When Cuba held its Sixth Communist Party Congress in April—the first since 1997—the rituals felt familiar. It kicked off with a mass military parade through the streets of Havana and closed with a rousing rendition of the “Internationale.” Raúl Castro, who in the past few years has assumed the reins of power from his ailing brother Fidel, praised the revolution and promised he would never permit the return of capitalism. Politics as usual? Yes and no. Despite appearances, major—if gradual—changes are afoot on the island.
Cuba is undergoing a kind of silent transition. A series of economic reforms are shrinking the size of the state-run economy and making room for a greatly expanded private sector. The socialist dream isn’t over, but it’s been sharply redrawn. That Cuba is becoming a mixed economy is no longer under debate. What is under debate is what exactly that new economy will look like, how widely the benefits will be spread and why the reforms are proceeding so slowly.
One year ago Raúl Castro announced twin initiatives: mass layoffs to relieve the state’s budget and a long list of newly approved categories in which people can start small private businesses. After a draft version of the reforms was released, massive assemblies were held throughout the country, organized in places of employment or neighborhood associations. In April the final draft of the reform package was passed in the Communist Party Congress.
Since the policy began, the government has granted some 330,000 licenses, and for the first time since the 1960s the newly self-employed (known as cuentapropistas) are allowed to hire other Cubans, not just family members. The government’s stated goal is to have nearly half the populace working in the private sector by 2015. For a country where nearly 90 percent of the economy was once in state hands, that will be a major about-face.
Several weeks ago a new law permitted the sale of cars, with some restrictions. Additional proposals on the table would permit the sale of houses, establish a system of government-provided credit and eventually eliminate the food rationing system. These are all staggering announcements in the Cuban context.
But the biggest change of all may be how the role of the state is reconceptualized. Cuba’s leaders now argue that the state can no longer afford the “paternalism” of the country’s socialist heyday. They imply that citizens are a burden on the state, enjoying costly social services and goods at negligible prices. In his speeches, Raúl has downplayed the old themes of Cuba’s heroic struggle against imperialism and its bright socialist future. The new mantra stresses efficiency, productivity, the need to work. And so, unable to maintain its “bloated” payrolls, the state has begun shedding workers. Although Raúl assured Cubans that no one would be “abandoned to their fate,” he also sternly warned that the idea of Cuba as “the only country in the world where you can live without working must be erased forever.”
Cuba has experimented with liberal economic reforms in the past, most notably in the 1990s. Battered by the fall of the Soviet Union, the government encouraged private foreign investment and granted licenses for small private businesses such as family restaurants and bike repair shops. But these concessions were viewed as a necessary evil. By the end of the decade, as the economy stabilized, they were scaled back. The difference now is that the leadership actually embraces the notion of a robust private sector. According to Omar Everleny, a professor at the Center for the Study of the Cuban Economy at the University of Havana, this time the reforms won’t be temporary. “When you read the Guidelines and Raúl’s speeches, you realize he’s determined to change things. At the same time, I also realize he’s committed to the past, and that’s the complicated part—his commitment to history,” he said. “But he’s made the decision not to turn back.”