Picture alliance / Anadolu | Magdalena Chodownik Source: International Politics and Society, Berlin

By Sandra Weiss
MEXICO CITY, Jun 29 2026 (IPS)

Ever since the Berlin Wall fell 37 years ago and the communist Eastern Bloc collapsed, Cuba has been debating economic reforms to its socialist system. Essentially, the discussion always revolves around the same issues: less state planning, more personal responsibility. In other words, a strong dose of capitalism as an antidote to inefficient and corrupt state bureaucracy.

Little has happened since then. Phases of liberalisation and opening up have been followed by phases of tightening and control. Time and again, hardliners within the party, the military and the bureaucracy have put the brakes on. The reason — the reforms fuelled inequality and resentment towards the newly wealthy privileged class. Underlying this was, above all, the fear of losing power and control, and of infiltration by the class enemy, or, in the Cuban interpretation, US imperialism.

Throwing money down a bottomless pit

Suddenly, things moved very quickly. Last week, the parliament – which had been convened in haste and with a rather incomplete quorum, as many MPs were unable to travel to Havana due to the petrol shortage – passed a 176-point reform programme which observers have described as ‘historic’ given its far-reaching implications. In the process, some of the ‘sacred cows’ of the socialist state economy are being brought down. For instance, there will be no more blanket subsidies in the future, instead, support will be targeted solely at the socially disadvantaged. This spells the end of the ‘Libreta’, the state food ration card that has granted the population access to virtually free food and hygiene products for over half a century, even though, in the face of the economic crisis, it had recently become little more than a piece of waste paper.

The second taboo to be broken is decentralisation. From now on, state-owned enterprises and provinces are to be less dependent on the central government in Havana and will be allowed to make their own decisions on staffing and wages. The absurd extremes to which this centralisation had led were captured by directors Juan Carlos Tabio and Tomás Gutiérrez Alea in their 1995 classic Guantanamera, in which a corpse had to be transported from Santiago de Cuba to Havana for burial – that is, all the way across the island, in a battle against bureaucracy.

Cuban exiles are permitted to invest directly on the island.

Private companies are finally to be permitted to operate in the agricultural sector; until now, only cooperatives had been authorised. Agriculture on the Caribbean island, once renowned for its sugar production, is now almost completely in ruins: millions of hectares of arable land lie fallow due to a lack of machinery, fertilisers, technology and labour. Cuba imports the majority of its food. Much of this comes from China, Turkey or Arab countries, but also from the neighbouring US – despite the embargoes. Private investment is now also permitted in the energy sector. The reforms will also allow individuals to own more than one private company in the future.

However, the liberalisation also targets trade, foreign investment and integration into the global economy. For example, private banks and financial institutions are to be authorised to operate in the microcredit sector. Numerous restrictions on foreign exchange transactions are being lifted. Consequently, businesses and private individuals may now open and operate foreign exchange accounts without prior authorisation. Foreign firms are permitted to select their own staff and are no longer required to go through state employment agencies. Furthermore, they are no longer obliged to enter into joint venture agreements with the state. Cuban exiles are permitted to invest directly on the island. This is intended to attract foreign investors and fresh capital.

Months ago, US Secretary of State Marco Rubio had already stated that political reforms and a change in the leadership were needed – but Havana categorically rejects this.

Almost all of these reforms have been under discussion for years. Even Vietnam and China have repeatedly urged the Cuban leadership to move in this direction, because, despite their historical ties, geopolitical interests and ideological affinities, they were tired of throwing money down a bottomless pit. Fifteen years ago, whilst the island was still receiving oil in abundance from its brother nation Venezuela and the then US President Barack Obama was reaching out to the island, the circumstances would have been ideal for such a transformation.

Now, beneath the sword of Damocles of the oil embargo and the threat of US intervention, it is actually already too late: the coffers are empty, legitimacy among the population has been squandered, and the reforms can only take effect if the US plays its part, lifts its sanctions against Cuba and supports the country’s integration into the global economy. However, that is out of the question at present. The US government holds the upper hand geopolitically and wants more. Months ago, US Secretary of State Marco Rubio had already stated that political reforms and a change in the leadership were needed – but Havana categorically rejects this.

The potential of democratization

The Speaker of the Cuban Parliament, José Luis Toledo, made it clear when the package was passed that ‘the reforms do not mean abandoning the state’s social role’. Washington’s reaction was correspondingly cool: the US State Department described the economic reforms as modest, too late and ‘superficial smoke signals’. This is a typical strategy to create the illusion of change, only to quickly reverse the reforms as soon as the regime’s control is threatened.

The strategies of either side are clear. Cuba is playing for time and hoping that Trump will lose the mid-term elections in the autumn, thereby losing his interest in Cuba and the backing for his stranglehold tactics. Washington will probably let Havana continue to squirm for the time being and wait to see whether words are followed by deeds – and how quickly. Meanwhile, political pressure is likely to continue to mount during the secret talks. Military intervention is not yet off the table either. This game of poker is ultimately about one thing: who dictates the terms for Cuba’s transformation.

The EU has, in fact, sidelined itself when it comes to Cuba.

So far, the Cuban people have had little say in the matter. Although protests against power cuts, water shortages and food shortages are a daily occurrence, they are swiftly and brutally suppressed. Unlike in Venezuela, there is no organised opposition on the island with charismatic leaders, a clearly defined political programme and broad support. This currently plays into the hands of the ruling elite. But this need not remain the case in the long term, especially if the reforms take hold and more and more people become independent of the state.

Transition processes in Eastern Europe have shown that civil society actors (and, unfortunately, organised crime too) know how to capitalise on the turmoil of such periods of upheaval. However, this could lead to all sorts of outcomes: permanent instability, a mafia-style oligarchic regime, or democratic structures. For the latter to emerge, however, the process – and above all the regime in Havana – would require discreet international support; at present, this seems conceivable only through countries such as Mexico and Brazil, with the backing of the UN or the Vatican.

Neither Latin America as a whole nor the EU currently has any relevant supranational structures with appropriate leaders. Quite the contrary. The EU has, in fact, sidelined itself when it comes to Cuba. Firstly, Trump’s sanctions forced most European companies to abandon their investments in and business dealings with Cuba, without Brussels doing anything to oppose this. And a few days ago, the European Parliament – with a majority of right-wing and conservative MEPs – called for sanctions against Cuba’s President Miguel Díaz-Canel and for an end to cooperation with Cuba – in other words, entirely in line with Trump’s thinking and spirit, without so much as a hint of independent ideas to defend European interests. Another small step towards geopolitical and geo-economic irrelevance.

Sandra Weiss is a political scientist and a former diplomat. A freelance journalist, Sandra writes articles about Latin America for several German newspapers, among others Die Zeit and Die Welt.

Source: International Politics and Society, published by the Global and European Policy Unit of the Friedrich-Ebert-Stiftung, Hiroshimastrasse 28, D-10785 Berlin.

Excerpt:

Venezuelan refugees make their way to the Colombian border town of La Guajira. Credit: PAHO/Karen González Abril

By Sandra Weiss
MEXICO CITY, Sep 17 2021 (IPS)

This is the third serious attempt to inject some momentum in the negotiations between the Venezuelan government and opposition. Negotiations have been taking place in Mexico since last Friday, with Norway acting as mediator.

The failure of the previous attempts at negotiation ended up strengthening Venezuela’s President Nicolas Maduro, who tightened the screws on each occasion. Expectations are correspondingly low this time, especially among the Venezuelan population.

They also have other concerns: Covid-19 has led to hospitals that were already in a desperate state collapsing completely and the vaccination rate of eleven per cent (fully vaccinated) is one of the lowest on the continent, along with Haiti and Nicaragua.

The supply of medicines and food is precarious and inflation, power cuts, and petrol shortages add to the already existing problems. More than six million of the 28 million inhabitants have left their country, shrinking the opposition’s base. Those left behind struggle to survive and many have withdrawn from political life in disappointment.

Economic handcuffs

According to polls, Maduro’s support stands at 21 per cent — which is roughly the number of government employees and military officers directly dependant on the regime. The majority of Venezuelans are in favour of political change. Paradoxically, the opposition proves incapable of capitalising on the societal mood.

Little is left of the euphoria when Juan Guaidó proclaimed himself as president in January 2019, making life difficult for ‘the usurper Maduro’ with mass protests, a military mini-rebellion, and broad international recognition.

Back then, 80 per cent supported him; today, according to a poll by the Meganalisis Institute, only four per cent of the population still back him.This means that he is no longer a direct threat in Maduro’s eyes. Now the head of state wants to free himself from the straitjacket that Guaidó and the opposition have put together thanks to their international backing.

During the last general election in 2020, only 15 to 30 per cent went to the polls.

Venezuela is struggling economically. What still functions, apart from the (ailing) oil sector, is a flourishing underground economy consisting of racketeering, gold, arms, human and drug smuggling.

Criminal groups from all over the world are involved and control large parts of the country, protected by a network of corrupt military and parastate militias. The productive apparatus lies in ruins and cannot be kickstarted again without foreign investment.

But even Maduro’s allies like Russia and China are now keeping their wallets closed, despite their geostrategic interest. The Western embargo, which shrunk the country’s gross domestic product by 80 per cent, has made doing business with Venezuela more difficult and more expensive. And the rampant corruption makes investments seem like a financial bottomless pit.

All this has recently eroded Maduro’s legitimacy. During the last general election in 2020, only 15 to 30 per cent went to the polls. ‘This is a sign of weakness and makes Maduro more dependent on alliances with the military and other not necessarily trustworthy partners’, says political scientist Colette Capriles.

A change of tides

Maduro’s options are therefore limited: Either a flight forward, into ever more authoritarian measures, similar to the development in socialist brother countries such as Nicaragua and Cuba. Or a, at least partial, democratic opening and concessions to ease sanctions, stabilise the economy, and gain legitimacy.

Maduro has opted for the latter. In the face of internal resistance, he recently even made half-hearted concessions to the opposition. And two critics of the government now sit on the five-member electoral council. Opposition leader Freddy Guevara was released, and the opposition alliance MUD, which had handed the ruling party PSUV a bitter defeat in the 2016 parliamentary elections, was also admitted to the regional elections in autumn.

While two similarly strong opponents faced off in the last negotiations in 2019, this time, the opposition is in a weaker position. The 38-year-old Guaidó has lost support within the opposition alliance because of his own mistakes, but also thanks to a clever politics of division, propaganda, and targeted repression by the regime.

Moderate opposition leaders such as Henrique Capriles criticised Guaidó’s unfortunate entanglements in military adventures such as the failed mercenary invasion in May 2020. Guaidó also made unrealistic demands, such as Maduro’s resignation, a condition for negotiations. Capriles’ demand for a gradual strategy recently gained support in the business association as well as in the Foro Civico, the most important civil society movement.

Despite its perceived weakness, the opposition also holds some trumps. One is the support of the US and Europe for a return to a democratic rule. Recovering from Trump’s ultimately empty military threats, the transatlantic bridge seems to have been repaired.

The US has leverage in the form of sanctions. Without the consent of US diplomacy, Maduro will therefore not achieve his goal.

The second trump is timing. The elections in autumn, in which the opposition now wants to take part as one body, offer an unrivalled opportunity to gain power. The cadres of the ruling socialist party PSUV are unpopular. If the opposition succeeds in finding common candidates rooted in the people and in defeating voter apathy, this would be an important step in building a solid base.

Admittedly, Maduro controls the campaign machinery, the electoral council, and the entire logistics of the ballot. But if he wants to achieve an easing of sanctions, he will not be able to play these cards openly.

Enhanced experience

The mediators have also learned lessons from the failure of the previous negotiations, keeping the negotiations secret; none of the parties are allowed to leak content to the press. Both sides have agreed to also accept parts of the agreement, provided they have been sufficiently discussed and their implementation is urgent — even if the rest of the agenda is still open.

This opens the possibility of humanitarian aid deliveries, a release of all political prisoners or a gradual re-institutionalisation of the country and important key bodies such as the electoral council.

The Cubans have enormous influence on Maduro and will therefore sit indirectly at the negotiating table.

The talks are being led by the experienced Danish diplomat Dag Nylander, who has already brought the complicated peace talks between the Colombian government and the FARC guerrillas to a happy conclusion.

This experience inspired new ideas for negotiation points, such as the right of victims to compensation and the inclusion of civil society to place an agreement on a broader foundation of legitimacy.

Russia and the Netherlands are acting as observers. Phil Gunson of the International Crisis Group sees the fact that Russia could be brought on board as positive: ‘Up until now, Russia has tried to prevent strategic advantages for the US and its allies. But an agreement that preserves Russia’s economic interests in Venezuela would also benefit Moscow’.

The negotiations will neither be easy nor move along at speed. It is also not certain that the opposition can maintain its unity nor is it certain that Maduro will be strong enough to push through substantial concessions vis-à-vishis allies, especially in regards to those who are entangled in organised crime and have little interest in a solution.

Another player in the shadows is Cuba. The Caribbean Island is in the midst of its worst economic and legitimacy crisis since the collapse of the Soviet Union in the late 1990s. The deals with Venezuela are one of the last life boats. The Cubans have enormous influence on Maduro and will therefore sit indirectly at the negotiating table.

Nevertheless, there is justified hope. If the last negotiations in 2019 were about ‘all or nothing’, this time politics has returned to the negotiating table as the art of compromise and moderation. The possibility of a transitional government in which both camps share power is at least on the horizon, albeit still a very distant one.

Sandra Weiss is a political scientist and a former diplomat. Until 1999 she worked as editor for the news agency AFP. A freelance journalist, Sandra wrote articles about Latin America for several German newspapers, among others Die Zeit and Die Welt.

Source: International Politics and Society

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