One Step Forward, One Step Back For Cuba's Market Reforms

When Cuban President Raúl Castro first announced in 2008 that his government would begin to “update” the country’s economic model, most observers were understandably skeptical of both his intentions and his ability to implement much-needed reforms. Yet, five years later the trend is clear: Cuba is shifting away from a centrally planned command economy toward a 21st century mixed market economic system.

Even the most jaded skeptics and the Castro regime’s harshest critics can no longer deny the changes sweeping the island. Since 2010, more than 430,000 Cubans have received licenses to operate private businesses as everything from hair stylists and auto mechanics to birthday party clowns; untold thousands more have left jobs at inefficient and low-paying state-owned companies to seek employment in Cuba’s burgeoning private-sector enterprises; farmers are forming autonomous agricultural cooperatives and new private transportation companies are arising to move their produce to faraway wholesale markets where supply and demand dictate prices. According to a recent report by the Brookings Institution, more than one million people—a full 20 percent of Cuba’s total national labor force—are now working in the private sector.

Feet In, Out