Cuba pushes through sweeping free-market reforms in biggest economic
shift since the revolution
[June 20, 2026] By
ANDREA RODRÍGUEZ
HAVANA (AP) — Observers on Friday called Cuba’s new free-market reforms
the most sweeping economic overhaul of the island’s communist economy
since the Cuban revolution, as the grandson of former President Raúl
Castro said in an interview that Cuba must seek to move its economy
forward.
The 176 measures aim to further decentralize Cuba’s state-run economy,
which has been left gasping by a tightened embargo under President
Donald Trump. Under the island’s current economic model, the government
largely determines what is produced, who produces it, the prices at
which goods are sold and how the country’s resources are allocated.
The plan includes more space for private businesses, imports and exports
without state intermediation, free hiring of personnel, authorization
for private banks and investment by Cubans abroad. It even permits
fast-food chains to establish themselves on the island.
“Elements that for decades were listed as pillars of the revolutionary
economy, such as the state monopoly on foreign trade and the
centralization of productive forces, have been dismantled,” said Luis
Carlos Battista, a Cuban-American political scientist and lawyer who is
a doctoral candidate at the University of Salamanca.
Cuban leaders like former President Raúl Castro – who still wields
significant power on the island – have sought to push forward more
limited reforms of Cuba's economy in the past, but efforts have run into
bureaucratic hurdles. In passing the reform, Cuban authorities cautioned
that implementation could be slow, and noted measures will not be viable
if the U.S. does not lift the energy and financial embargo on the
island.
Since January, Cuba has been under a harsh energy and financial embargo
imposed by the U.S., effectively blocking Cuba off from fuel, it's main
energy source, and deepening the crisis had already been deteriorating
for the past five years. Blackouts have lasted up to 20 hours a day and
have restricted access to health services, transportation and education.
U.S. President Donald Trump and Secretary of State Marco Rubio
acknowledged that they are maintaining a policy of maximum pressure to
change the island's political and economic system, which has endured for
six decades despite U.S. pressure. They have not ruled out the use of
military force.
Castro grandson says Cuba not even ‘slightly’ a threat to U.S.
In an i nterview published Friday, in the United Arab Emirates-based The
National, Raul Guillermo Rodriguez Castro, grandson of the revolutionary
leader, reiterated that Cuba “doesn't even slightly represent a threat”
to the U.S.
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People walk past graffiti in the colors of the Cuban flag in Havana,
Cuba, Wednesday, June 17, 2026. (AP Photo/Jorge Luis Banos)
 Rodriguez Castro said in the video
interview that Cuba's government was seeking a “very Cuban” economic
model.
“Our country must seek a path to economic development where we must
inevitably diversify our economy, diversify the way we do business
and diversify the way we do investments,” he said.
Cuban President Miguel Díaz-Canel said that the proposed measures
were based on an analysis of the Vietnamese and Chinese models,
communist countries with market economies.
What is likely to pose a significant barrier are U.S. sanctions on
Cuba, said Lee Schlenker, a research associate at the Quincy
Institute in Washington.
“With these new measures, along with others that are likely on the
table, they will only have a true effect if complemented with the
gradual lifting of U.S. prohibitions and sanctions more broadly,” he
said.
Without sanctions being lifted, Schlenker and other analysts said
many of the presented measures will be inapplicable, especially due
to the limitations and prohibitions imposed on potential investors,
who are penalized in the U.S. financial system if they do business
with Cuba.
Beyond that, there are a number of other obstacles that could stymie
significant reforms, ranging from mistrust from potential investors
to what Battista, the Cuban-American analyst called “slow and
inefficient” bureaucracy.
Despite these obstacles, the Cuban government faces a short window
for obtaining results, said Paolo Spadoni, associate professor in
the Department of Social Sciences at Augusta University in Georgia.
“If Cuban leaders hope to survive this unprecedented crisis and the
pressure from the United States, they must move quickly with the
implementation of reform and the achievement of tangible results,”
Spadoni said.
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