It is December 2010. I am 15 years old. I am in a room at the Lenin Vocational School with teachers and other students. The Guidelines that will be presented to the Sixth Congress of the Party in April next year are being discussed. This meeting is part of the popular consultation that is taking place in schools and workplaces throughout Cuba. The hope and expectation of the population to participate in a reform process that resolves the problems and puts the economy on track are palpable.
Fifteen years later: it is October 2025. I am 30 years old. Finally, it was published on “Government program to correct distortions and re-boost the economy“, enthroned as the governing document of current economic policy. It will soon be discussed with the population before its presentation in the IX Party Congressin April of next year. The enthusiasm in the streets is not the same as 2010.
The Program, initially called “Government Projections,” was outlined in December 2023 by the Prime Minister in a speech to parliament. The first criticism he faced was his hiding from the public eye, until now.
Although this is a “public version”, it is fair to recognize that its dissemination is positive. It allows the population, companies and academia to know the Government’s lines of work to get the country out of the crisis. It is also an opportunity to encourage debate on the effectiveness of the objectives, measures and indicators that comprise it. Finally, it allows you to critically analyze it in context:
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What is the concept of “distortions” of the Cuban economy?
The Program does not define the concept of “distortions”, despite it being a central element, even included in the title. In the macroeconomic dimension, it is clear that inflation or high fiscal deficit are distortions that need to be corrected. However, without a methodological definition, it is difficult to establish objectives, evaluate results and avoid incorrectly identifying distortions.
On the other hand, the Program does not propose to solve all the distortions at once. In the monetary field, it recognizes that “the conditions do not exist” to unify the currencies and exchange rates that operate in the economy (p. 10). The short-term solution lies in the creation of fully or partially dollarized circuits for state companies. In other words, they will be able to operate in dollars to obtain income in that currency, retain a percentage and contribute the rest to the central account of the State. This is essentially a “closed foreign currency financing scheme”, approved in sectors such as tourism, the biotechnology industry or tobacco cultivation.
The idea of a single exchange market with relative free access for all companies and the population will not be a reality for now. The dollarized circuits will operate in the authorized branches and with their own operating mechanisms. It is not foreseeable that private businesses will be able to directly access them, unless they are “chained” with a state entity that is part of it. For example, an agricultural producer who sells meat or food to a hotel could charge a component of that sale in foreign currency. It should be noted that these measures are not new, since since 2020 they were implemented with the freely convertible currency (MLC), which is now in decline.
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Structural changes?
The Program does not resume economic reform, which is one of its main weaknesses. By encompassing the economic, social, cultural and political dimensions of the country, it is integrative. However, this can be a double-edged sword: too many objectives can dilute the prioritization of what is most strategic and urgent. Several economists have argued the need to invest efforts and resources in at least three priorities: 1) electro-energy system, 2) increase external income, 3) promote food production.
The energy priority is the clearest in the document, since it has an entire objective dedicated to it (p. 77). However, regarding the increase in external income, no structural, regulatory or mechanism transformations are announced that would modify the current situation of chronic shortage of foreign currency. Rather, the Program calls for “proposing incentives” to “stimulate the development of new exportable items” (p. 20), phrases that have become a slogan in recent years and that can be found repeatedly in speeches, reports and reports.
In another of the quintessential sources of foreign currency income, foreign direct investment (FDI), there are also no concrete actions to simplify bureaucracy and expedite the authorizations of businesses with commercial interest in Cuba (p. 21). For example, one of the actions calls for “promoting FDI business projects that contribute to territorial development strategies” (p. 22). Conceptually it is correct, but as long as foreign investment is authorized centrally by the Council of Ministers, the process will continue to take years.
A representative indicator: the aim is for the number of “identified” foreign investors and business partners to be at least five (p. 24). Key indicators such as gross fixed capital formation, number of approved FDI businesses or the percentage of FDI with respect to GDP are not available in the Program.
In food production, directly correlated with investment and productivity in the agricultural sector, the document does not propose structural transformations. Most measures focus on contracting, collection or control, rather than prioritizing production (pp. 27-29). Others are not enough: one of the actions involves “saving the sugar agroindustry” with foreign capital, but the indicator establishes the goal of signing a single project (p. 32). Another indicator reflects the debacle of this historic and symbolic sector: exporting sugar worth 11.7 million dollars (p. 24).
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A look at the business system
Without news, the Program maintains the vision of the state company as a hegemonic subject, in correspondence with the fundamental principles of the Cuban economic model. The transformations are aimed almost exclusively at the business forms of the State (pp. 34-36), such as the creation of a National Institute of State Business Assets and the reorganization of the Governing Boards, the classification of companies, the reform of the higher business management organizations (OSDE), and the creation of subsidiary companies and state MSMEs. None of these measures is new; all have been announced before in sessions of Parliament, meetings of the Council of Ministers or appearances of directors.
Regarding the State Enterprise Law, it is stated in the legislative schedule, but in the business system section there is talk of approving a decree-law (not a law) that regulates the transformations of this economic actor (p.35).
Regarding the private sectorwhich is also part of the country’s business system, there is no “clear” strategy other than control. MSMEs, self-employed workers and cooperatives are again identified as a “complement” to the main economic actor, although the meaning of that role is also not clear. Of the actions directed at the non-state sector (pp. 36-37), 6 of the 8 refer to control. None of them show the idea of promotion and encouragement. The worst: in the indicators of this objective, the creation of private MSMEs is not contemplated (p. 39), which suggests that this process will continue virtually paralyzedwhich is a contradiction in an economy in full contraction.
There is no news about joint ventures between the State and national private companies, beyond the reiteration of the need to create this type of business (p. 36).
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A challenge and a bottleneck
The challenge is the operationalization of the measures. How will the stated actions be implemented? The Program itself does not provide, but rather frames the changes that the Executive plans. It is foreseeable that we will have to wait for the publication of legal norms, in their various ranges, that regulate the transformations. This is not minor, considering that the issuance of a standard in the Official Gazette is a process, from the construction of consensus between the parties (ministries, institutes, etc.) to the official publication.
The bottleneck is the resources available to finance the Program proposals, which reinforces the principle of prioritizing among so many work fronts. The capital required alone for the objective of recovering the electrical system reaches almost two billion dollars (p. 79), a very high percentage of the country’s foreign exchange earnings in one year. It will be impossible to invest in one area without sacrificing others, and that is why the decision is even more relevant. The limitation of resources objectively restricts the effectiveness of the Program.
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Deadlines
One of the most striking limitations of the Program is that it does not establish deadlines. When will the actions be carried out and the indicators achieved? Does the Program last one year, two years, five years…? This is key for several reasons: 1) it establishes a period of time to wait for solutions, 2) it defines the level of urgency given by the Government to the problems, 3) it provides transparency to public management, 4) it aligns expectations, 5) it allows correcting the implementation in time if there are delays in meeting objectives.
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Popular participation
The Program has gone through several versions, as a result of the challenges faced by its implementation and its enrichment with criteria and proposals from organizations, experts and academics, as mentioned in its Introduction (p. 3).
Now comes a litmus test: consultation with the population. Two main questions are: 1) does the consultation include the possibility of modifying the content of the Program?, and, if the answer is affirmative: 2) under what criteria will the proposals for changes be included? How will the popular consultation mechanism be used to the maximum, encouraging real participation?
A mandatory evocation
The massive and democratic consultation process with the population was the prelude to the attempted economic reform of 2011. Under the official name of “Updating the economic model”, it generated consensus, expectation and unity. However, in the face of structural measures and their expected contradictions, it was little by little delayed, its transformations slowed and eventually abandoned. The popular consultation and the guidelines of 2011 and 2016 disappeared from public discussion, and the conceptualization and the National Development Plan until 2030 did the same.
The Government Program does not return to the path of reform nor does it have the scope of the 2010-2011 process. It is an attempt to alleviate the current crisis, and unfortunately without a systemic or structural vision. In any case, it is the plan that is on the table. The question is: How will the accountability mechanism work in case of slowdown/paralysis/abandonment of the Program?
Furthermore: How to resume economic reform, with all the structural transformations that the current situation requires, assuming benefits and costs, without giving up at the first contradiction that arises? If it continues to delay, the answer to that question may soon become irrelevant.
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