Soviet troops began to withdraw from Cuba in September 1991 over the latter’s objections that the withdrawal would compromise the island’s security. When the Soviet Union dissolved later that year, the already troubled Cuban economy suffered further from the loss of vital military and economic support that had, in effect, constituted subsidies. Amid severe internal shortages, and with unrest and dissatisfaction growing, Castro declared a “special period in peacetime” of food rationing, energy conservation, and reduced public services. Unemployment increased, and shortages of food, medical supplies, raw materials, and fuel were exacerbated by the ongoing U.S. trade embargo.
In 1993 the government legalized small businesses such as paladares (family restaurants), private employment, and the use of U.S. dollars (notably remittances from abroad) in Cuba. The following year independent farms and farmers’ markets were encouraged. The government also attracted foreign capitalists, including Canadian and Spanish hoteliers. Christmas was restored as a national holiday in 1997, in anticipation of what turned out to be a highly successful visit by Pope John Paul II the following year. The economy improved markedly, led by the tourist sector, but many Cubans began to question the future of socialism. In 1996, after Cuba shot down two small aircraft piloted by a Florida-based anti-Castro group, the U.S. Congress passed the Helms-Burton law, which threatened sanctions against foreign-owned companies investing in Cuba.
In 1999 prominent dissidents in Cuba were jailed and repressive laws enacted, prompting further international criticism. In the early 21st century, Cuba benefited from a petroleum-trade agreement with Venezuela and eased some of its more restrictive economic and social policies.
Although Castro maintained a firm grip on power, speculation grew outside Cuba on the state of his health, especially given his advancing age. Increasing attention was focused on his brother and designated successor, Raúl Castro Ruz, who was also the head of the armed forces, and Ricardo Alarcón de Quesada, the influential president of the National Assembly. Indeed, on July 31, 2006, while recovering from surgery, Fidel Castro passed power on a provisional basis to Raúl.
In February 2008 Fidel Castro officially announced that he would not accept another term as the president and commander in chief of Cuba, a position that he had held for 49 years; Cuba’s National Assembly chose Raúl as Cuba’s new leader. Soon after the transfer of power to Raúl Castro, Cuba abolished its equal pay system, removing wage restraints that had been in place since the early 1960s. Other reforms were implemented as well, with Cubans being allowed to purchase cellular phones and personal computers and to stay at hotels formerly reserved for foreigners. The European Union, which had imposed sanctions against Cuba in 2003 for its repression of dissidents, lifted the sanctions in June 2008, a move that was criticized by the United States.
Representatives of the Roman Catholic Church and Spain negotiated with the Cuban government in 2010 for the release of 52 political prisoners. The dissidents had been imprisoned as part of a 2003 crackdown on journalists and activists who, according to Fidel Castro, had been undermining the Cuban government on behalf of the United States. Although the government issued no statement about the negotiated release, seven of the prisoners were freed in mid-July 2010 and immediately sent to Spain. In September, only days after Fidel Castro had told an American reporter that “the Cuban model doesn’t even work for us anymore,” Raúl Castro announced new official toleration of private enterprise and the layoff of some 500,000 government employees. "Cuba" © Emmanuel BUCHOT, Encarta, Wikipedia
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