A pile of garbage burns in Havana, Cuba, on Wednesday, June 17, 2026. (AP Photo/Jorge Luis Banos)

By Eloy Viera Cañive (El Toque)

HAVANA TIMES — At first glance, the “reforms” announced by the administration of Miguel Díaz-Canel appear profound. They could even be interpreted as a substantial change to Cuba’s economic model. However, when evaluating their real scope and their chances of success, two fundamental problems emerge.

The first is political and legal in nature.

Late-stage Castroism appears willing, at least on paper, to transform important aspects of its economic model. But it shows no intention whatsoever of modifying the institutional structures or legal guarantees that are indispensable for those changes to function in a stable, transparent, and predictable manner.

A decree can be issued stating that state-owned enterprises will become a joint-stock corporations. That is relatively simple. What is difficult is building the institutional environment that allows such a transformation to generate confidence, investment, and prosperity.

There is something deeply paradoxical about this situation.

I still remember being taught in law school that Commercial Law belonged to capitalist economies, while Economic Law corresponded to the specific legal relationships of socialism. For years, the teaching of Commercial Law was minimized or even eliminated from Cuban curricula because it was considered a discipline associated with an economic system that was supposedly obsolete.

History, however, has an extraordinary sense of humor.

Because, as Ludwig von Mises warned, socialism often ends up being the longest route back to capitalism.

Now, for the first time, some Cubans could become actual owners of corporate shares linked to the state. This would mean moving beyond the old slogan that “the entire people” owned the fundamental means of production, even though they were never able to exercise any effective control over them.

The important question is not whether shares will exist. The important question is who will receive them. And that is where the main obstacle appears.

The Cuban institutional system lacks independent mechanisms capable of guaranteeing transparent, competitive processes governed by the rule of law to determine who will benefit from this potential redistribution of wealth.

In the absence of independent courts, a free press, autonomous oversight bodies, and competitive political processes, it is inevitable to ask whether we are witnessing a genuine democratization of property ownership or merely a new Caribbean version of the so-called Sandinista “piñata.” If one prefers a more distant reference, the rapid privatization processes that took place in Boris Yeltsin’s Russia also come to mind.

The second problem has a geopolitical dimension.

No matter how ambitious the reforms may seem, they do not arise in a vacuum. It is taking place amid negotiations with the United States and under extraordinary economic and political pressure exerted by the Trump administration. For that reason, the effectiveness of any reform will depend to a large extent on Washington’s response.

There is no realistic way for a transformation of this kind to produce significant results if the international context that severely limits Cuba’s access to capital, financing, markets, and technology remains unchanged.

Corporations can be created by decree. The capital that makes them function cannot.

And here a difficult reality emerges: if the US administration decides to maintain its current restrictions and warnings regarding Cuba, very few rational investors will be willing to risk their access to the world’s largest market and most important financial system in order to buy shares in Cuban companies, no matter how attractive they may appear on paper.

Put more simply: if Washington does not send some signal of openness, it is hard to imagine a flood of investors interested in acquiring even minority stakes.

In short, too many questions remain unanswered. Legal, political, and institutional questions that, in the Cuban case, ultimately become one and the same. They only reinforce a conviction I have held for years: there is no possible solution through Castroism, even if it changes its form.

Because the problem is not merely a failed economic model; it is a system of power incapable of transforming itself to the point of putting its own existence at risk. For that reason, every announcement of reform ultimately collides with the same limits, the same resistance, and the same fears.

At this stage, the only thing that could rescue Cubans from the misery in which they live is not another promise of change managed from above, but a real break with the structures that have produced and perpetuated this tragedy. For something to happen, to borrow the words of that poet who believed in the hearts of Fidel and Che, that would “wipe them away all at once.”

First published in Spanish by El Toque and translated and posted in English by Havana Times.

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