Cuba launches sweeping reforms to revive economy

Cuban President Miguel Diaz-Canel announced on Saturday a sweeping reform package aimed at reviving the economy, reducing centralisation, and granting greater autonomy to various sectors of society. In a speech broadcast on state television, Diaz-Canel stressed that the reforms were not a response to pressure from the United States, but rather intended to strengthen the country’s economic model. “This country is not standing still. This country is intelligently facing all circumstances. We cannot publicly disclose everything we do because the enemy watches every step we take. Our response must be unity and solidarity,” Diaz-Canel said. He explained that the reform package would be submitted in the coming weeks to the Political Bureau of the Communist Party of Cuba (PCC), one of Cuba’s highest decision-making bodies, before being discussed by the National Assembly of People’s Power, the country’s unicameral parliament. Under the proposed reforms, agricultural producers will gain greater flexibility. The government will also remove the mandatory role of state companies as intermediaries in foreign trade and lift restrictions on vehicle imports. Diaz-Canel added that the government wants to encourage foreign investment and will grant the same rights to Cubans living abroad as those enjoyed by residents on the island. As part of an effort to improve government efficiency and reduce bureaucracy, the number of ministries will be reduced from 27 to 20. The Cuban president also announced a gradual phase-out of product subsidies. Social assistance will subsequently be focused on the most needy segments of the population. As part of the reforms, Cuba plans to open the tourism sector to new business models and operators. This move comes after several foreign companies reduced or ceased their activities in the country due to US sanctions. Several international hotel chains, including Melia Hotels International, Iberostar, Blue Diamond Resorts, and Archipelago International, announced the partial or complete suspension of their operations in Cuba in June due to sanctions imposed by the United States. This decision cast uncertainty over the future of around 50 hotels, most of which are state-owned and managed through Gaviota, a subsidiary of the military-controlled holding company GAESA. Cuba’s tourism industry has faced difficulties since the COVID-19 pandemic. However, the tightening of sanctions by the United States since January has further worsened the situation, triggering a sharp decline in foreign tourist arrivals. The situation has prompted many foreign companies, including hotel operators and airlines, to leave Cuba. According to data from the National Office of Statistics and Information (ONEI), 328,608 foreign tourists visited Cuba during the first four months of 2026. That figure represents a 55.8 percent drop compared to the same period the previous year. In April 2026, Cuba recorded only 30,551 foreign tourist arrivals.