Cuban President Miguel Díaz-Canel on March 2 told the country’s Council of Ministers that Cuba needs “urgent” economic reforms, a statement that came amid escalating U.S. economic restrictions on Cuba, which have worsened fuel and food shortages on the island. Díaz-Canel’s remarks came after U.S. President Donald Trump on Feb. 27 told reporters that his government is in talks with Havana, adding, “Maybe we’ll have a friendly takeover of Cuba.” What kind of economic reforms will Cuba’s government likely implement? To what extent can policymakers in Cuba feasibly take steps to alleviate the country’s fuel and food shortages? What’s the state of U.S.-Cuba relations, and what will ultimately result from U.S. pressure on Cuba?
Carlos A. Saladrigas, chairman of the Cuba Study Group and Regis HR Group: “Cuba’s uncertain future leads to one clear conclusion: The reforms required to reverse its economic decline and restore prosperity are the same whether undertaken voluntarily by its government or forced by external pressure from the United States. Gradual, incremental reform is unlikely to work. The time for slow, ‘Vietnam-style’ sequencing has passed, and piecemeal changes would only prolong the country’s current crisis. What is needed instead is a comprehensive transformation that liberalizes not only the economy but Cuban society as well. Broader freedoms and institutional openness are essential to build the trust and confidence investors require. This raises two central questions. First, after 67 years of economic mismanagement and resistance to change, are Cuba’s leaders prepared to truly unleash the potential of the private sector? Second, does the U.S. administration understand that meaningful reforms in Cuba must be matched by reciprocal actions—specifically, substantial sanctions relief? Without such reciprocity, any surge in private-sector initiative could quickly falter. Complicating matters further is whether the United States has the capacity and political bandwidth to engage in yet another long-term nation-building effort, especially amid other geopolitical conflicts. Such processes take years, not months. Moreover, Cuba’s long and difficult history of struggle for independence suggests that excessive U.S. control over a transformation process could undermine Cuban sovereignty and national dignity, potentially creating lasting political resentment. A more constructive path may still exist. A national dialogue that includes Cubans on the island and in the diaspora—perhaps convened under the moral authority of a respected institution such as the Catholic Church—could help define a broadly supported path forward. Such an outcome would benefit all sides and offer the possibility of a genuine and peaceful breakthrough for Cuba’s future while securing Mr. Trump’s legacy in the region.”
María José Espinosa Carrillo, executive director of the Center for Engagement and Advocacy in the Americas (CEDA): “President Miguel Díaz-Canel’s call for ‘urgent’ economic reforms—including reducing the size of the state sector, strengthening domestic production and granting greater autonomy to private enterprises and municipal actors—reflects the severity of Cuba’s current economic and energy crisis. Cuban authorities have announced similar reform agendas in the past, and while some changes have taken place—most notably the legalization of small and medium-sized private enterprises—the pace and consistency of implementation have been slow and insufficient. This has contributed to significant public skepticism about whether reforms will be deep enough to address the scale of the island’s crisis. Even so, expanding the private sector and encouraging public-private partnerships are increasingly recognized as essential components of any viable recovery strategy. If implemented consistently, reforms that allow greater flexibility for private businesses, farmers and local governments could help stimulate domestic production and improve the availability of goods over time. U.S.-Cuba relations remain highly strained, and economic pressure from Washington continues to shape the environment in which reforms unfold. At the same time, the changes required inside Cuba are deeper than the incremental adjustments that have been discussed for years. The current crisis is unfolding in a country with fewer economic buffers, weaker public services and a population that is far more skeptical that announced reforms will translate into real change. While U.S. policy will inevitably influence Cuba’s economic outlook—and Washington currently holds significant leverage—the credibility of any recovery strategy ultimately depends on steps taken in Havana.”
Pavel Vidal, professor in the Department of Economics at Pontifical Xavierian University in Cali, Colombia and former analyst in the monetary policy division at the Central Bank of Cuba: “The Cuban economy needs a broad program of stabilization and liberalization, together with a new strategy for international integration that would allow it to generate exports, service its debts and begin investing in a productive infrastructure that is now practically in ruins. The Cuban government has resisted these changes because they would necessarily entail dismantling the command-economy model that the Communist Party has defended for decades. However, under the pressure of the Trump administration, the energy squeeze and military threats, one could expect greater pragmatism among the Cuban elites and a greater willingness to accept deeper transformations—something that a large part of Cuban society is also demanding. As a first step, some priority measures could include removing the 100-worker cap on private businesses and expanding their rights through a business law, dismantling the military business conglomerate GAESA and introducing market-oriented reforms in agriculture to strengthen farmers’ property rights. The United States will likely push for guarantees for foreign investment, with a view to opening space for U.S. and Cuban-American capital in sectors such as tourism, real estate and mining. That, in turn, would likely require progress toward some resolution of the properties nationalized in the 1960s. Still, for these transformations to be credible and sustainable, they would need to be accompanied by institutional and political changes—an area where resistance on the Cuban side is likely to be much stronger.”
Michelle Chase, associate professor of history and director of Latin American studies at Pace University: “The U.S. government’s current strategy of trying to force Cuba toward a breaking point is dangerous. It is edging Cuba toward a humanitarian crisis without guaranteeing the significant political and economic change that would satisfy the Trump administration. If history is any guide, Trump’s repeated prediction that Cuba will fall of its own accord is probably wishful thinking. The past half century of Cuban history offers several lessons. First, extreme material hardship does not automatically lead to political upheaval. The severe deprivations of the 1990s showed this unequivocally. There were some major popular protests, and Cuba’s internal opposition arguably flourished in this period, but Cuba’s government was able to weather the storm. Widespread material hardship and political disaffection are more likely to result in disorderly mass migration events—such as the 1980 Mariel boatlift or the 1994 rafter crisis—than in a sustained mass protest movement. Second, the Cuban government has been willing to implement economic reforms that bolster the private sector but has tended to pause or roll back these economic openings when faced with their unintended social or political consequences—as we saw in the 1980s with rectification and the 2010s when Raúl Castro’s economic reforms stalled. And finally, history has shown that in periods of heightened crisis or U.S. aggression, the Cuban government has successfully closed ranks, mobilizing anti-imperialist sentiment or nationalist pride. The government’s capacity to do so may be waning, but the lingering authority of the aging revolutionary leadership and the historic loyalty of Cuba’s armed forces will preclude the overnight solution the Trump administration engineered in Venezuela.”
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