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  • Updating Cuban Socialism:The Politics of Economic Renovation
  • William M. LeoGrande (bio)

"either we change course—because we no longer have time to keep on skirting around the precipice—or we will sink," President Raúl Castro warned. "It is the life of the Revolution that is at stake." Castro minced no words in his address to Cuba's National Assembly in December 2010, just months after unveiling his comprehensive program for "updating" the Cuban economy. The old model of central planning adopted from the Soviet Union had stifled productivity to the point that the agriculturally well-endowed island had to import more than 70 percent of its food, a large percentage of state enterprises operated in perennial deficit, and the state itself faced a chronic shortage of capital to finance investment and of hard currency to finance essential imports (Sánchez Egozcue 2015).

Castro's campaign to move the Cuban economy toward a more market-friendly model of socialism represented the last major project of "los históricos"—the historic generation that founded the revolutionary regime in 1959. By 2010, many of the old guard—including Fidel Castro himself—had succumbed to the march of time. But a handful, concentrated in the Cuban "cupola"—the top decision-making institutions of the state and Communist Party—remained in charge. It was their duty, Raúl explained, to correct the errors they had made over the previous half-century and hand the next generation a socialist system that was "prosperous and sustainable" (Castro 2012). [End Page 353]


The Cuban economy was neither prosperous nor sustainable when Raúl Castro assumed the presidency after his brother Fidel fell gravely ill in July 2006. Cuba had never fully recovered from the "Special Period"—the deep depression that followed the collapse of the Soviet Union and the consequent loss of $3 billion in annual aid. Although the economy grew gradually over the ensuing decade and a half, the gains were concentrated in tourism and medical services (exported primarily to Venezuela in exchange for cheap oil). The actual production of goods on the island had not regained 1989 levels. Hard currency earnings, even when supplemented by some $3 billion in annual remittances, were hardly enough to cover essential imports of food and energy.

Raúl Castro wasted no time before unleashing a barrage of sharp, candid criticism of the economy, placing the blame for its failures squarely on Cuba's own policies rather than on the US embargo. The central problem, he said bluntly, was low productivity. "No country or person can spend more than they have," he reminded his comrades. "Two plus two is four. Never five, much less six or seven—as we have sometimes pretended" (Orsi 2011). Cuba needed to "untie the knots holding back the development of the productive forces," starting with excessive state regulations (Castro 2011a).

Once Raúl had been elected president in his own right in 2008, he proceeded to eliminate a number of prohibitions that ordinary Cubans found especially exasperating. The government legalized the sale of computers and cell phones, and eliminated rules against Cubans staying in tourist hotels. In 2011, it legalized private real estate and automobile markets, allowing Cubans to buy and sell houses and cars directly with one another, without the state acting as middleman. In late 2012, the government eliminated the tarjeta blanca, the exit permit required whenever a Cuban wanted to travel abroad. These changes by themselves were not economically strategic, but their popularity built political capital for the government to carry out a much more profound reorganization of the Cuban economy—with its attendant social disruption. [End Page 354]

The blueprint for "updating" the Cuban economy—the Guidelines of the Social and Economic Policy of the Party and the Revolution—was unveiled in November 2010, and after five months of discussion in grassroots meetings of the Communist Party and mass organizations, a revised version of the Guidelines was approved in April 2011 by the Sixth Congress of the Communist Party of Cuba (Partido Comunista de Cuba 2011). Perhaps the most important change articulated in the Guidelines was philosophical: the "nonstate sector" (private enterprises and cooperatives) was cast as...


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