This past Friday, economist Pedro Monreal responded to the recent announcement of a new set of economic reforms by Miguel Díaz-Canel, labeling it as "belated pragmatism with no apparent coherent connection between the measures." He warned that without first establishing "a moderately functional framework for international integration, none of the other initiatives would prove effective."
Monreal criticized the government's notion that these proposals could bring about the substantial change necessary for the Cuban economic model.
"Faced with the collapse of the centralized planning model, mainly due to its own internal shortcomings, there are two respectable alternatives: accept the political cost of failure, or critically reassess and drastically transform the model," he emphasized on X.
The economist reminded that on previous occasions, official rhetoric has been inflated to sell a supposed "improvement" with a hint of "openness," which is nothing but an outdated trick.
"The fact that the government can't think beyond 'removing obstacles' and the 'centralization-decentralization contradiction,' or regarding the municipality and state enterprise as key components of the 'nation's machinery,' speaks volumes about the intellectual fatigue of the government's economic team," he remarked.
Proposed Economic Reforms
During the television program "Revista Buenos Días," Díaz-Canel introduced six major reform axes: economic management system, municipal autonomy, business autonomy, agricultural recovery, foreign trade, and foreign investment.
Noteworthy among the measures is the plan to allow municipalities to import and export "without needing higher structures," enable state enterprises to operate "without intermediaries," and grant non-state actors free access to foreign trade.
The leader assured that "companies will have a broad scope; they will be able to produce and provide services to the fullest extent of their capabilities, exploiting all potentialities without any limitations."
He also stated that these proposals are part of the Economic and Social Program for 2026, which will be subject to a public consultation at the end of 2025 involving over two million people. The government has studied experiences from China and Vietnam and even utilized artificial intelligence tools to evaluate models compatible with Cuba's political system.
However, the measures are still awaiting formal approval by the Political Bureau and the National Assembly, scheduled for July, highlighting the sluggish and bureaucratic nature of the implementation process amid a historically significant crisis.
Persisting Economic Challenges
Monreal, one of the most recognized independent voices in Cuban economic analysis, has long warned about the insufficiency of the regime's reforms.
On June 9, he questioned the reduction of ministries—from 27 to 20—describing it as having "more symbolic than transformative weight," and in April, he downplayed expectations for Decree 127/2025, considering it "conservative and of limited effect."
In February, Monreal compared Díaz-Canel's new austerity phase to the Soviet Liberman-Kosygin schemes, and in May, he warned of a potential historic decline in Cuba's GDP.
The backdrop for these announcements is dire. The Economic Commission for Latin America and the Caribbean (CEPAL) forecasts a 6.5% contraction in Cuba's GDP by 2026, while The Economist Intelligence Unit estimates a 7.2% drop, contrasting with the official growth target of 1%.
The country endures power outages lasting up to 20 to 30 hours, widespread shortages of food, medicine, and fuel, and an average salary equivalent to just $15 per month.
External Pressures and Historical Context
In addition to internal turmoil, external pressure is mounting.
The Trump administration imposed direct sanctions on June 4 against Díaz-Canel, his wife, and other officials, freezing their properties and bank accounts in the United States, and set a June 5 deadline for foreign companies to sever ties with GAESA, the military conglomerate controlling a large portion of the Cuban economy.
Analysts have dubbed Washington's strategy "Cubastroika," aimed at forcing economic reforms in Cuba through a mix of pressure and selective openness to the Cuban private sector.
The recent history of the regime does not inspire optimism.
The 2011 Guidelines promised to "update the economic model" but maintained strong state control: Cuba continued importing around 80% of the basic food basket.
The 2021 Ordenamiento Task was implemented without resolving its structural foundations, resulting in inflation, shortages, and a deterioration of purchasing power.
Monreal succinctly captured what many analysts think about the new announcement: "We will see the details."
Understanding Cuba's Economic Reforms
What are the main components of Díaz-Canel's economic reforms?
The reforms include six major areas: economic management system, municipal autonomy, business autonomy, agricultural recovery, foreign trade, and foreign investment.
Why are the reforms described as "belated pragmatism"?
Economist Pedro Monreal describes them as "belated pragmatism" due to the lack of coherent connections between the measures and the absence of a functional framework for international integration.
What challenges does Cuba face with these economic reforms?
Cuba faces significant challenges, including a deep economic crisis, power outages, and shortages, compounded by external pressures such as sanctions and demands for reform from foreign governments.