Economic reforms will be cautious. Enterprise restructuring and gradual price liberalisation will allow a wider slice of domestic industry to be reactivated by becoming more responsive to market signals. However, rationalisation of state enterprises will be inhibited both by ideological resistance and the government's commitment to contain unemployment. The opening to foreign investment will remain tightly constricted. The difficulties encountered in securing foreign finance have made economic recovery slow and difficult, but they have also, forced Cuba to lay solid foundations for future growth by imposing strict financial discipline.
New borrowing is kept to a minimum and macroeconomic stability is strictly maintained.
The imbalances in the domestic price structure and huge gap between the official and unofficial exchange rates will probably be addressed not by any sharp adjustment but by piecemeal price reforms. There will be a gradual appreciation of the unofficial exchange rate, as the authorities control emission of domestic currency in order to ensure that the supply of pesos to households does not outstrip demand for personal transaction purposes. The Economist Intelligence Unit Limited 2001. All rights reserved.