Havana unveils 176-point reform package including private business expansion and price decontrol; State Department dismisses moves as a tactic for regime survival; Trump administration to maintain oil blockade and sanctions

Cuban Deputy Foreign Minister Carlos Fernandez de Cossio speaks at a press conference in Havana on Friday (local time). [EPA]
Cuban Deputy Foreign Minister Carlos Fernandez de Cossio speaks at a press conference in Havana on Friday (local time). [EPA]

By Seo Ji-yeon, The Herald Business

Cuba has unveiled its most sweeping market-opening measures since adopting communism, but the United States dismissed the package as "superficial smoke and mirrors" and signaled it would hold firm on sanctions. Havana appears to be reaching for a China- or Vietnam-style reform model to escape its economic crisis, yet Washington made clear that no sanctions relief will come without genuine systemic change.

The State Department on Friday downplayed the sweeping economic reform package Havana announced the previous day, calling it "too little, too late," according to AFP.

A State Department spokesperson said the announcement was "a classic tactic from the authoritarian playbook," adding that the government would "announce reforms to appear as though it wants change, then reverse those changes the moment its absolute control is threatened."

Cuban Prime Minister Manuel Marrero had earlier unveiled a pro-market reform package comprising 176 measures aimed at pulling the country out of its economic crisis.

The package includes expanding private business activity, abolishing price caps, granting state enterprises greater autonomy, attracting more foreign investment and modernizing the financial system.

Analysts view the moves as an attempt to adopt the China-Vietnam model of reform and opening-up — and some describe them as the most far-reaching economic reforms Cuba has undertaken since it embraced communism in the 1960s.

Cuba's economy has been in serious distress for years. US sanctions, a slump in tourism and a chronic shortage of foreign currency have combined to produce persistent shortages of food and medicine, while deepening power outages have brought economic growth to a virtual standstill.

The Trump administration has intensified pressure on Cuba this year in particular.

Washington has moved to cut off the flow of Venezuelan oil, which had been Cuba's main crude supply, and has continued to enforce economic sanctions and financial pressure.

"President Donald Trump will continue to apply pressure to bring about more meaningful economic and political reforms that would make Cuba a country worthy of investment and provide the Cuban people with freedom, dignity and opportunity," the State Department said.

The United States has made clear that economic reforms alone will not be enough to improve relations — sanctions relief or normalization will not be on the table unless political reforms and systemic change accompany them.

Experts say Cuba has little choice but to push ahead with market opening to keep its economy afloat, but warn that the reforms' impact will remain limited as long as Washington maintains its hard line.


sjy@heraldcorp.com