What next for co-ops in Cuba with Miguel Díaz-Canel as president?

The new president has indicated he will continue his predecessor's reforms

Cuban leader Raúl Castro stepped down on 19 April to be succeeded as the country’s president by Miguel Díaz-Canel. What will this mean for the country’s co-operative sector?

While Mr Castro has stepped down as president, he will remain first secretary of the Communist Party until 2021, when Mr Díaz-Canel takes over that role.

Elected by the National Assembly, Díaz-Canel is a trained electrical engineer. A close ally of the Castro family, he served as bodyguard to Raúl Castro. and has has been involved in politics since 1987. A former minister of higher education, he has supported access to internet (albeit censored) and LGBT rights.

In his inauguration speech, Mr Díaz-Canel confirmed Mr Castro would continue to lead the country. He defines himself as a Raúlista economic reformer, which implies he will continue Mr Castro’s efforts to shrink the public sector and boost small private enterprises in a cautious manner.

Under Raúl Castro’s rule, nearly 600,000 small-service business people were licensed. Following reforms last year, co-ops in non-agricultural sectors can only operate in the province where they formed, and the distribution of income within them is regulated to avoid inequality.

Related: Reforms offer boost for Cuba’s co-ops

Furthermore, the pay gap between the owner and lowest paid employee cannot be greater than three times. Cuban people can also be a member of only one co-operative, or own only one private business. Since August, licences for self-employed businesses have been frozen to address alleged illegalities within the sector.

In another attempt to boost self-employed businesses, the government opened a wholesale market in March for non-agricultural co-ops in Havana. The market enables co-ops in the restaurant industry to buy directly from wholesales at prices that are 20% lower. This is the first wholesale market available for co-ops, but the authorities plan to open more. The government also intends to introduce similar access to lower petrol prices for co-ops in the transport industry.

In a speech after stepping down, Raúl Castro confirmed the reform of the economy would continue under Miguel Díaz-Canel, focused on developing the self-employed sector and continuing the experiment with non agricultural co-operatives.

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