Cuba Shifts Towards Open Economy

COVID-19 will undoubtedly have lasting effects on the world, one of many being the change to the Cuban Communist Party’s policy. Source: Wikimedia

As COVID-19 continues to devastate economies around the globe, countries have begun searching for innovative ways to jumpstart their economies. Cuba has turned to the creation of a new, free market as its solution.

 The Cuban economy has been particularly susceptible to COVID-19 because of Cold War era sanctions. The sanctions put into place by the U.S. were briefly lifted by the Obama administration in 2016, only to be reinstated a year later by former President Donald Trump. Trump’s new, more severe sanctions, in tandem with the pressure the COVID-19 pandemic placed on the country’s economy, caused an 11 percent contraction of the Cuban economy in 2020 alone, according to the Cuban Economic Minister.

With the economy facing the greatest recession Cuba has seen in recent years, the government believes that a drastic change is required to bring the economy back to life. This change comes in the form of a more open, private economy.

All but a select few areas of the economy are to be removed from the public sector, a move experts think will help Cuban markets recover sooner, encouraging the government to finally consider long term calls for a larger private sector.  

Turning to the private sector due to the promise of faster recovery and the opportunity for long term growth has been regarded as a popular move. Cuban entrepreneurs now see a chance to expand their business into the new private sectors, and many foreign experts believe that the reforms will create “faster growth and new job creation.” Juan Triana Cordoví, a Cuban economist, says the reforms “should have happened a long time ago.” 
COVID-19 will undoubtedly have lasting effects on the world, one of many being the change to the Cuban Communist Party’s policy. It is the first step towards Cuba’s reintroduction into the international market. U.S. President Joe Biden’s more lenient foriegn policy in combination with Cuba’s apparent shift towards capitalism could therefore mark the beginning of a new era for both Cuba’s economy as well as for U.S.-Cuban relations.