Private Businesses in Cuba to Shoulder Social Welfare Burden Under New Government Mandate

The Cuban regime has unveiled a directive at the Third Extraordinary Session of the National Assembly of People's Power (ANPP) that mandates all economic entities—state-run and private, domestic and international—to directly contribute to the nation's social welfare system. This includes funding pensions and covering funeral costs for impoverished families.

This directive, labeled as measure 70 within a set of 176 reforms introduced by Prime Minister Manuel Marrero Cruz, requires private companies to collaborate with banks to ensure pension payments, support Family Attention System dining facilities, sustain nursing homes, maternity homes, and shelters for orphaned children.

But the responsibilities extend further: businesses must also offer differentiated pricing, discounts, or solidarity quotas for vulnerable individuals; establish local emergency funds with private contributions; use their premises as collection points during crises; aid in healthcare and social transport; support public health institutions and educational centers; and even bear the cost of funeral services for destitute families.

While the regime labels this as "social responsibility," it is essentially a formal acknowledgment of its own institutional collapse.

Plenty of examples illustrate this point. On Wednesday, the provincial government of Granma admitted it lacked the over 400 million pesos needed to pay its 111,000 retirees that month.

Back in May, the Holguín government turned to about 20 private micro-enterprises to distribute cash pensions to approximately 5,000 retirees after the banking system failed. And in March, the Ministry of Labor and Social Security bluntly admitted: "There are no resources to care for vulnerable individuals."

The minimum pension, set at 4,000 Cuban pesos since September 2025, is less than $10 on the informal market, while the basic living expenses in Havana amount to around 12,000 pesos per person monthly, according to the Cuban Citizen Audit Observatory.

A survey conducted by the ASIC organization involving 506 retirees across five provinces found that 98.8% feel abandoned by the state, and 99% say their pension fails to meet basic needs.

Challenges of an Aging Population in Cuba

The demographic reality compounds the issue: Cuba is the most aged nation in Latin America, with 25.7% of its population aged 60 or older by the end of 2024, out of a total populace of just 9.7 million.

There are only 156 nursing homes with 12,697 beds nationwide, and 51 municipalities lack any elder care services.

In February, the regime had already allowed non-state actors to open and manage senior residences, clearly acknowledging the state's inability to meet this demand.

Marrero Cruz characterized the measures before the ANPP as a "sovereign exercise to preserve the Revolution's achievements without abandoning socialism," describing the current situation as the most challenging since the Special Period of the 1990s.

To justify the reforms, he quoted Fidel Castro's 1993 statement: "Life, reality, the dramatic situation the world is experiencing, forces us to do what we would never have done otherwise."

The 176-measure package—which also includes the authorization of private banking for the first time since 1959 and the removal of the 100-worker limit for micro-enterprises—was presented as a remedy for decades of prohibitions the regime itself imposed on the private sector.

What the regime has not proposed is increasing the state budget for social welfare or undertaking structural pension system reforms. Instead, it shifts this burden onto the very private enterprises it has long vilified as threats to socialism.