Cuba enacts measures to privatize economy

U.S. sanctions and embargoes have created a humanitarian crisis in Cuba. In response, its leaders are embracing measures that would further open the country to the “free market.”

Cubans line up in predawn hours hoping to make withdrawals before cash reserves run out. PHOTO: FS staff

In Cuba, the elderly rummage through garbage heaps for food scraps to quell their hunger. Moms send their kids to upscale boutiques and eateries to beg for pesos. Crime is on the rise, as is drug abuse, prostitution, corruption, and domestic violence.

Meanwhile, transportation and public services have halted. Days-long water shortages and blackouts are the norm. Factories and farms are idled due to fuel and electricity shortages. Patients and newborns die in hospitals for lack of medical supplies. The masses have sunk into survival mode.

Sanctions suffocate Cuba

Cuba’s sudden decline stems from Trump and Rubio’s military petroleum blockade. Only two oil tankers have arrived this year. Brutal sanctions on state enterprises, organizations, individuals, and banking transactions prevent other countries from helping Cuba.

Foreign hotels and industries have abandoned investments and fled the island to avoid Washington’s wrath. Trump’s crusade of “maximum pressure” has spawned a humanitarian catastrophe for the country’s over nine million residents.

Overwhelmed by the grueling conditions and lacking any meaningful outlet for democratic expression, citizens bang pots at night to express their resentment toward the U.S. and their own government. Only those who criticize the ruling party — the Communist Party of Cuba (PCC) — are arrested.

An existential crossroad

Following the defeat of the CIA-orchestrated Bay of Pigs invasion, Fidel Castro declared: “This is the socialist and democratic revolution of the humble, by the humble and for the humble.”

Millions of Cubans rejoiced alongside multitudes of working people worldwide. They interpreted Fidel’s proclamation as validation of their liberation struggles.

Until the collapse of the Soviet Bloc in 1991, Cuba had enjoyed unfettered trade and cultural cooperation with 21 fellow member states. Islanders had a high standard of living compared to most Latin American countries and set a benchmark for nations emerging from neocolonial control.

With the loss of Soviet collaboration, Cuba was plunged into an economic emergency. To weather the storm, the PCC temporarily legalized the U.S. dollar, opened the island to international tourism, and allowed a few Cubans to become self-employed.

Succeeding his brother Fidel in 2008, President Raúl Castro fired 500,000 state employees and told them to open private restaurants, small shops, and hostels. He then passed foreign investment laws to attract foreign capital and outsourced much of the hotel industry to international chains.

The “reforms” unleashed forces that created an entirely new class of small capitalists aspiring to become big-business owners. Many who flourished became members of the PCC, leading to new political influences within the party.

Into the neoliberal abyss

On June 18, 2026, the National Assembly unanimously approved 176 privatization laws that read like a handbook for free-market capitalism. Done at the behest of President Miguel Díaz-Canel and endorsed by the Central Committee these reforms were justified as “socialism with market characteristics.”

Former Cuban President Raúl Castro lauded the measures as “what best serves the Revolution today,” and not a capitulation to Washington.

Díaz-Canel pointed to the Chinese economic model as inspiration. China has the second-highest number of millionaires and billionaires after the U.S., and most are members and leaders of China’s ruling Communist Party.

Open for business

The 176 permanent measures overhaul the economy from top to bottom. Under the reforms, individuals are granted ownership of private businesses. Private banks and financial services take the spotlight replacing central banking. Government planning is slashed and the state monopoly on foreign trade terminated.

The measures open public land to agribusiness and promote commercial development. All state-owned assets are ready for transfer to private hands, completing a neoliberal transformation.

Labor unions are expected to facilitate the process, which requires sacrificing workers’ protections. The new rules call for more soup kitchens and food banks, but raise daycare costs, consumer sales tax, and garbage collection fees.

Washington demands blood

U.S. Secretary of State Marco Rubio responded to the measures with more sanctions, claiming they don’t go far enough. He wants open elections so foreign-backed candidates can vie for office, a greatly reduced role for the PCC, and zero military involvement in the economy.

Even if Cuba’s leaders concede to these demands to maintain power, Rubio wants a new constitution that removes references to socialism and guts current legal guarantees of equality for Afro-Cubans, women, and LGBTQ+ people. Nothing short of recolonization will satisfy Washington.

Cuba’s revolution proved that imperialism is not invincible. It was the first nation in the hemisphere to abolish capitalist relations and provide political and material support for global revolutions during its first decades as a workers’ state. Cuba’s legacy of resistance is something to emulate.

Freedom fighters today can keep that spark alive by defending the country’s sovereignty, challenging the embargo, protesting U.S. aggression, and providing aid to the island’s people as they struggle for survival.

Suárez is a writer and activist who lives in Cuba. Send feedback on this article to FSnews@socialism.com.