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Cuba’s parliament has unanimously approved a package of economic reforms that represents the country’s most significant departure from its socialist economic model since the 1959 Revolution led by Fidel Castro.

Backed by the Communist Party and former leader Raúl Castro, the reforms pave the way for expanded privatization, private banking, private real estate development, and the growth of private businesses as the island struggles through a severe economic crisis worsened by U.S. sanctions.

Key Elements of the Reform Package

Prime Minister Manuel Marrero presented the measures to lawmakers.

The main provisions include:

Privatization and commercialization: Selected state-owned enterprises will be converted into commercial corporations with shares, allowing equity investment and granting them greater operational autonomy.

Private real estate development: The reforms expand opportunities for private real estate activity beyond previous limited property reforms. Cubans—including, in some cases, those living abroad—will be allowed to purchase state-owned properties on a case-by-case basis and develop projects in high-potential tourist areas.

Private investment in banking: Cuba will open its previously state-controlled banking sector to private investment and, for the first time, allow individuals and businesses to hold foreign currency accounts.

Expansion of private businesses: Restrictions on private companies will be eased, allowing larger operations, including businesses with more than 100 employees and ownership of multiple companies. Additional sectors will also be opened to private and foreign investment.

Decentralization and market mechanisms: Municipal governments and state-owned enterprises will receive greater autonomy, while new measures aim to attract foreign investment and revive key industries such as agriculture and foreign trade.

The reforms draw inspiration from the economic models of China and Vietnam, seeking to combine market-oriented policies with continued socialist political control.

At the same time, Cuba’s armed forces are expected to retain control over the country’s key strategic sectors.

🇨🇺 Cuba begins its largest economic reform since the 1959 revolution

The country's parliament unanimously approved radical reforms that provide for the privatization of a significant part of the economy.

The plan provides for private real estate development, the creation of… pic.twitter.com/m2eEd1F2Bs

— Visegrád 24 (@visegrad24) June 19, 2026

Background and Motivation

Cuba is experiencing its worst economic crisis in decades, marked by shortages of food, fuel, and medicine, frequent power outages, and declining productivity. Cuban authorities blame strict U.S. sanctions and what they describe as an “oil blockade” as major contributing factors, although longstanding structural problems within the centrally planned economy have also played a significant role.

The reforms are presented as a pragmatic effort to preserve the country’s political and economic system rather than abandon it.

Communist Party leaders, including Raúl Castro, have reportedly endorsed a greater role for market mechanisms to improve efficiency, attract investment—including from the Cuban diaspora—and ease the daily hardships faced by ordinary citizens.

Raúl Castro’s Role and U.S. Indictment

The reforms have the explicit backing of Raúl Castro, who succeeded his brother Fidel and oversaw earlier rounds of gradual economic liberalization during the 2010s, including the expansion of self-employment and limited property sales.

The announcement comes shortly after the United States indicted Raúl Castro in May 2026 over his alleged role in the 1996 shootdown of two civilian aircraft operated by Brothers to the Rescue. The U.S. Department of Justice alleges that Castro, who was serving as defense minister at the time, was involved in the incident that killed four people, including three U.S. citizens. He faces charges including murder, conspiracy, and destruction of aircraft. Cuba has long defended the action as a response to repeated provocations.

Historical Context and Outlook

Cuba has pursued gradual economic reforms before. Raúl Castro’s “updating” of the economic model during the 2010s legalized small private businesses, allowed limited property sales, and expanded foreign investment. However, the current package is widely described as far more comprehensive.

Earlier milestones included recognition of private property in the 2019 Constitution and the legalization of micro, small, and medium-sized enterprises (MSMEs).

Implementation will be critical. Previous reforms were slowed by bureaucratic resistance, high taxes, and regulatory barriers. Many analysts view the new package as a high-stakes effort that could reshape Cuba’s economy while helping ensure the government’s survival.

If successfully implemented, the reforms could help reduce shortages and stimulate economic growth. However, major challenges remain, including U.S. sanctions, aging infrastructure, and the government’s effort to balance greater economic openness with continued political control.

Whether these measures deliver meaningful improvements in the lives of ordinary Cubans—as many remain skeptical—or simply stabilize the existing political system will likely become clear over the coming years.

The reforms signal a significant evolution in Cuba’s economic strategy and could reshape the island’s future as it navigates both external pressures and internal challenges.

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About The Author Maria Herrera Mellado

María Herrera Mellado es una abogada y analista política muy respetada. Licenciada en Derecho en EE.UU. y España, también tiene un doctorado en Ciencias Jurídicas y varios títulos de la Universidad de Granada (España), de la Universidad de Arizona y de la Florida International University. Con amplia experiencia en derecho internacional, asesoría en inversiones, representación en inmigración, y protección de la privacidad y lucha anticorrupción, ha asesorado a organizaciones y políticos europeos, estadounidenses e hispanoamericanos. Ha escrito sobre seguridad nacional e inmigración, protección de datos, derecho constitucional, consumo financiero y derecho bancario en revistas internacionales y coescribió libros publicados en Perú y Colombia. Es reconocida por su servicio comunitario en EE.UU. y es considerada una de las mujeres más influyentes de Florida. Es experta en varios idiomas y participa frecuentemente en debates en canales como Univisión, Fox, France 24, Telemundo y es la Editora Jefe de Gateway Hispanic.