Cuba OKs 176 Reforms Allowing Private Banks, Real Estate

The Cuban National Assembly in Havana on Thursday approved 176 reforms to open the economy to private investment, allowing private banks, private sales of state property and larger private firms.

The package permits private banks to operate under state oversight, lets the government sell parts of its real estate holdings to Cuban and foreign buyers, and removes limits that previously capped private firms at about 100 employees.

Lawmakers approved the reforms in a single package. Implementing regulations will be needed to define ownership rights, taxation, licensing, bank supervision and rules for repatriation of profits.

Officials described the changes as a response to acute economic problems on the island. The government has reported prolonged fuel shortages, frequent power outages and a sharp drop in revenue.

In remarks to the assembly, President Miguel Díaz-Canel described Cuba as facing ‘its most difficult hour’ and added, ‘When the people’s lives become so hard, the primary duty of the Communist Party and the Revolutionary Government is not to better explain the crisis, but to change whatever is necessary to overcome it.’ He concluded, ‘It is time to change everything that needs to be changed.’

Cuban officials say the reforms aim to stimulate construction, attract foreign capital and expand domestic production by allowing private financing and larger private enterprises. They say regulatory details will determine how quickly investors and firms move.

U.S. sanctions on state-linked companies preceded the vote. Washington imposed measures targeting Grupo de Administración Empresarial S.A. (GAESA) and the state oil company Unión Cuba-Petróleo (CUPET); U.S. officials cited allegations involving secondary oil sales amid energy shortages in Cuba.

Some analysts and Cuban leaders have pointed to those sanctions and internal fiscal pressures as factors behind the decision to change economic rules.

Former president Raúl Castro supported the package. He has been indicted by the U.S. Department of Justice in connection with the 1996 shootdown of two unarmed U.S. civilian aircraft operated by Brothers to the Rescue.

The National Assembly said the reforms will be implemented through additional rules and supervisory structures. The timing and details of those rules will shape the pace at which private banks open, state property is sold and private firms expand.