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March 5, 2025 — HAVANA — Cuba has taken a major step toward loosening its iron grip on the economy, enacting a series of reforms that expand the role of private enterprise as the island struggles with a grinding humanitarian crisis. The new measures, approved by parliament last month and officially published Wednesday, remove or relax dozens of restrictions on private vendors, imports, and foreign investment.
The changes mark one of the most significant shifts in Cuba’s state-controlled economy since the 1960s. They allow individuals and small businesses to import and resell a wider range of goods and medicines, open private pharmacies, and permit foreign companies to extract oil with fewer bureaucratic hurdles. The government also greenlit private care facilities for the elderly, a growing need as many young Cubans have emigrated.
“These reforms truly allow and facilitate the participation of non-state economic actors in the country’s economy,” said Lázara Mercedes López Acea, president of the National Institute of Non-State Economic Actors, who presented the new regulations. “We are opening a door that had been locked for decades.”
The immediate trigger for the shift is a deepening humanitarian emergency. In January, the Trump administration intensified its oil blockade, cutting off fuel supplies that had already been squeezed by U.S. sanctions. The result has been widespread blackouts, crippled public transport, empty shelves in state pharmacies, and a collapse in basic services. Last month, President Miguel Díaz-Canel declared the country “simply cannot continue on its current course.”
Under the new rules, the government removed 46 of the 125 prohibitions on private industry and relaxed 35 other regulations. But key sectors remain off-limits: tobacco production, internet access, newspaper publishing, and radio broadcasting stay firmly in state hands. The easing appears targeted at the most acute pain points.
For example, medicines have long been obtained through sprawling informal markets on apps like Telegram and WhatsApp. Now, private pharmacies can legally sell them — a change that offers hope to people like Francisco Carbajal, a 71-year-old retiree from Havana. “What I really want is that there are medications available, because I have diabetic neuropathy and carbamazepine hasn’t arrived at my pharmacy in a long time,” he said. “Without it, I’m helpless, because I get epileptic seizures.”
The reforms also make it easier to import electric vehicles, which have become a lifeline as gasoline shortages have decimated public transport. And in the oil sector, foreign investors and private businesses will find a less restrictive environment, though the government retains control over strategic resources.
The move builds on earlier, more cautious openings. After the 2021 pandemic crushed tourism and triggered a wave of emigration, Cuba allowed the creation of small businesses and self-employment. The latest reforms go further, but experts say they stop short of the deep structural changes needed to revive the economy. “This is a necessary step, but not a sufficient one,” said Maria Teresa Fernandez, an economist at the University of Havana who has studied Cuba’s informal sector. “The government is trying to patch a leaking boat while the real engine — the state-run system — remains broken.”
The reforms come as Cuba faces a unique demographic challenge. The exodus of young Cubans has left many elderly without family caregivers. The new allowance for private care homes could help fill that gap, but funding and infrastructure remain scarce.
Observers note that the U.S. blockade remains the single largest obstacle to recovery. The Trump administration’s January measures cut off crucial fuel imports, worsening blackouts that already lasted up to 12 hours a day. The Biden administration, which has signaled a desire to reverse some of the Trump-era policies, has so far not taken action. “The Cuban government is using these reforms to show it can improve conditions without U.S. concessions,” said John Paul, a Cuba analyst at the Atlantic Council. “But without relief from the blockade, the reforms will only go so far.”
The new rules also include a provision for easier import of solar panels and other renewable energy equipment, a nod to the island’s need to diversify away from oil. But the high cost of such imports and limited foreign currency reserves will likely slow adoption.
For now, Cubans are cautiously optimistic. “Every little step helps,” said Miriam Gutierrez, a 45-year-old shopkeeper in central Havana. “But we need more than steps. We need a leap.” The government has promised to review additional restrictions in the coming months, but many Cubans remain skeptical that the state will let go of its most profitable sectors.
The reforms are also a test of Cuba’s ability to manage a dual economy: a state-controlled core and a growing private periphery. In the past, such dualism has led to corruption, inequality, and shortages. The government has announced new oversight mechanisms, but details are scarce.
As the island braces for another summer of uncertainty, the changes represent a rare moment of flexibility from a regime that has long resisted market forces. Whether they will be enough to stave off a full-blown humanitarian disaster remains an open question.
