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Explainer: The state of Raul Castro's economic reforms in Cuba

From Reuters - April 17, 2018

HAVANA (Reuters) - President Raul Castros efforts to modernize Cubas Soviet-style centrally planned economy have borne mixed results, with some initiatives moving forward, others stalled and still others either scuttled or yet to begin.

The effort can best be viewed as building on policy changes Cuba initiated after the fall of the Soviet Union, for example allowing foreign investment and some mom-and-pop businesses.

Late former President Fidel Castro termed these changes concessions to the enemy while Raul Castro has cast them in a more positive light and said they are an indispensable part of Cubas future.

The ruling Communist Party says the process has been harder than expected and most of the reforms, which were first adopted at a Party congress in 2011 and then ratified in 2016, are still a work in progress.

Some of the changes that are under way, for example the development of a private sector, have been subject to constant tinkering and increasing complaints about both growing social inequality and tighter regulation.

While the 2011 reform plan prohibited the accumulation of private property, the 2016 version added a ban on accumulation of wealth.

Following are highlights of the most important economic changes to date:

AGRICULTURE

The government began leasing fallow state-owned land to prospective farmers in 2008. Since then the length, size and terms of leases have improved, although farmers must agree to cultivate certain crops or raise livestock for sale to the state.

Currently 151,000 people hold leases covering 1.2 million hectares (3 million acres) of land, similar to five years ago.

A sweeping agriculture reform began in 2010 and included loosening regulations on farmers to favor market forces and prices. The market reforms were reversed and the state dominated system restored in 2015 on the grounds that speculation was inflating prices.

SMALL BUSINESS

Regulations around small businesses were liberalized in 2010 as part of an effort to cut bloated state payrolls. Entrepreneurs were still categorized as self-employed rather than as business owners, however they were authorized for the first time since 1968 to hire non-family labor.

STATE COMPANIES

PRIVATE PROPERTY

TAXES

FOREIGN INVESTMENT

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