By Alejandra Garcia Elizalde on November 2, 2026
foto: Bill Hackwell
As Cuba faces one of its most challenging economic periods in decades, the government is pursuing a transformation of its state-run business system aimed at increasing production, improving efficiency, and preserving public ownership of strategic resources.
The initiative forms part of 176 economic and social measures presented to the National Assembly on June 18, 2026. It seeks to expand business autonomy, decentralize decision-making, attract investment, and modernize management practices without abandoning the country’s socialist development model.
The reforms come at a particularly difficult moment. Energy shortages, financial constraints, and the longstanding U.S. economic blockade have disrupted industrial production and limited the availability of essential consumer goods.
Across Cuba, factories have been forced to reorganize operations around electricity availability. In some facilities, workers begin shifts at midnight or in the early morning to take advantage of periods when power is restored.
The consequences extend beyond industrial performance. Interruptions affect food processing, manufacturing, transportation, and the production of hygiene products, textiles, and footwear.
According to Carlos Boggiano, Production Director at the Light Industry Business Group, the sector received only 6% of the fuel allocated during the first quarter of 2025 in the corresponding period of 2026.
Enterprises have responded by reorganizing work shifts, introducing remote work where possible, exploring electric transportation, and reallocating personnel to priority activities.
However, these emergency responses cannot substitute for structural changes that enable companies to operate more efficiently and respond to the population’s needs.
Greater Autonomy for State-Owned Enterprises
The central component of Cuba’s economic transformation is the expansion of managerial autonomy within the socialist state-owned sector.
According to the National Office of Statistics and Information, Cuba had 2,082 state-owned enterprises and 234 public micro, small, and medium-sized enterprises as of June 2026.
Under the proposed reforms, state enterprises would gain greater flexibility to determine prices, allocate profits after fulfilling tax obligations, establish organizational structures, and pursue lawful economic activities.
The measures also contemplate changes to salary regulations, allowing remuneration systems to respond more closely to economic conditions and business performance.
\Provincial and municipal governments would receive broader authority to establish, reorganize, or dissolve local enterprises, reducing administrative centralization.
Another significant proposal introduces mechanisms for corporate restructuring, bankruptcy, and conversion into joint-stock companies.
Nevertheless, the state would retain majority ownership in sectors considered strategic, including agro-industry, pharmaceuticals, healthcare, science, technology, and innovation. The objective is not to eliminate public ownership but to make it more productive, flexible, and financially sustainable.
Prime Minister Manuel Marrero has emphasized that socialist planning must recognize market mechanisms while ensuring they remain aligned with national development priorities.
Technology and Institutional Modernization
Digital transformation constitutes another important component of the reform package. Cuba plans to establish a national technological hub integrating hardware, software, and artificial intelligence. The initiative seeks to improve productivity, modernize public administration, and strengthen technological capabilities.
The proposals also contemplate foreign investment in telecommunications infrastructure, mobile networks, and data centers operated by the state-owned company ETECSA.
Alongside these initiatives, the government established the National Institute of Business Assets (INAE), responsible for supporting and supervising the transformation of the state business system.
Economy Minister Joaquin Alonso Vázquez has stressed that the institution should strengthen oversight without undermining enterprise autonomy.
Its mission includes representing the public interest in state-owned assets and ensuring that companies fulfill their economic and social responsibilities.
An Alternative to Privatization
Cuba’s approach emerges amid a broader Latin American debate about the future of public enterprises and strategic infrastructure. While several governments have promoted privatization to attract investment and address fiscal pressures, Cuba has chosen to prioritize public ownership combined with greater operational flexibility.
Argentina illustrates the competing approaches. President Javier Milei’s government has promoted the privatization of public assets, including the water and sanitation company AySA, raising questions about affordability, infrastructure investment, and universal access to essential services.
For Cuba, the central issue is not whether private capital should participate in economic development, but under what conditions and with what guarantees. The reforms contemplate increased opportunities for private and foreign investment while maintaining public control over sectors considered essential to national sovereignty.
This distinction reflects the government’s intention to attract capital and technology without relinquishing responsibility for strategic economic decisions.
Producing More to Protect Social Achievements
Ultimately, the success of Cuba’s economic transformation will depend on whether greater autonomy translates into higher production, better services, sustainable employment, and improved living conditions.
The reforms must also confront persistent obstacles, including limited financing, energy instability, administrative inefficiencies, and the effects of U.S. sanctions. Greater administrative flexibility alone cannot resolve these challenges. Effective implementation, transparent oversight, and measurable improvements in enterprise performance will be essential.
Cuba’s proposed transformation therefore represents an effort to reconcile economic efficiency with public ownership and social responsibility. Its underlying premise is that preserving the country’s social achievements requires strengthening the productive foundations that sustain them. For the Cuban government, the challenge is not simply to produce more, but to ensure that economic development continues serving the broader interests of society.
Source: Resumen Latinoamericano – English