Last Sunday, 87% of Cuban voters (over 6.8 million people) approved the new Constitution via referendum. It will replace the 1976 Constitution which had earned 98% of the vote share under Fidel Castro. This constitution brings a legal frame to the modest pro-market reforms carried out since 2011. It should not be a game-changer as it reaffirms the one-party state and states that “socialist planning is the central element of the management system of economic and social development”. Yet it formalizes Cuba’s will to attract foreign investment: “the State promotes and provides guarantees for foreign investment as an important element for economic development”. It recognizes the role of the market and the existence of private and cooperative businesses. This enshrines the legal status of around 30% of Cubans who are either self-employed (approx. 600,000) or work in private or cooperative businesses (approx. 800,000). It also reforms institutions, creating a Prime Minister position and introducing five-year presidential terms.
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Weekly Export Risk Outlook 27 February 2019