After Raul: What Next for Cuba’s Political Economy?

Irene Estefanía González / Inter-American Dialogue

On February 22, the Inter-American Dialogue in partnership with the Brookings Institution’s Latin American Initiative hosted an event titled “After Raul: What Next for Cuba’s Political Economy?” to discuss the political and economic challenges Cuba will face amidst a presidential transition. This event was moderated by Michael Shifter with panelists Richard Feinberg from the Brookings Institution and William LeoGrande from American University.

Feinberg drew from his report, “Cuba’s economy after Raúl Castro: A tale of three worlds” (February 2018) to present the challenges facing the Cuban economy and propose comprehensive reforms which the next administration should pursue. He pointed out areas which have contributed to the country’s economic stagnation such as a weak agricultural sector, low energy production, and a “brain drain.” On the other hand, Feinberg argued that Cuba has diversified its international commerce, doubled its tourism sector, and achieved growth in the private sector. He suggested a couple of broad policy goals going forward: collaboration between state-owned enterprises and international firms to attract foreign direct investments and improve performance, greater bureaucratic efficiency and response, and monetary reform.

LeoGrande discussed the political environment within the Communist Party and what the presidential transition would look like. A major challenge for Castro’s successor, Miguel Díaz-Canel, will be to establish his legitimacy as president. The Castro brothers had the revolutionary ideology to establish theirs but Díaz-Canel is unable draw from that. Without legitimacy, LeoGrande argued, it would be difficult for him to push for necessary economic reforms. Furthermore, there are divisions within and outside the Communist Party between the older and younger generations. LeoGrande offered the possibility that Díaz-Canel could build a broad coalition within the party and with the Cuban society and private sector. This challenge, along with the uncertainty of state capacity, harbors a situation where the existing leadership lacks urgency in moving forward with ambitious reforms.

As for the future of regional relations, the debate over Venezuela has become a sticking point, especially since President Maduro was disinvited by the Peruvian government from attending the Summit of the Americas. The Cuban government denounced the move but does not intend to boycott the event. It is unclear what posture Díaz-Canel will take with the United States and region as a whole.

The panelists concluded that the challenges for the Communist Party and Castro’s successor will persist if it does not respond to the public’s dissatisfaction with an economy and political system that has become unresponsive and ineffective.