Cuba's Leadership Transition

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By Diego Moya-Ocampos

President Raúl Castro's decision on 19 April to step down as president of the Council of State and Council of Ministers and hand over to First Vice-President Miguel Díaz-Canel marks a clear transition in leadership to a younger generation within the Cuban Communist Party (Partido Comunista de Cuba: PCC). Castro has been formally in power since 2008, succeeding his older brother Fidel, who had held power since 1959, and Díaz-Canel signals continuity and gradual economic reform but not democratic opening.

The ruling PCC is likely to remain stable and with President Raúl Castro steering the transition process to Díaz-Canel: Díaz-Canel is an electrical engineer by profession who rose within the PCC ranks, after serving in the armed forces (1983–85). Díaz-Canel is perceived as progressive but loyal to the PCC's old guard Castro leadership and to the security apparatus. The PCC is likely to pursue policy continuity in the one-year outlook with Castro remaining as the first secretary of the party after stepping down, steering the transition and influencing policy. Although Cuba will remain a one-party system – with democratic political reform highly unlikely to occur – gradual economic reform will continue, albeit slowly. Change will be conducted in a manner that does not threaten the PCC's and the security apparatus' control or lead to democratic political reform that would pluralise the political system.

Díaz-Canel likely to continue Raúl Castro's economic policies and gradually open up the economy to foreign direct investment (FDI): Díaz-Canel is likely to continue with reforms implemented by Raúl Castro to gradually open the economy to the private sector, increase the efficiency of state-owned companies, and attract FDI, but at a pace that does not trigger popular expectations of democratic political reform that would pluralise the political system. The tourism and food sectors are the most likely to benefit from post-Castro economic reforms and gradual improvement of the business environment. Upcoming policy announcements are likely to focus on formalising private employment and attracting FDI, including to the Mariel Port Special Development Zone.

US-Cuba relations unlikely to improve in one-year outlook: US President Donald Trump has made clear his intention to undo many of the normalisation efforts undertaken during former president Barack Obama's presidency. The recent appointment of John Bolton to national security advisor, who viewed Cuba as an adversary to the United States during his previous time at the Department of States, indicates that Trump is unlikely to walk back this policy, with the repeal of the Helms-Burton Law – and therefore lifting the US embargo – very unlikely in the one-year outlook. An improvement of US-Cuban relations remains conditional on meaningful and significant democratic political reform on the island, with important legislators, led by US Senator Marco Rubio, calling for additional sanctions on entities controlled by the Cuban military.

Isolated events of civil unrest unlikely to pose stability challenge to the new administration: Civil unrest risks in the form of spontaneous peaceful protests in Havana and in the western province of Santiago involving dozens of people are likely to moderately increase in the one-year outlook. Protests could potentially turn violent if met with resistance from security forces or if pro-government groups are mobilised to confront dissidents. Any increase in civil unrest to hundreds of people will lead to further repression and surveillance by the Cuban Department of State Security (Departamento de Seguridad del Estado: DSE). Arbitrary detentions are commonplace in Cuba with detainees often being released after been arrested for 72 hours and beaten up. Support among Cubans for the various dissident groups remains limited but is likely to continue slowly increasing, although not threatening the PCC's grip on power.


Diego Moya-Ocampos is a principal analyst for Country Risk at IHS Markit in the Americas team, covering the political, security and business environment in Latin American countries. This report was first published by IHS Markit on 19 April 2018.


20 April 2018