Cuba seeks to promote foreign investment amid COVID-19

by Yosley Carrero

HAVANA, Aug. 13 (Xinhua) — Cuba seeks to attract foreign investment, incorporate the country’s economy into the global market, and improve the competitiveness of its products despite the coronavirus pandemic and the intensified U.S. economic embargo against the island.

Earlier, as a new step to draw business people, the Caribbean nation launched a “single-window” service for foreign trade, an online platform that will expedite import and export processes for local and foreign investors.

Cuban Minister of Foreign Trade and Investment Rodrigo Malmierca said that once the three-phase single-window service is completed, companies, declarants, freight forwarders, transporters, and foreign suppliers will be able to better deal with registration, permits, as well as payments.

“After successfully managing the coronavirus crisis, the government will implement a social and economic development strategy in the context of a longstanding economic crisis,” he said. “We will not give up on our intentions to promote social and economic development, and computerize the Cuban society.”

The Cuban Ministry of Foreign Trade and Investment (MINCEX) also said that the single-window service will reduce business procedures without modifying the existing regulations, adding that the online registration is being tested and will be put into operation in October.

The single-window service comes as the Cuban government is taking measures to help recover the country’s economy, which has already been severely hit by the U.S. economic sanctions.

Cuban President Miguel Diaz-Canel said the United States is upset about Cuba’s effective fight against the epidemic, adding that “we are adopting new measures … to successfully move on and develop the country.”

“We have to get accustomed to living with fewer imports and more exports by promoting national production to meet internal demand and enhancing the role of local governments,” he said.

Cuba imports machinery, fuel products, technologies, and 60 to 80 percent of the food it consumes, according to official figures.

Among the country’s major sources of hard currency are medical services, tourism, biopharmaceutical products, nickel, rum and cigars.

In July, the island lifted a 10-percent tax on U.S. dollars as part of the government’s socio-economic plan to help the country recover from the COVID-19 pandemic.

Meanwhile, small and medium-sized private businesses will be permitted to import and export products and services through 37 state-run enterprises, the government said.

Cuba has offered incentives to attract investors at the Mariel Special Development Zone, which is poised to play a leading role in the country’s development with a free-trade zone and a container terminal.

So far, 55 businesses from 21 countries, including China, have been approved in Mariel.

Vivian Herrera, director general of foreign trade at the MINCEX, said that “Cuba intends to boost collaboration with important partners like China and better connect with international airports, ports, and customs. We can help Cuba find business opportunities.”

Cuba opened to foreign investment in the early 90s after the Soviet Union collapsed.

The new Cuban Foreign Trade and Investment Law came into force in 2014 in the context of the country’s economic and social reforms.

Still, the U.S. embargo hinders banking operations and financial transactions by companies based on the island and bars U.S. enterprises from investing in Cuba.

On top of that, the Trump administration enacted Title III of the Helms-Burton Act in May last year, giving U.S. nationals and companies the right to sue foreign citizens and enterprises investing in properties nationalized by the Cuban government.

Among foreign companies that have faced lawsuits under the Helms-Burton Act is Melia Hotels International, a Spanish hotel chain with three decades of operations on the island.

Francisco Camps, deputy director general of Melia Hotels International in Cuba, said that the European hotel chain is committed to continuing to invest in the Caribbean nation for years to come.

“We want to continue expanding our businesses on the island,” he told Xinhua. “In 2021, we are expected to open a new and modern five-star hotel in Trinidad, which will meet COVID-19 health protocols and social distancing rules,” Camps said, referring to the town in central Cuba.

Foreign investment projects in Cuba cover a large variety of economic areas ranging from construction and renewable sources of energy to oil extraction and consumer goods production.

The annual Havana International Fair, first held in 1983, attracts thousands of business people and entrepreneurs from all over the world, although this year’s edition has been canceled due to the pandemic.

Teresa Lara, an economic analyst at the Enterprise for Knowledge Management and Technology, said that the potential of the private sector plays a vital role in attracting foreign investment.

“State enterprises, joint ventures, and the private sector can work together, share technology, and innovate. Foreign investment can enhance local development and work as an important source of employment for thousands of Cubans, including young people,” she told Xinhua.

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