Completer article is located here: From the Island #25, Investment in Cuba
From the Island #25, Cuba Study Group December 22, 2014
An analysis by Rafael Betancourt and Omar Everleny Perez (Centro de Estudios sobre la Economia Cubana, Universidad de ka Habana) of the portfolio of opportunities created by Cuba’s new Foreign Investment Law No. 118
CONCLUSIONS
The Portfolio of Foreign Investment Opportunities suggests that the Cuban government has adopted a proactive posture and is clear as to where it wants to direct and promote investments. It is much easier to stimulate the influx of foreign capital when there are precise ideas of what they are looking for. But the legal framework per se is not enough. It is necessary to organize / adjust (poner a punto) the entire environment for doing business in the country, which includes the banking system, customs and the tax system, as well as telecommunications, domestic trade and the real estate market. The potential for exporting TIC services, for providing consulting and other professional services, in association with various national investors including cooperatives, could attract a significant amount of FDI and provide well-paid jobs to an important number of professionals in the country.
The Portfolio underscores mainly large investments, to the detriment of small and medium ventures, when they—in fact—are not mutually exclusive. The international practice demonstrates that medium enterprises tend to be more active in FDI that large multinationals, which have other interests associated with global value chains. In subsequent editions there should be greater number of opportunities for infrastructure projects, especially design and construction of highways and bridges, currently very deteriorated, together with telecommunications, to employ global technologies of e-commerce and messaging, among others.
The Portfolio prioritizes production for export, which will have a large import component. The country will need to guarantee the necessary facilities and flexibility of related institutions and mechanisms related to both. The excessively centralized form of planning that prevails today will need to be adjusted to the new times.
Nor does the Portfolio encompass all possible foreign investments with the State sector: negotiations continue for projects under consideration before the Portfolio was published, others that stem from bilateral and multilateral agreements signed between Cuba and other nations, and still others such as those associated with the rehabilitation of the Havana Harbor, which changes function and morphology with the transfer of many of its industrial and port activities to Mariel and other areas.
Finally, agility in the decision-making process is an essential component in order for foreign capital to arrive with the swiftness that the Cuban economy requires, even though it has been a very gradual process to date. But the undercapitalization and accumulated needs require a quicker pace than has been adhered to until now.
