Cuba has proposed its biggest economic reforms since the 1959 revolution, marking a major shift in the country's long-standing socialist system. Prime Minister Manuel Marrero presented the package of reforms to lawmakers on Thursday. The measures have the backing of the Communist Party and former leader Raúl Castro. If approved and implemented, they could transform large parts of Cuba’s state-controlled economy and move the country closer to a market-based system.

The proposed reforms would allow private real estate development, open the banking sector to private institutions, and change the structure of state-owned enterprises. Many state-run businesses could be converted into private commercial companies with shares and equity ownership. The government also plans to permit the sale of state-owned properties to both Cuban and foreign individuals and companies, including Cubans living abroad. This would represent a significant change in a country where the state has traditionally controlled most land and major industries.

While presenting the measures, Marrero acknowledged the role of market forces in economic development. He told lawmakers that the reforms recognise the market as “an instrument for the efficient allocation of resources,” a rare statement from a senior Communist Party leader in Cuba.

At the same time, he stressed that the reforms are not intended to abandon socialism. Defending the proposed changes, Marrero said, “These transformations do not constitute a deviation from our socialist project; on the contrary, they respond ... to its development.” He further added, “The updating of the economic and social model has the essential purpose of improving the quality of life of our compatriots.”

The reform package includes more than 175 measures. Marrero spent nearly two hours presenting them before the National Assembly. The proposals must now be approved by lawmakers before they can take effect. Discussions and debates began in the assembly immediately after the presentation.

Despite the announcement, several details remain unclear. The government has not yet explained how quickly the reforms will be introduced or the exact mechanisms through which they will be implemented. As a result, many questions remain unanswered while lawmakers continue to examine the proposals.

Pressure from the United States has played a major role in pushing these reforms forward. Similar ideas have been discussed within Cuba and internationally for years. However, worsening economic conditions and increasing external pressure have made change more urgent.

Cuba’s economy has faced challenges for decades. The state-run system has often been criticised as bureaucratic and inefficient. The country struggled after the collapse of the Soviet Union, which had provided significant economic support to Cuba for many years.

The situation has become even more difficult under severe sanctions imposed by the Trump administration. These measures included a months-long oil blockade that further weakened Cuba’s economy. The sanctions have contributed to the departure of foreign businesses from the island and caused major damage to the tourism sector, one of Cuba’s most important sources of income.

The U.S. State Department did not immediately respond to requests for comment regarding the proposed reforms.

Former Cuban leader Raúl Castro has strongly supported the measures. In May, he was indicted in the United States on murder charges. Nevertheless, he has publicly endorsed the reforms, even though many of them would reverse policies introduced after the 1959 revolution led by Fidel Castro and himself.

In a letter first presented to the Communist Party’s politburo on Wednesday and later shared with lawmakers on Thursday, Raúl Castro described the measures as “beneficial” and called for their rapid implementation.

If approved, the reforms would significantly reduce the role of the state in business activities and encourage greater private-sector participation. Private businesses in Cuba would be allowed to employ more than 100 workers for the first time. Entrepreneurs would also be permitted to own multiple private businesses, another major departure from existing rules.

Marrero said the movement of private capital would be supported through a more flexible private banking system operating under state supervision. The reforms also propose creating a real-time digital foreign exchange market managed by authorised agents.

For decades, Cuba has provided heavily subsidised public services such as healthcare, education, and transportation. Many of these services have deteriorated in recent years due to economic difficulties and government inefficiency.

To address these challenges, the reform package includes a new taxation system. Under the proposal, both public and private businesses, whether domestic or foreign, would contribute to funding public services. The government hopes this approach will help maintain essential services while easing pressure on state finances.

The proposed reforms represent a turning point for Cuba’s economy. If lawmakers approve the measures and the government successfully implements them, the country could witness the most significant transformation of its economic model in more than six decades.