuban enterprises. Approximately 80% of land in Cuba remains state-owned, with the remaining 20% held by private producers.

In the tourism sector, which has been severely affected by the withdrawal of international hotel operators and flight cancellations linked to fuel shortages, lawmakers adopted 10 measures to encourage private investment. These include easing restrictions on private tour operators, car rental services, and eco-tourism initiatives. Cuban officials say nearly three-quarters of the country’s hotels are currently closed.

Cuba also announced the creation of its first specially regulated Economic Development Zone, which will allow the establishment of a wholly foreign-owned company in the health tourism sector.

The legislative session followed the government’s removal on Tuesday of more than 40 restrictions on private sector activity, including measures allowing private businesses to participate in areas such as healthcare and education, which have traditionally been tightly controlled by the state. The changes will also permit private firms to import medications, amid acute shortages in state-run pharmacies.

Despite the breadth of the proposed reforms, officials cautioned that implementation would be gradual.

"The results will be achieved gradually,” Marrero said on Wednesday. “Starting now, the most important, and perhaps the most difficult, stage begins.”

By Tamilla Hasanova