Prime Minister Updates Cuban Parliament on the Implementation of Economic and Social Transformations 

(Shorthand versions - Presidency of the Republic)

Dear Army General Raúl Castro Ruz, leader of the Cuban Revolution;
Comrade Miguel Díaz-Canel Bermúdez, First Secretary of the Central Committee of the Communist Party of Cuba and President of the Republic;
Comrade Esteban Lazo Hernández, President of the National Assembly of People's Power and of the Council of State;
Commander of the Rebel Army, José Ramón Machado Ventura;
Members of Parliament and guests;
Fellow Cubans:
During the first half of this year, the country has been under the impact of intensified aggression from the United States government, beginning with the implementation of Executive Orders, particularly Order 14404, issued on May 1st. This order establishes a system of secondary sanctions targeting not only Cuba, but also any foreign person or entity doing business with our country, and has had multidimensional negative impacts on the daily lives of all Cubans.
It is argued, with false pretenses, that Cuba is an "unusual and extraordinary" threat to the national security of the United States, despite our country having provided all the evidence that refutes this accusation.
This policy has resulted in severe limitations on the country's economic and social life, with the main impacts being felt in sectors such as energy, agriculture, tourism, finance, and public health, among others.
Foreign trade is another highly impacted sector, exacerbated by the paralysis of operations of the main shipping companies that provided cargo transport services to Cuba. Thousands of containers with food, medicine, solar systems, and other essential goods are being held up in nearby ports, as Deputy Prime Minister Oscar explained very well this morning.
Amid this complex situation, we find ourselves immersed in the implementation of the Economic and Social Transformations, recognized nationally and internationally as the most profound process undertaken in the modernization of the Cuban Economic and Social Model, which contributes to the 2026 Government Program.
Comrades:
Since the approval of the Transformations in the Extraordinary Session of the National Assembly on June 18th, a process of updating them has been underway, taking into account:
The guidance of Army General Raúl Castro Ruz, who participated from the outset, and who conveyed to us in his message that the proper and timely implementation of the Transformations, with well-defined priorities and the conscious participation of the people, is just as important as their approval.
The agreements of the Plenum of the Central Committee of the Party and the conclusions of the First Secretary.
The recommendations received from the economists and experts of the National Association of Economists and the 171 proposals and assessments from the deputies, of which 165 were incorporated into the implementation phase of these Transformations.
All of the above enriched the Transformations through modifications and expansion of their scope.
This process concluded on June 25 with the publication of the updated version of the Transformations, as a first step toward facilitating direct public participation.
To begin the next phase of work, the Council of Ministers approved the organizational guidelines for implementing the Transformations. These guidelines, in their initial phase, focused on designing the policies and legal framework that support them, as well as establishing a timeline with dates and assigned responsibilities.
To prioritize this process, key government officials were appointed to lead the thematic areas, and working groups and subgroups were formed, comprised of experts and academics.
Given that training is crucial for ensuring the practical implementation of the Transformations, seminars were held for Party and Government structures at the national, provincial, and municipal levels. These seminars aimed to equip leaders with the necessary tools for effective implementation.
In conjunction with the leadership of the National Assembly, the Legislative Timetable for implementing the Transformations was developed, identifying, to date, 138 legal norms. The deadlines for drafting, analyzing, and approving the regulatory documents were shortened.
The timetable establishes the implementation of 121 Transformations in June and July. So far, 110 have been presented and approved, representing 90.9% of those planned for this stage, and another 5 have been partially approved. The remaining 121 will be evaluated before the end of the week, and specifically tomorrow, after the National Assembly session concludes, the Executive Committee of the Council of Ministers will meet to present 11 proposed Transformations.
The timetable anticipates completing the design and approval stage for the remaining Transformations, which are the most complex, in August and September, except for three that are planned for November.
Next, I will share with you the implementation of the main Transformations approved with a higher level of update to the document that has been circulated:
In Thematic Axis 1 on the management model of economic actors, 28 of 31 transformations have been approved, among them:
The Decree Law "Of the Cuban State Business System" that regulates the general principles of organization and operation of the state business system, for its transformation and development, under the leadership of the National Institute of State Business Assets. With this action, that is, the Decree Law "On the Cuban State Business System", 16 transformations are responded to, of the 17 planned for the socialist state company.
The powers that grant greater autonomy to the state company are expanded, including approving the salary organization; carry out any lawful activity; define prices and rates; make financial investments; determine the workers who terminate the employment relationship; and the destination of profits is made more flexible.
Companies are integrated into business groups based on the principles of unity of purpose and direction, generating synergies to achieve better productive, financial, and technological results.
The social responsibility of the various stakeholders and the participation of workers in the company's planning, regulatory, and management processes are defined, as well as control, transparency, information, and auditing.
In parallel, the policy and decree "On the Organization of the Salary System in the Cuban State Business System" were updated, eliminating limits and restrictions related to:
Prior authorizations for implementing a company's own salary structure.
The indicators defined for planning and executing the salary fund, which, from now on, are conditioned only by the economic and financial capacity of the business entity.
The entity is empowered to approve the organization of the salary system, subject to prior agreement with the Union, as stipulated in the collective bargaining agreement. This constitutes the most significant transformation in the area of ​​work organization and wages in recent times.
Companies operating at a loss cannot apply the powers established in the salary organization while they remain in this condition.
Regarding non-state management forms, the non-agricultural micro, small, and medium-sized enterprises (MSMEs) and cooperatives that were pending on the Platform and met the established requirements were approved. Recall that I reported at the last Assembly that there were slightly more than three thousand. With this, the current figure rises to more than fifteen thousand.
The proposed Decree Law regulating the creation, operation, and dissolution of micro, small, and medium-sized enterprises, private companies, non-agricultural cooperatives, as well as self-employment, was approved, thus addressing seven transformations.
The objectives are:
To facilitate the coherent integration of non-state economic actors into the legal framework, enabling their participation in the country's productive, commercial, and service transformation.
To define the procedures for the creation and dissolution of non-state economic actors, including a significant reduction in the requirements, formalities, and timeframes for their approval.
To define the classification criteria and operational aspects for these economic actors.
On Tuesday, July 28th, Decree 160 was published, amending Decree 107 and relaxing restrictions on activities not authorized for non-state management entities and self-employed workers.
Forty-six prohibited activities are completely eliminated, and another 36 are partially eliminated. The goal is to increase flexibility and achieve greater integration of the non-state sector into the country's economic and social development.
The Platform of Non-State Economic Actors is being updated, in its first phase, to support the Transformations. This will allow for greater efficiency and better use of the information it provides.
The approved Transformations for state and non-state economic actors will help unleash productive forces and thereby increase the supply of goods and services to the population.
In Thematic Axis 2, related to property relations—a rather complex area—proposals guaranteeing the protection of labor and social rights were approved as part of the draft Labor Code.
In Thematic Axis 3, concerning the economic planning system, the concept of planning was modified, resulting in a more flexible scheme for accessing resources, giving greater weight to market signals; a system based on incentives; strengthened business autonomy; and a transition toward strategic and financial planning.
The centrally prepared balance sheets are reduced, becoming instruments for diagnosing, anticipating, and correcting policies.
The Methodological Guidelines for Economic Planning in 2027 and the Government Directives were approved, which include the new concept of closed schemes in foreign currency for contributions.
It envisions a decentralization of the power to approve investments to state-owned enterprises, commercial companies, and foreign investment, based on their financial capacity and access to resources; as well as to municipalities in accordance with their development strategies. Only investments exceeding 1 billion pesos will require central approval. These actions contribute to five transformations.
Thematic Axis 4 focused on finalizing the draft bill regulating the organization of the Central State Administration, which will be analyzed in this Assembly.
This bill has been extensively debated, enriching it. The restructuring of the Central State Administration is a first step toward updating its functions, separating state and business functions, reducing structures, and achieving a more efficient government organization and management.
More than 1,200,000 workers are employed in the state-funded sector, representing 51% of the state sector workforce.
With the aim of restructuring the provincial and municipal administrations, the proposals from the Ministries of Public Health, Education, Culture, and Sports were approved, resulting in a reduction of more than 92,000 positions, primarily in unfilled administrative posts. This process is scheduled to be completed in the remaining ministries next September.
Under Thematic Axis 5, the update to Decree 140 was approved, expanding the scope of territorial decentralization of powers.
The management of the territorial contribution for local development was improved, and 111 municipalities were allocated the surplus of their assigned revenues for 2025, to be used in their municipal strategies.
The policy and legal framework implementing the improvement of community services were updated to ensure their sustainability, with a management model that guarantees the participation of all economic actors and the population, organized according to the characteristics of each community, district, municipality, and province. The Ministry of Industries was designated as the methodological leader of this activity, and the functions of the other agencies were also defined.
The amendment to the Decree on strategic management for territorial development was approved. Among the main changes is the definition of deadlines for the execution of projects and that to carry out unauthorized activities, they must have a state entity among their owners.
Related to Thematic Axis 6, on transformations in the energy sector, the complex situation persists, marked by prolonged blackouts that impact vital services for the population, water supply, food production and preservation, and the paralysis of the economy, among other things.
In this context, the transformations are aimed at finding alternative solutions to alleviate these undesirable impacts and continue advancing the shift in the energy matrix.
To this end, 1,464 megawatts of renewable energy capacity have been installed, which already account for 13.8% of electricity generation.
As part of this process, 4,292 photovoltaic systems have been installed through state projects during this phase. Of these, 2,784 are in vital centers and 1,508 in isolated homes, in addition to more than 11,000 systems installed in the homes of children with chronic illnesses, labor heroes, doctors, teachers, scientists, sports legends, and others. The energy mapping project has identified approximately 125,700 households with installed systems. This information is updated daily.
Requirements were relaxed to allow micro, small, and medium-sized enterprises (MSMEs) and foreign companies to carry out the import and wholesale and retail sale of fuels.
For fuel sales, it was established that pricing methods must comply with approved standards and be transparent and publicly available. This means that prices must be clearly displayed wherever there is a non-state economic actor, as if it were a state-owned enterprise.
Given the need to expand tax incentives associated with renewable energy sources and investments in the social sector, the following was approved for individuals and legal entities: Tax credits on profits and personal income for those who, as part of their social responsibility, invest in renewable energy sources in public service centers, social or care facilities, multi-family buildings, and public lighting.
Additionally, investments in homes where people require continuous electricity due to health issues reside, as well as energy security for water supply, were included. The total amount of the investment is deducted from the tax payable.
Exempt from sales tax the income derived from the wholesale or retail sale of technologies and systems related to the use of renewable energy sources.
Under Thematic Axis 7, aimed at incentivizing agricultural recovery, four of the five planned transformations have been approved. These transformations required the modification and approval of several legal regulations, including the Agricultural and Forestry Land Bill, which we will evaluate at this National Assembly.
This will make land management and use more flexible for all economic actors involved in forestry, agricultural, and tobacco production, as well as the marketing of agricultural products. The management model for cooperatives has been updated, and new incentives have been approved, which will contribute to increased agricultural production.
Thematic Axis 8, concerning social transformations, is cross-cutting and constitutes an essential element to consider in the implementation process of the other transformations.
In all cases, it is essential to evaluate the impacts of the decisions made on individuals, families, and communities to guarantee social protection for those who need it most.
To that end, the characterization of prioritized profiles in provinces and municipalities has been completed, identifying 876,522 people in situations of greater vulnerability.
The Ministry of Labor and Social Security, in conjunction with the Digital Government Center, has created the conditions for the online process for requesting social protection through the Soberanía platform to be operational this week.
This is a free digital alternative for citizens who consider themselves to be in situations of greater vulnerability to request assistance from Social Services. Furthermore, anyone can submit a request on behalf of another citizen who they believe requires assistance.
This online process does not replace the work carried out by government structures at the municipal level and within the People's Council districts, but rather complements it as part of the comprehensive social policy system.
The implementation of the transformations associated with the social responsibility of economic actors will contribute to improving services at the community level and to providing assistance to the most vulnerable people, as regulated in the decree-laws for both the state-owned enterprise system and non-state economic actors.
Tax benefits were approved to increase employment and income for people with disabilities working in specialized workshops.
Regarding Thematic Axis 10, which addresses labor and salary transformations, as I reported in the last session of this National Assembly, the salary increase in the budgeted sector will be applied starting this month, payable in August, with an estimated annual cost of 42.5 billion pesos.
This increase establishes a minimum wage of 3,210 pesos, which applies to budgeted entities, but also to workers in all state and non-state economic sectors whose income is lower than the approved amount.
This decision, while insufficient, is necessary for a sector that guarantees most basic social services.
With the approval of the Labor Code, scheduled for analysis in this session of the National Assembly, eight of these transformations will be implemented.
In Thematic Axis 11, concerning the modernization of the banking and financial system, given the need to modify the operation of foreign currency accounts, the update of the regulations governing them was approved, specifically:
All administrative procedures for opening foreign currency accounts by banks are eliminated.
Non-state actors are permitted to deposit cash into foreign currency accounts, with a declaration of origin and destination, as well as to withdraw funds in the same currencies.
Payments abroad from foreign currency accounts are authorized for imports, financing, and other lawful purposes.
Regulations for the authorization and control of accounts in foreign banks for economic actors, as well as for different forms of foreign investment, have been updated, eliminating the requirement for prior administrative authorization from the Central Bank of Cuba.
With the aim of increasing digital payments, the Central Bank of Cuba recently announced new measures:
Elimination of the limit on cash payments between economic actors.
Real-time crediting of online payment transactions.
The commission currently charged for cash deposits has been eliminated, and a 0.2% commission has been established for withdrawals by legal entities.
The monthly transaction limit has been increased from 120,000 to 2,500,000 pesos.
There is one issue that, with these transformations, requires us to continue increasing measures and requirements to resolve it once and for all, and that is what was discussed this morning regarding the problems associated with cash, which primarily affect the most vulnerable people. We must increase the demands, especially on those entities that refuse to accept payments by transfer; those that, when they do accept a transfer, charge a commission; or those that even demand high-denomination bills. There must be greater scrutiny, more confrontation, and measures commensurate with the seriousness of this matter.
Related to the exchange rate reforms, the regulatory framework for the authorization, under license from the Central Bank of Cuba, of private exchange houses was approved. The first private exchange house is ready to begin operations as a pilot project.
In Thematic Axis 12, transformations to the tax system, proposals modifying the Tax Law were approved in response to 10 of the approved reforms.
Value-added tax (VAT) is established to replace sales and services taxes; the mandatory use of electronic tax invoices is regulated as a means of supporting VAT implementation.
Among other aspects, the corporate income tax rate is reduced from 35% to 30% to encourage reinvestment, innovation, and economic growth.
Greater participation by various actors in the supply of goods and services to the population must necessarily be accompanied by disciplined compliance with obligations, transparency in operations, and a strengthened tax administration.
An accelerated depreciation regime was approved for economic actors involved in the acquisition of machinery, production technologies, and industrial food processing equipment.
In Thematic Axis 13, on pricing policy, the power to approve wholesale and retail prices is decentralized to all economic actors; and certain elements are regulated to be considered in the formation of prices and rates of essential public products and services, transversal to the economy and the population.
Economic actors choose the procedure to establish prices, taking into account correlation methods and training within value chains; They have the obligation to inform the prices set to the public.
We know that this is an unresolved issue. Decentralization will be accompanied by the strengthening of inspection and control.
The transformations as a whole are aimed at increasing supply, which is the most effective way to influence the decrease in prices. That is why in this stage the transformations have focused on unleashing the productive forces, eliminating obstacles and restrictions to encourage the incorporation of all actors into the production and service processes.
Under Thematic Axis 14, related to foreign investment, the Guide to Procedures for foreign investors and Cuban non-state actors interested in partnering under the established modalities was approved.
Foreign investment should contribute to promoting projects of non-state actors classified as legal entities, provided they contribute to the country's development and guarantee their financial sustainability in foreign currency.
The amendment to the Civil Code regarding the granting of surface rights and usufruct rights was approved.
The proposals to amend Law 118, "On Foreign Investment," were approved in order to eliminate the requirement for specific foreign investment modalities for hiring Cuban workers and foreign workers permanently residing in Cuba through employing entities.
The requirement for Central Bank authorization to open accounts in freely convertible currency in foreign banks for joint ventures was eliminated.
The Regulations of the Foreign Investment Law were amended to reduce documentation and processing times.
The policy for foreign investment in real estate was also approved, fulfilling six key transformations.
The policies for foreign investment in trade, as well as in priority conservation areas within heritage contexts, were updated, implementing another six transformations.
In Thematic Axis 15, related to foreign trade, the updated policy for the development of Cuban medical services was approved.
The procedure for granting direct export and import authorizations to economic actors was also approved, and the nomenclature was made more flexible. All of this represents operational changes, eliminates intermediaries, and grants greater autonomy to producers.
During this period, Decree-Law 114, "On Partnerships Between State and Non-State Business Entities," also came into effect, and seven sectoral policies were approved to ensure its implementation. Several proposals in this regard are currently under evaluation.
The measures adopted to incentivize foreign investment and partnerships among stakeholders have yielded the following results:
Thirteen foreign-invested businesses are now directly employing workers.
The first joint venture between a foreign company and a private micro, small, or medium-sized enterprise (MSME) was approved.
More than one hundred entities have been authorized to wholesale fuel distribution—this number is growing daily—and is now approaching two hundred. The new decree streamlines these procedures.
The first foreign-invested business for the import, distribution, and sale of fuel was approved.
The first foreign-invested business in Old Havana was approved.
The first zone with special regulations, designated as an Economic Development Zone, was created for the establishment of a wholly foreign-owned company in the health tourism sector.
Under Thematic Axis 16, concerning the partial dollarization of the economy, the updated system for managing, controlling, and allocating foreign currency in the national economy was approved. This includes the scope of dollarization and is intended to ensure that freely convertible currencies reach the primary sector of the economy to incentivize production, foster stronger linkages, and create more fluid and dynamic trade relations among the various economic actors.
Regarding the tourism sector, as is well known, the impact of fuel shortages and imposed sanctions has led to a near-total paralysis of tourism services. 73% of hotel facilities are currently closed, leaving approximately 25,000 workers on standby. Furthermore, due to pressure exerted, seven hotel chains, which managed 46% of the country's hotel rooms, have withdrawn from the country.
In Thematic Axis 17, the transformations in this sector are primarily aimed at expanding the participation of all stakeholders, seeking greater utilization of existing capacities. To this end, 10 of the 13 planned transformations have already been approved. These include new business models involving all stakeholders; tax benefits for tourism projects related to ecotourism and other specialized tourism modalities; the procedure for authorizing all economic actors to develop car rental and tourist transportation businesses; the requirements for the operation of private travel agencies; and the procedure for the certification and approval of tour guides and private sales agents.
Additionally, a special 1% contribution was approved to finance the sustainability, promotion, and image of tourist destinations for all economic actors operating within them.
In Thematic Axis 18, concerning transportation, the three planned transformations have already been approved. These transformations stem from the updated policy for the transfer of ownership of motor vehicles, trailers, and semi-trailers, which streamlines the import and sale of vehicles and incentivizes electric mobility.
In Thematic Axis 19, on commerce, gastronomy, and services, seven of the ten planned transformations have been approved. These include the update of domestic trade policy; streamlining the process for granting business licenses; the implementation of the Neighborhood Market project, managed by various economic actors, with a defined product nomenclature and a selected network to deliver these products to neighborhoods; the approval of the creation of wholesale markets with direct access for individuals and legal entities; the approval of a draft decree-law regulating bidding processes; and the approval of a procedure to stimulate wholesale and retail public procurement.
In Thematic Axis 20, on transformations in insurance policy, proposals were approved to boost the marketing of foreign currency policies for risks related to transportation, travel and medical expenses abroad.
The proposal establishing mandatory Civil Liability Insurance for all owners of motor vehicles was approved, with the aim of covering material damages, bodily injuries, or death caused to third parties.
In Thematic Axis 21, covering the digital sphere, artificial intelligence, and the knowledge economy, it was approved that the private sector may market data center services, subject to the corresponding regulations.
Colleagues:
This concludes our presentation of the results of the work carried out in just over a month, since these Transformations were approved on June 18, for the organization and implementation of the Economic and Social Transformations.
Work has been carried out in a coordinated manner with the Legal Group, the Political-Communicational Assurance Group and the one that prepares the proposal for Transformation 176 referring to the control and inspection system.
It is important to note that data intelligence analysis has been used throughout this process, with the support of artificial intelligence tools.
This has made it possible to have the first version of the Dashboard of the 176 Transformations, to monitor in real time the application and control of the indicators, as well as informative outputs, which includes the processing of opinions on each thematic axis or transformation.
Deputies and deputies:
This has been a stage in which, with speed, quality and depth in the analysis, the actions planned in the implementation schedule of the Transformations have been executed.
The results will be achieved gradually, from now on the most important and perhaps the most difficult stage begins, since it is where we must guarantee the effective application of each of the approved Transformations, the monitoring of the indicators, the evaluation of the impacts and the correction of possible deviations that may arise.
But the most important thing is that we already have 110 Transformations approved, and it is up to us to implement them.
In these difficult times, it is only right to recognize our people for their resilience and to express our deepest gratitude for their trust, which commits us to continue with the same dedication and commitment until we achieve the expected improvements in living conditions. Achieving this goal requires the utmost effort, dedication, and participation from everyone.
Army General Raúl Castro Ruz, in his speech at the closing of the Ninth Congress of the Union of Young Communists on April 4th, 2010, stated: "We face unpleasant realities, but we do not close our eyes to them. We are convinced that we must break with dogma, and we firmly and confidently embrace the ongoing updating of our economic model, with the aim of laying the foundations for the irreversibility and development of Cuban socialism."
We reaffirm that we are not deviating from our socialist model; on the contrary, we will defend it and adopt the necessary measures for its consolidation. We are doing so without hesitation and are prepared to drive forward the profound process of economic and social transformation. We have ample reasons: Cuba's history, our leaders, our convictions, and our people.
Just days before the centennial of Commander-in-Chief Fidel Castro Ruz, his teachings continue to call upon us to "emancipate ourselves through our own efforts" and "fight with audacity, intelligence, and realism."
In his speech on December 5th, 1988, at the commemoration of the 32nd anniversary of the Granma landing and the founding of the Revolutionary Armed Forces, he declared: "Socialism is and will be the hope, the only hope, the only path for the people, for the oppressed, the exploited, the plundered; socialism is the only alternative! And today, when the enemies seek to question it, we must defend it more than ever."
Long live the Revolution! (Exclamations of: "Long live!")
Long live Fidel! (Exclamations of: "Long live!")
Long live Raúl! (Exclamations of: "Long live!")
Always onward to victory! (Exclamations of: "Always!")
Homeland or Death!
We will prevail! (Exclamations of: "We will prevail!")
(Applause.)