HAVANA – Cuba is preparing to loosen some of the tightest controls over its communist economy, allowing private companies to trade directly with foreign businesses, giving foreign investors greater freedom to hire workers and expanding their ability to develop real estate on the island.
The changes, expected to begin taking effect as early as this week, would make recently announced reformsinto law. And it could amount to a significant opening of Cuba’s economy at a time when the Trump administration is chokingthe country with an oil blockade and economic sanctions.
Carlos Luis Jorge Méndez, Cuba’s deputy minister of foreign trade and foreign investment, told USA TODAY in an exclusive interview in Havana that the measures are among the most consequential
of 176 economic reforms approved in June. He said they represent a lasting shift rather than another temporary experiment with private enterprise.
“This reinforces the idea that Cuba is opening up,” Méndez said in a wide-ranging interview with USA TODAY that included the status of U.S.-Cuba talks and the effect of recent U.S. sanctions on Cuba’s private sector. “This is a real process, this is for real. This isn't a ploy.”
When first announced in June, the reforms were applauded by some analysts and U.S. and Cuban entrepreneurs. The U.S. government called it window dressing.
How Cuba turns the reforms into lasting law remains a key question.
Cuba’s amendments and promises of reform are a “good trajectory” to where the island’s private sector should be headed, said John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a trade group that has been dealing with Cuba since 1994.
But Cuba would need to amend its constitution to make the reforms permanent, he said. Previous economic reforms, during a rapprochement with the administration of President Barack Obama, were later rolled back by Cuban leaders.
The Cuban government “will increasingly discover the more changes it makes to policies, regulations, and statutes relating to the private sector in Cuba … the more questions will be created about the sustainability of those changes,” Kavulich said. “The constitution of Cuba will need to be adjusted – and there is not much time to do it.”
The moves to open Cuba’s economy to foreign investment come amid heightened tensions between the United States and Cuba. Direct talks between the two countries appear stalled. The United States had been looking for an interlocutor with Cuba and made overtures with Raúl Guillermo Rodríguez Castro, grandson of former Cuban president Raúl Castro, according to an exclusive USA TODAY interview in July.
Meanwhile, Cuba faces a deepening humanitarian crisis in the wake of increased sanctions and an oil blockade from the Trump administration, which has projected a military threat against the island unseen since the 1962 Cuban missile crisis. Secretary of State Marco Rubio announceda new round of sanctions Aug. 20.
“Every time they create a new mechanism in which they try to get out of the noose, we just close it off," Rubio told Axios.
Méndez confirmed the two countries broke off talks until they could find common ground.
“We maintain our position and are willing to continue the dialogue,” he said.
According to Méndez, other Cuban economic measures expected to be announced or made law this week include:
- Private Cuban companies will be able to handle imports and exports directly without going through a state agency and import whatever they choose, with some exceptions.
- Cuba will eliminate a provision in Cuban law that requires foreign investors to hire workers through a state agency.
- The government will expand foreigners’ rights to develop real estate in Cuba.
Méndez echoed Rodríguez Castro, saying the communist country is ready to negotiate with the U.S., further open its economy to foreign investment and allow the private sector to flourish, something U.S. administrations have sought through the decades.
All the reforms should be law by the end of the year, Méndez said.
“There are transformations we are making that are changing the way the national economy behaves so profoundly that they will be very difficult to reverse,” Méndez said.
This article originally appeared on USA TODAY: 'Cuba is opening up.' Reforms begin as US tightens grip | Exclusive
