Red tape, bureaucracy and ideology limiting foreign investment in Cuba
Cuba's failure to encourage more foreign investment is crippling its economic performance and putting its goal of sustainable growth in danger unless changes are made, local experts and diplomats said this week.
The Castro family regime is in the midst of market-oriented reforms to its Soviet-style system that supposedly will make the island more investor friendly, but potential investors say the Cubans have not yet put out much of a welcoming mat.
The National Statistics Office said this week that investment by Cuba and its foreign partners was 4.3 billion Pesos in 2011, just 100 million Pesos more than the previous year.
The 2011 figure is equivalent to 15.9% of GDP, which is an improvement over recent years, but far below what the country needs, according to a local economist.
Omar Everleny, head of the University of Havana's Centre for the Study of the Cuban Economy, said earlier this year that Cuba had averaged investment, or what he called “gross fixed capital formation,” of just 13% in recent years, compared with an average of 23% in the rest of Latin America and the Caribbean.
Everleny argued that only foreign investment could close the gap, given the country's longstanding financial difficulties.
“International experience shows that countries that have achieved significant growth and improvement of their infrastructure and standard of living have had investment rates of not less than 30% of the GDP, with significant support of direct foreign investment,” he said.
The Cuban economy grew 2.7% last year and 2.4% in 2010, lagging well behind the region.
Cuba's investment reform plan announced last year spoke positively of foreign investment, promised a review of the cumbersome approval process and stated that special economic zones, joint venture golf courses, marinas and new manufacturing projects were planned.
But there have been more promises than changes and many obstacles to foreign investment remain, diplomats said.
A complaint shared by many foreign companies interested in Cuba is that Cubans insist on 51% ownership of new ventures, which companies do not want because they effectively lose control.
Suggested Stories
-
May 18th 2013
Maduro admits to knowing “the IDs and all” of the 900.000 Chavistas who did not vote for him
-
May 18th 2013
Argentina forces cancellation of all Lan flights by suspending ground services
-
May 17th 2013
Colombian president Santos announces he will seek second term
-
May 17th 2013
Argentina’s ‘autarkic project’ worsens bilateral relations and multiplies problems
14 comments Feed
Note: Comments do not reflect MercoPress’ opinions. They are the personal view of our users. We wish to keep this as open and unregulated as possible. However, rude or foul language, discriminative comments (based on ethnicity, religion, gender, nationality, sexual orientation or the sort), spamming or any other offensive or inappropriate behaviour will not be tolerated. Please report any inadequate posts to the editor. Comments must be in English. Thank you.
He told me They proposed only Tourism Investment..not any other things.
They have no any midterm--longterm visions ,dont know what they want.
If people become rich & free then they won´t be communist....of course...!!!...It´s a democratic law and practice...
How is it that argentina support democracy in cuba again?
50 years run by one person and primarily supported by the USSR, until they feel. The amount of people that are willing to die crossing that narrow strip of water is amazing.
And, if they wait until there is a visit by the new Deity, TMBOA, they can do the same to her as well.
I would pay real money to witness that conjoined event.
And among the poorest with no hope for those who want to work and improve their lives.
Despicable people in charge, just like AG and her ilk.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!