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date: 19 June 2019

Cuba in an Age of Economic Reform

Summary and Keywords

Cuba in the second decade of the new millennium remains as interesting as ever, commanding a place on the world stage much greater than its small size would indicate. Fidel Castro passed away in November 2016 after 10 years of retirement from public life, during which time his brother Raúl assumed the leadership of the country and led Cuba through some very important political and economic changes that are still being played out. In 2011, a long delayed Communist Party congress mandated the scaling back of government employment and the re-creation of a services sector of the economy dominated by private economic activity. These market mechanisms have threatened the island’s vaunted egalitarianism but have moved the economy forward after years of stagnation. In 2013 Raúl declared the political reform of a two-term limit on the presidency and in 2018 Miguel Diaz-Canal, a man in his fifties, assumed the presidency, signaling a shift of political control to a generation born after the revolution triumphed in 1959. The final results of these political and economic reforms, especially in the face of continued hostility from the United States, are not clear, but if they succeed it will not be the first time that Cuba will be an inspiration to those in the world seeking a successful model of social justice.

Keywords: Fidel Castro, Raúl Castro, Miguel Diaz-Canal, Cuban Revolution, 26th of July Movement, Cuban Communist Party, Council of Mutual Economic Assistance, special period in a time of peace, Latin American politics


Cuba is an archipelago consisting of two main islands, Cuba and the Isle of Youth, and about 1,600 keys and inlets. The total area of 42,803 square miles is nearly as large as Pennsylvania. Cuba lies just 90 miles south of Key West, Florida. Low hills and fertile valleys cover more than half the country. Tropical forests and high mountains in the east, which sheltered the revolutionary movement in the 1950s, are contrasted with the prairies and western hills and valleys. Cuba’s subtropical climate is warm and humid, with an average annual temperature of 75 degrees. The climate contributes to Cuba’s attraction as a year-round tourist destination.

In 1959, Cuba began a social revolution under the leadership of the 26th of July Movement, named for the date in 1953 when movement leaders tried to overthrow the dictatorial regime of Fulgencio Batista with an ill-fated attack on the Moncada army barracks in Santiago, the country’s second-largest city. The movement, under the leadership of Fidel Castro and Ché Guevara, carried out profound changes in Cuban society, including the establishment of a socialist economic system. Today, the revolutionary movement that took control in 1959 is still in power despite a more than 50-year economic blockade by the government of the United States and the collapse of Cuba’s main trading partner, the Soviet Union. It is the character of Cuba’s revolution and its success in resisting years of efforts by the United States to regain control of the island that have made Cuba far more prominent in world affairs than its small size would indicate.

Cuba’s current population is 11.2 million, with no significant growth in the last decade. More than 70% of the population lives in urban areas, with the capital, Havana, having 2.5 million residents. Cubans of Spanish descent make up approximately 40% of the population, while 12% have primarily African ancestry and approximately 50% are mulatto (mixed heritage of Spanish and African). There is a small community of persons of Chinese heritage (less than 1%).

More than half of all Cubans are under the age of 30 and thus have been born and raised since 1959. Over 1 million Cubans live in the United States, primarily in south Florida, where they have a major impact on political, social, and economic life. The core of this Cuban American community was roughly 150,000 middle- and upper-class Cubans who left between 1959 and 1961 amid the dramatic changes brought on by the revolution. The community has been augmented through the years by tens of thousands of others who have migrated for both political and economic reasons, mainly in 1980 and 1994.

Education is a priority in Cuban society, and the state provides free primary, secondary, technical, and higher education to all citizens. Cuba has an average of one teacher for every 45 inhabitants, and the literacy rate of 99% is one of the highest in Latin America. Cuba’s healthcare system has been a priority for the revolution and is a well-regarded model for the developing world, with more than 260 hospitals and 420 clinics. Family doctors are assigned to each community, and there is one doctor for every 260 Cubans. The average life expectancy is 78 years, and the infant mortality rate is 5.1 per 1,000—both numbers are slightly better than the United States (World Health Organization [WHO], 2017). Cuba also sends thousands of doctors annually to work in the lesser developed world in a program that has become an increasingly important component of the Cuban economy (Kirk & Erisman, 2009).

Women and Cuban citizens of African descent suffered widespread discrimination prior to 1959, and despite the increased prominence of both groups in Cuban society as one of the major achievements of the revolution, racism and sexism continue to be features of Cuban society. Racism is rooted in the importation of millions of slaves to Cuba to cultivate sugar cane from the 18th century onward. Prior to 1959, women worked outside the home only as domestic servants and prostitutes, but today, women have been integrated fully into the workplace and have equal access to education and equality before the law. Women also have much greater control over their lives through the widespread availability of contraceptives and abortion. As a result of the equal access to education at all levels since 1959, women now occupy prominent positions in almost all institutions of the society, especially in financial institutions, academia, and management of enterprises. The prominence of female leaders in society has continued to grow as the post-revolutionary generation assumes power. However, women remain underrepresented at the highest levels of the Communist Party, the country’s only party, but do now comprise close to half of the delegates to the National Assembly.

Racial discrimination was formally outlawed at the outset of the revolution, and long-standing customs that barred black Cubans from many public facilities were overcome. As the result of equal access to education, Afro-Cubans have risen to high places in the government, armed forces, education, and commerce. Recent years have seen a significant increase in the study and appreciation of the contributions made by persons of African heritage to the development of Cuba’s distinctive culture. The links of this community to Africa were strengthened during the 1970s and 1980s when Cuba developed close political and military ties with the African nations of Angola and Ethiopia. However, racist attitudes still persist in the society; and although no formal statistics are available, black Cubans seem to make up a greater percentage of those at the bottom end of the economic ladder. As a result, there has been renewed public focus on the issue since 2009 (Morales, 2013).

Cuba is a predominantly secular society, the result of both a relatively weak Catholic Church prior to 1959 and the policies of the revolution. Among believers, Catholicism is the dominant faith, although many people combine it with ideas of African origin in the religion Santería. Santería is probably the most widely practiced religion in the country, and in recent years it has benefited the most from a more tolerant attitude toward religion by the government. A number of Protestant churches also function, and there is a small and growing presence of evangelicals, who have become important players in other parts of Latin America. At the time of the revolution in 1959, the Catholic Church sided with the Batista regime and many foreign priests, especially Spanish priests, were expelled from the country. While guaranteeing freedom of religious practice, the government actively discouraged religious participation for many years, barring believers from membership in the Communist Party and promotions in most areas of Cuban life until 1991. The changing role of religion in Cuban society was embodied in the visits of Pope John Paul II in 1998, Pope Benedict in 2012, and Pope Francis in 2015. Equally important was a 1996 visit by a leader of Nigerian Santería.

Modern Cuban History

Cuba won its independence from Spain in 1902 at the end of its independence wars, but in the process became a neo-colony of the United States ruled over by Cuban leaders, largely controlled by forces of finance capital from its neighbor to the north. The most significant of these leaders was Fulgencio Batista. Rising from the rank of army sergeant, Batista emerged in 1934 as the head of a popular rebellion against the dictator Gerardo Machado and over the next 25 years was the dominant political figure in the country. Under his leadership, a progressive and democratic constitution was adopted in 1940, but his leadership soon turned corrupt. When he cancelled the 1952 election, he became a full-fledged dictator and that action sparked the movement that ultimately became the Cuban Revolution. The revolution began as a failed uprising in Santiago in July 1953 and eventually, by 1957–1958, became a broadly supported rebellion.

In 1957–1958, the war against Batista proceeded on two fronts, the 26th of July Movement guerrilla campaign in the Sierra Maestra of eastern Cuba and an urban resistance campaign consisting of several different political groupings. During 1957 the guerrillas worked to consolidate their position in the mountains by recruiting local peasants to join them and to provide logistical support. Meanwhile, many Cubans were already bombing government installations, executing police, and undermining confidence in the Batista government. In March 1957, the Revolutionary Directorate under the leadership of Echeverría tried to assassinate Batista in an armed attack on the presidential palace. The attempt failed and resulted in the death of Echeverría and most of the directorate leadership. Batista responded to the rebellion with widespread repression. Close to 20,000 Cubans would die in the struggle between 1953 and 1959, mostly civilians (Matthews, 1975).

The ultimate military success of the revolutionary uprising was surprising in both its quickness and its small numbers at the beginning. Of the 82 men who boarded the Granma in Mexico, only 12 made it to the mountains. After a year of accumulating a few hundred cadre, the guerrillas launched their first attacks in early 1958, just a year before their ultimate triumph. Batista’s defeat began in May 1958 when his army carried out an ill-fated offensive against the rebels in the Sierra Maestra. Batista launched the offensive following a failed general strike that had been called by the July 26th Movement in April. The turning point was a 10-day battle in Jigue when the rebels surrounded a government unit with greater firepower and defeated them. Following that defeat, the morale of Batista’s primarily conscript army was very low. Seizing the moment, the 26th of July Movement went on the offensive. In the decisive battle at Santa Clara in December 1958, the rebel forces under the leadership of Ché Guevara and Camilo Cienfuegos totally routed Batista’s forces, and the army collapsed. Batista had no reliable defenses around him in Havana, and on December 31, 1958, he fled the country.

Beyond the broad outlines of the military campaign just detailed, the triumph of the movement was a complex phenomenon. It was not a mass-based revolutionary war by a peasant army like those that occurred in China or Vietnam. Peasants were recruited to the movement and gave it important support, but the guerrilla army, numbering 800 as late as September 1958, was primarily a force of students, professionals, and workers from Cuba’s middle sectors. The Cuban insurrection was not an urban proletarian revolution. Organized labor, whose ranks were heavily influenced by the communist People’s Socialist Party (PSP), opposed the 26th of July Movement until almost the very end, when the communists gave their belated support. However, as recent scholarship has demonstrated, labor actions, especially in Havana in Batista’s final weeks, helped to lay the groundwork for the complete triumph of the Rebel Army. Especially important was the general strike launched across Cuba on January 1, 1959, the day the rebels declared victory in Santiago (Cushion, 2016; Hart, 2004).

The 26th of July Movement also carried out a broad alliance strategy that culminated at a July 1958 meeting in Caracas, Venezuela, where the Revolutionary Democratic Civic Front was organized, encompassing almost all the anti-Batista forces. The front, combined with the military weakening of Batista, eroded U.S. government support for the regime. In March 1958, under pressure from the Senate, the U.S. State Department placed an arms embargo on Cuba. In December, the Eisenhower administration repeatedly placed pressure on Batista to step down. However, the U.S. opposition to Batista was predicated on the assumption that the moderate anti-Batista forces would dominate the new government. That assumption proved erroneous (Smith, 1987).

Revolution in Power

On January 8, 1959, Castro and his followers entered Havana. He noted that the U.S. military had prohibited the Liberator Army under General Calixto García from entering Santiago de Cuba in 1898 and that history would not be repeated. Castro took no position in the new government but set about consolidating Cuba’s military forces under his command. Castro and his allies from the Sierra Maestra were committed to a program of radical social and economic reform, and they soon set out on a course to consolidate control over state power. The general strike that preceded Fidel’s arrival in Havana had signaled the widespread support that the rebels had to carry out revolutionary change, not simply a restoration of electoral democracy.

The victory over Batista came so quickly that most of the old political structures were intact. Only a few thousand of Batista’s closest allies left the country. Most of the landowning elite, businesspeople, professionals, and clergy stayed, hoping that they could influence the course of the new government and protect their considerable privileges. Well aware that their radical plans would encounter stiff resistance among those committed to only minor change, Castro and his allies moved to isolate his opponents one by one. In mid-February 1959, Castro accepted the position of prime minister and began to push through measures that would distribute wealth and increase support in the rural areas. In May, an agricultural reform act limited the size of most farm holdings to fewer than 1,000 acres. This measure destroyed the largest holdings, including U.S.-owned sugar properties, several of which exceeded 400,000 acres. Land was distributed to thousands of rural workers, and the government moved to improve conditions on the large farms it now controlled. As a result, support for the revolution increased throughout the countryside. The passage of the Rent Reduction Act resulted in the transfer of about 15% of the national income from property owners to wage workers and peasants.

A literacy campaign in 1961 sent thousands of young volunteers to rural areas. Literacy was increased, and the young supporters of the revolution learned firsthand about the conditions of the rural areas. The government also began building hundreds of new schools and training thousands of additional teachers. Healthcare was extended to the entire population for the first time with the construction of rural clinics and hospitals. Many private and racially segregated facilities such as clubs and beaches were opened to the public. These radical social and economic measures carried out in the first year of the revolution often involved mass mobilizations, which served to unite the poor majority of Cuban citizens behind the government. These measures also served to identify the movement’s political enemies, who exposed themselves through their vociferous opposition to the changes. Moderates in the government, such as acting president Manuel Urrutia Lieo, resigned in protest in June 1959, taking much of the leadership of the old democratic parties and landed elite into exile with them. Simultaneously, the use of revolutionary tribunals to judge and then execute approximately 160 (Sweig, 2016) members of Batista’s police and security agencies was popular with the Cuban masses but forced many of those who had been associated with the old regime to seek refuge abroad. One by one those political forces that opposed the radical direction of the revolution dropped away until only the revolutionary core remained, primarily the cadre of the 26th of July Movement from the Sierra Maestra, a few allies from the Revolutionary Directorate, and the PSP, who increasingly assumed key cabinet posts and took control of the government bureaucracy.

The confrontation between Havana and Washington built throughout 1959 and 1960. By December 1959 the CIA had already begun to recruit Cuban exiles, and in March 1960 Eisenhower decided to arm and train an exile force for the purpose of invading the island and precipitating the overthrow of the Castro government. A confrontation over the oil refineries, following the arrival of Soviet shipments, resulted in the first nationalizations in July 1960, and they were followed quickly by the seizing of U.S.-owned sugar plantations in August and foreign banks in September. Late in 1960 the United States broke diplomatic relations with Cuba, and in January 1961 the Eisenhower administration instituted an embargo on most exports to Cuba.

John F. Kennedy assumed the presidency of the United States in January 1961 and with it the responsibility for the group of Cuban exiles, now training in Central America under CIA direction. In April, the exiles invaded Cuba at the Bay of Pigs but were stalled by local militias, while in the cities the government-organized Committees for the Defense of the Revolution quickly pointed out persons in opposition, who were immediately arrested before any of them could support the invasion. The major result of the American intervention was the consolidation of Castro’s position by creating a solid identification between the anti-imperialism of Cuban tradition and the victory of the forces under Castro. Soon after the defeat of the exile force at the Bay of Pigs, Castro declared the “socialist” character of the Cuban Revolution at a May Day rally.

From the declared commitment to socialism in May 1961 to the campaign to produce 10 million tons of sugar cane in 1970, the Cuban Revolution moved through its most idealistic period. Domestically, the revolution sought to create a thoroughly homegrown socialist economy marked primarily by a lack of market incentives. Shared sacrifice and a drive for self-sufficiency were the primary driving forces in economic development. The leadership sought to diversify the Cuban economy while instituting a policy of industrialization. New products such as cotton were introduced to the island with the hope of reducing the island’s dependence on foreign inputs. As part of its sugar agreements with the United States, Cuba had limited its industrial development. There were numerous distortions—Cuba exported raw sugar but imported candy; it produced vast quantities of tobacco but imported cigarettes. Cuban economic policy of the 1960s was designed to reverse this reality. The determination to end dependence on sugar production took the extreme form of plowing over vast acreage of sugar lands and planting new crops, but these efforts largely failed due to the lack of expertise and appropriate climatic conditions. During this same time period, there was a sharp debate between forces, led by Ché Guevara, who argued that the revolution could move forward primarily on creating a new socialist consciousness based solely on moral incentives. By contrast, forces close to the old Moscow-oriented PSP argued that material incentives had to be employed for economic success. The issue was never definitively settled but Cuba did go forward with a highly equalitarian wage structure, a nod to Ché’s perspective.

During the 1960s, the Cuban government also borrowed a strategy of heavy industrialization from the Soviet Union, but these efforts yielded only limited success because of Cuba’s particular conditions and the lack of trained personnel. Following the failure of the “balanced growth” model, Cuba turned to an approach labeled the “turnpike model.” Instead of seeking to diversify the economy immediately, Cuba would give priority to sugar production by increasing the cultivated acreage and increasing mechanization. Earnings from sugar export would be used to import machinery to diversify agricultural and industrial production on a sounder basis. Other sectors were also developed, especially the production of cattle, fishing, and citrus fruit. Cement, nickel, and electricity were also expanded, with assistance from the Soviet Union in the form of machinery. During this period (1964–1970), the nationalization of the Cuban economy was completed. All industry, commerce, and finance, as well as 70% of agricultural land, was controlled by the state.

The turnpike model culminated in the 1970 sugar harvest that was intended to advance industrialization without incurring further debt. The harvest was a massive undertaking that involved workers from all sectors and volunteers from around the world; although close to 10 million tons were cut, major processing problems cut the final harvest to 8.5 million tons, far short of the goal. It was a significant blow to the prestige of the revolution, and production dropped in several key sectors outside of sugar. The failure of the revolutionary offensive led to a reassessment of the goals and strategies of the revolution in economic development as well as in other areas. It was recognized that more attention had to be paid to productivity, perhaps at the sacrifice of some egalitarian goals. It was also realized that economic independence from the Soviet Union could not be achieved in the short run.

In the international arena, the 1960s were marked by an uncompromising stance toward the Latin American elites and the United States. Castro’s 1962 Second Declaration of Havana saw revolution as inevitable in Latin America due to class oppression, economic exploitation, and oligarchic domination by pro-U.S. repressive regimes. As a strategy, the Cubans gave direct material support to revolutionary movements in Nicaragua, Guatemala, Venezuela, and Colombia (Kruijt, 2017). Guevara went to fight in Bolivia, where he was killed in 1967. While this strategy struck a responsive chord among revolutionaries throughout the Americas, it made normal relations with most governments impossible.

Decade of the 1970s: Economic Changes

The decade of the 1970s in Cuba saw a more sober approach in economic policymaking, internal governance, and foreign affairs. In hindsight, this was the decade when the Cuban Revolution was successfully institutionalized. The longevity of the Cuban revolutionary project was secured in a series of crucial policy shifts following the failure of the sugar harvest. As a starting point, the party, and Castro himself, took full responsibility for the shortfall. There was no significant scapegoating, nor did the events result in a purge of party leadership. The response to the failure was policy initiatives in economics and politics that were probably long overdue. The changes were not instituted hastily but rather introduced gradually over the course of the next decade.

The changes in the economic arena were considerable. The failure of the economic projects of the 1960s led the Cuban leadership to reluctantly conclude that the only viable economic strategy was to move toward economic integration with the East European Council for Mutual Economic Assistance (CMEA). Integration into the CMEA meant that Cuba would primarily concentrate on the production of sugar, nickel, and citrus products in return for oil, manufactured goods, and canned foods. This arrangement worked in large measure because Cuba received a guaranteed return for its exported primary products, something it likely could not have obtained in the open, world capitalist market. Cuba received an especially favorable exchange rate on Soviet oil for its sugar. This arrangement essentially shielded Cuba from the dramatic rise in world energy prices that occurred between 1973 and 1982, devastating many third-world economies. By the mid-1980s, 85% of Cuba’s export–import trade was with the CMEA countries. The only major trade that occurred with the capitalist world was in prized Cuban tobacco. During this period, Cuba did not abandon its goal of increasing food self-sufficiency and developed more domestic industries, but inevitably these efforts did take a back seat to meeting the production goals for the CMEA.

During this time, the Cuban consumer did not always directly benefit from the overall growth of the economy because of its primary export orientation, but the wealth redistribution policies of the revolution did result in a significant sharing of the benefits of CMEA membership. In 1970, virtually all consumer goods were rationed; but by the mid-1980s, only 30% of income was being spent on rationed goods, and by 1989 the ration had all but been eliminated. By the end of the 1980s, Cuba had constructed one of the most egalitarian societies in the world, free of the malnutrition and hunger that marked most of its Central American and Caribbean neighbors. However, even at Cuba’s height, the Cuban consumer still suffered from a lack of variety and quality of goods available to buy. When the economic shocks of 1989 occurred, Cuba had not yet achieved a fully developed socialist economy.

Cuban Response to the Collapse of the Soviet Union

Dramatic changes began in Cuba with the fall of the Berlin Wall in November 1989 and were accelerated by the collapse of the Soviet Union at the end of 1991. These events impacted Cuba strongly because, at the beginning of 1989, virtually all of Cuba’s foreign trade (85%) was with the Soviet Union and other socialist countries of the CMEA. Cuba was dependent on the CMEA for most of its energy supplies, fertilizer, machine tools, and canned foods. The CMEA arrangement to purchase Cuban sugar, nickel, and other primary products had led to significant economic and social progress after 1970, but the sudden and unexpected loss of these markets wrecked the Cuban economy. In 1989, Cuba imported 13 million tons of oil from the Soviet Union, but by 1992 it was able to import only 6 million tons, all of it at world market prices. The importing of canned food from Eastern Europe was ended altogether. By 1993 Cuba had lost 75% of its import capacity, and the country’s economic activity contracted by 40%. Outside the context of war, no modern economy had been so devastated in the 20th century. The destruction of the economy resulted in the return of rationing for basic necessities.

The return to rationing was clearly a setback for Cuba, but it also meant that the country was not abandoning its socialist principles. In announcing what he called the “special period in a time of peace,” President Fidel Castro declared that the hardships were to be shared, and no one was to be left on his or her own. The equitable rationing of goods was in stark contrast to most of the rest of Latin America, where “structural adjustment programs” often resulted in food prices beyond the means of the majority, who are poor and experience consequent malnutrition. No medical facilities or schools were to be closed. The Cuban government honored this pledge over the ensuing years. To earn immediate hard currency, a program to dramatically increase the tourism industry was implemented despite the social problems, such as drugs and prostitution, that come along with it. From just a $165 million industry in 1989, tourism revenues grew to $850 million in five years as successful foreign investments in new facilities were attracted from Europe and Latin America. Today, tourism is a primary engine of the Cuban economy, with 4.5 million visitors annually and revenues of more than $6 billion ( The tourism sector thrives even though U.S. visitors make up less than 20% of the total, the majority coming from Canada, Latin America, and Western Europe.

To spur foreign investment, changes were made in Cuban law to allow full recovery of investments in three years and relatively easy repatriation of profits. Latin American businesspeople, particularly Mexicans, were seriously courted by the Cuban government. By 1994 over 150 foreign–Cuban joint ventures were under way, comprising over $1.5 billion invested from many other countries, including Spain, Canada, Germany, and Israel. These efforts have been limited by the aggressive efforts of the U.S. government to prevent foreign business investment in Cuba. First the Torricelli bill in 1992, and then the Helms–Burton legislation of 1996, tightened the long-term U.S. embargo on Cuba by punishing firms that make investments on the island. Although the legislation, especially Helms–Burton, has caused friction between the United States and its allies, its presence does represent an obstacle to Cuba’s further reintegration into the current world economy. The Obama administration, as part of its 2014 opening to Cuba, called on the U.S. Congress to end the embargo, but as of this writing no action had been taken and the current Trump White House has repudiated Obama’s opening and pledged to maintain the embargo.

Several other factors beyond the turn to tourism have also been crucial to Cuba’s economic survival in the post-Soviet period. Recognizing the worldwide demand for mineral commodities, Cuba has invested heavily with foreign assistance in nickel mining and is in the process of becoming the second-leading supplier worldwide and is also a major producer of cobalt. Cuba’s relationship with Venezuela has also been crucial to its economic health, providing Cuba with the bulk of its imported oil needs in return for the presence in Venezuela of more than 40,000 Cuban professionals, primarily medical personnel. The Cuban medical presence in Venezuela is just one part of a major Cuban economic engine. The exportation of Cuban professionals to more than 50 countries worldwide provides both important medical services in the lesser developed world and billions of dollars annually to the Cuban economy. Cuba also manufactures drugs that are gaining a foothold worldwide (Kirk, 2018).

Another important contribution to the Cuban economy, as for other Latin American and the Caribbean economies, is remittances sent by Cubans living abroad, mainly in the United States. While exact figures are difficult to ascertain, the amount probably surpasses $2.5 billion. Cuba’s move away from sugar has also been crucial to its economic transformation. Cuba once supplied 35% of the world’s sugar exports, but that figure is now less than 10%, with fewer and fewer Cuban workers employed in the sugar sector, and much less state investment in the sector.

Despite the transformation of the Cuban economy and robust annual economic growth after 1995, the economy has remained a major challenge for the country, especially in the last several years. First, hurricanes did major infrastructure damage, and then tourism, remittances, and nickel prices all took a hit during the 2008–2009 international economic crisis. Combined with ongoing problems of productivity, especially in the agricultural sector, by 2010 the Cuban economy was at a crossroads as the Communist Party prepared for its first congress in 20 years. The Cuban leadership responded to the economic challenges by proposing the most significant economic reforms since the 1960s. The government announced that it would ultimately reduce government employment by approximately 20%—1 million workers—and move those workers into a market-oriented service sector and increase agricultural production by enticing people back to the land. In the years since the reforms were announced, there have been some significant developments. Thousands of Cubans have opened small businesses, selling items ranging from used clothes to food, as the government has authorized hundreds of occupations for private work. In another important nod to the market, Cubans are now allowed to sell homes and cars, and a vibrant market has developed in both arenas. The government’s effort to revitalize the agricultural sector has met with limited success, and the process of reducing jobs in the state sector has moved very slowly in part due to relatively high taxes placed on the new businesses.

While the reforms are significant, they leave the overall economy under state control. Further, there is no clear indication whether such wholesale changes will be successful in the short term or whether the government will follow through with all the planned job reductions in the state sector. The government has also announced that the basic food ration will be phased out and replaced by a system that targets only the neediest, but, as of this writing, that change has not occurred. The reforms will need to tap into the long-latent entrepreneurial instincts of segments of the Cuban population and if successful will create wealthier Cubans who will challenge the long-held egalitarian values of the Cuban system and potentially form an independent political force.

Political Process

The 1970s saw an overhaul of the Cuban political process with the institutionalizing of the formal organs of government power, known as People’s Power. These institutions, created island-wide in 1976, represented a shift in governance structures from the first phase of the revolution. The 1960s had seen the consolidation of the Cuban Communist Party (PCC) and the utilization of the neighborhood-based Committees for the Defense of the Revolution (CDR) as dual governing organs. The CDR was designed in 1960 for security purposes, reporting on the activities of counterrevolutionaries and supporting governmental policy. The leadership recognized that the CDR could not rule the country, and that task was given to the PCC, created in 1965. The PCC’s origins can be traced to 1961 when the alliance with the old Communist Party (PSP) was formalized with the creation of the Integrated Revolutionary Organization (ORI). It was viewed as temporary, and with 16,000 members it was reorganized in 1963 into the United Party of the Cuban Socialist Revolution (PURSC). The PURSC was then acknowledged by the Soviet Union as a legitimate communist party. The final stage of party development began in October 1965 with the launching of the PCC, an organization modeled after the Soviet one. It had a small politburo at the top composed primarily of Sierra Maestra veterans and a handful from the old PSP, a central committee of a few hundred members, and a National Party Congress that was to meet every five years to establish broad policy guidelines. Actually, there was little change in governance style for several years. The first Party Congress was not convened until 1975; in the interim, decision-making revolved almost exclusively around the small core of 26th of July Movement veterans who had led the revolution from its beginning. However, after 1975 the party and its formal structures grew in importance. By 1980 party members occupied nearly all the important positions with the state ministries, the armed forces, and the education system. Like other communist parties, it was a limited-membership organization, acknowledging 800,000 members at its 2011 Congress. Most members start early, beginning as Young Pioneers when teenagers, then becoming Young Communists when they enter adulthood, and finally party members a few years later. Their material rewards are generally limited, yet they have always been favored by somewhat easier access to housing and consumer goods.

The Cuban government never functioned as smoothly or as efficiently as the creators intended. During the early years, costly planning and administrative mistakes were made, some the result of inexperience and others the result of adopting inappropriate Soviet models. In response, popular participation in policy implementation was proposed through newly created government organs called People’s Power. Following a trial run in Matanzas province in 1974, the institutions were established nationwide in 1976. Still in operation today, People’s Power is composed of municipal, provincial, and national assemblies that are assigned the task of supervising government agencies within their jurisdictions and, at the national level, formulating laws and regulations for the society as a whole. Cuba has 168 municipalities under Cuban Law Number 1304 of July 3, 1976, reformed in 2010 with the abrogation of the municipality of Varadero and the creation of two new provinces, Artemisa and Mayabeque, in place of the former La Habana province. These municipalities are then divided into electoral districts where roughly every 1,000 to 1,500 voters (fewer in some rural areas, more in other areas) elect one representative to a Municipal Assembly of People’s Power for a term of two and a half years. In each of these constituent districts, an electoral committee is appointed to oversee the nomination of candidates. The district is broken down into subdistricts, each of which can propose one candidate. This process produces from two to eight candidates maximum from each district; by law there must be at least two nominees—an uncontested election is not permitted. The electoral commission, in collaboration with each candidate, posts the candidate’s biography and photo in all public places such as schools, markets, convenience stores, and local clinics for electors to consult at their convenience. There is no cost incurred by the candidate. Candidates are not permitted to campaign and can be disqualified if they are judged to be doing so. Run-off elections are often necessary to obtain a majority vote. In the 2012 municipal elections, as a first step in the national elections of 2012–2013, from a total of 32,183 candidates, 13,127 municipal delegates were elected in the first round. In 1,410 districts none of the candidates got the required minimum 50% of the valid vote; thus, there was a second-round election between the two aspirants who got the highest vote.

Of the elected delegates, 33.5% are women and 14.7% are young people between the ages of 16 and 35 (August, 2013). Municipal delegates are not paid for this work. Thus, they carry it out on a voluntary basis. Municipal deputies must be available to their constituents one evening per week to receive their complaints or opinions. However, in practice many delegates receive visits several times a week from their neighbors, who are their constituents. Every six months there is a formal accountability session in which complaints, suggestions, and other community interests are raised with the delegate. Delegates are not professional politicians and are generally given time off from their full-time jobs to carry out these functions. There is traditionally considerable turnover among municipal delegates, varying from more than one-half to one-third, as a result of various factors—for example, delegates not willing to be elected for another term because of the difficulty of working as a volunteer after work or study hours, or citizens not re-nominating an incumbent because of perceived lack of competence. Some have compared their position to that of county supervisors in the U.S. system, providing a link to the local population with only limited powers of their own. The municipal assembly has committees responsible for such areas as education, health, and economic affairs. In 1989 people’s councils—groups of delegates from within a municipality—were created in Havana to make government more accessible. By 1993 the people’s councils were adopted throughout the country.

The Provincial People’s Power Assemblies can propose projects and assign priorities to housing, hospitals, and other projects. The provincial legislatures and their executives act as intermediaries between national policy and its execution at the local level. The provincial government allocates its budget, received from the national level, among the various municipal units. This is done by collecting requests and advice from the lower levels. The assemblies are responsible for selecting the directors for industries, for moving personnel from one job to another, and for replacing persons who are removed or retire. However, not all enterprises report to the provincial level; some report directly to the national level.

The highest organ of government is the 612-member National Assembly of People’s Power. It is elected by an innovative Cuban notion whereby up to 50% of the deputies are made up of the local municipal delegates (in 2013, 46.41%) (August, 2013). The idea is to maintain the closest possible link between the parliament and the electors, and thus the municipal elections are the first of two steps in the national elections held every five years. The other half is composed of political, social, scientific, cultural, and sports figures. As the legislative body of Cuba, the assembly passes the budget, confirms heads of ministries, makes laws, selects Supreme Court justices, and sets basic economic policies. It meets only infrequently to ratify decisions and draw public attention to national issues. The primary work of the assembly, as in many other legislative bodies worldwide, is done in standing committees. These committees investigate and prepare reports and propose laws to be debated during National Assembly sessions. Their role is mainly consultative and investigative, and they conduct public hearings. The assembly, whose deputies are elected for five-year terms, also elects from among the deputies a 31-member Council of State, including the president and first vice president. The Council of State nominates with the approbation of the National Assembly, the Council of Ministers, or cabinet. Both councils run the government on a day-to-day basis between assembly sessions, to which they are accountable.

The president of the Council of State is both head of state and head of government. This gives him the power to nominate members of the Council of Ministers, all of whom are subject to confirmation by the assembly. Raúl Castro was elected president in 2008 when his brother, Fidel, stepped aside for health reasons. Raúl was re-elected in 2013 for a second term but declared he would not seek re-election in 2018 based on a new Party Congress decision limiting the presidency to two terms. In addition to its executive functions, the Council of State can legislate by issuing decree laws when the assembly is not in session. The Council of State is also responsible for the court system. Women represent 48.86% of the 2013 National Assembly, the third-highest level of female representation in the world. Among the assembly deputies, 62.91% are white and 37.09% are black or mulatto. The average age is 48 years old (August, 2013). Typically, the largest group of delegates are leaders of local government, and the second-largest group are industrial workers, farmers, educators, health service employees, and others directly tied to production and services. Not surprisingly, the Communist Party apparatus has at least 50 of its operatives in the assembly.

The PCC is not legally an institution of the government, but by constitutional mandate and in political practice it rules the country. As stated, party members dominate the legislative bodies at all levels. The direction of the Communist Party officially lies in its National Congress, but the body meets rarely. The 2016 Congress was only its seventh in more than 50 years. When the Congress meets, it adopts a set of broad policy goals and elects the Central Committee, the ongoing policymaking body of the party. The committee meets in plenary session at least once every year and officially is the highest body of the party between sessions of the party congresses. Selection to the committee is prized, a mark of honor and prestige in Cuban society. The 150-member Central Committee works as a planning body and shadows the implementation of party policies by the government. Virtually every person of importance in Cuba is a member or alternate member of the Central Committee, from generals and provincial heads to top medical personnel and administrators. Little is known about the internal workings of this body, but it is said to operate on the basis of consensus since the formal existence of factions is prohibited.

The primary question facing the aging revolutionary generation is how to stage a political transition to a new generation of leaders who have both the capacity and commitment to retain the social and political achievements of the revolution while adapting to a wider world context dominated by the free enterprise system. While the day-to-day administration of the Cuban government has passed into the hands of the next generation, at the highest levels, control is still significantly in the hands of the Sierra Maestra generation, men in their eighties. Initially, Raúl Castro relied on officials with whom he worked in the armed forces to lead key ministries, in the process postponing the transition to a younger generation. Younger leaders have appeared in the membership of the all-important Party Central Committee, elected at the long-delayed sixth Party Congress. As previously mentioned, in an important reform, the Congress supported a constitutional change limiting the service of the Cuban presidency to two terms. In an important nod to the younger generation, the newly elected Cuban parliament in 2013 chose 52-year-old Miguel Diaz-Canal as first vice president. In 2018, Diaz-Canal assumed the presidency of Cuba by a vote of the newly elected Cuban parliament.

The year 2018 saw a further deepening of Cuba’s economic reforms with manifestation in the political realm. Just three months after Miguel Diaz-Canal assumed the Cuban presidency, Cuba embarked on constitutional reform designed primarily to regularize the legal status of Cuba’s emergent private sector in the light of the 2011 and 2016 reforms. The draft constitutional changes were opened to nationwide public debate and will be submitted, after revisions, to a national referendum in 2019. The constitutional changes do not alter the 1976 constitution in that they reaffirm that the core of the system will remain state-owned enterprises and that the Communist Party will remain the sole, legal political party. The changes are centered around the legalization of private enterprise and employment, a prohibition on expropriating private property except for public purposes with compensation, and a guarantee for foreign direct investment.

Independent of the constitutional changes, more than 100 pages of new regulations went into effect in December 2018 with two primary purposes—collecting greater tax revenue from the private sector and reining in unauthorized private sector activity. These actions follow former President Raúl Castro’s attack on private businesses in 2017 for tax evasion and black marketeering. Some of the new regulations are designed to protect the public from dangerous behavior by the private sector, especially in food preparation, but other regulations are clearly designed to limit the ability of private businesses to compete with the state sector, including rules to curtail the growth of individual businesses by limiting the number of licenses that can be held by one person. The latter rule, which goes against the concept of economies of scale, is clearly aimed at preventing one group of people from accumulating too much wealth. In many ways the constitutional reforms represent a compromise between Cuban leaders who believe that a robust private sector is the key to Cuban prosperity and those who believe that the success of the sector will seriously undermine the egalitarian nature of the Cuban Revolution and threaten the socialist character of the system (Leogrande, 2018).


Cuba in the second decade of the new millennium is as interesting as ever. Fidel Castro passed away in November 2016 after ten years of retirement from public life during which time even Fidel himself admitted the Cuban economic model no longer works, and as a result, the government launched the dramatic economic reforms described here. They are clearly intended to preserve Cuba as a socialist system under the leadership of a new generation of Cuban Communists, now transferred to Miguel Diaz-Canal. The market mechanisms being adopted threaten the island’s vaunted egalitarianism, but if they succeed, not for the first time Cuba will be an inspiration to those in the world looking for a successful model of social justice.


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