By Cuba Standard, January 19, 2014
A high-ranking Cuban official told a group of British businesspeople that the changes foreseen in the new foreign investment law the National Assembly will discuss in March are deeper than originally discussed by the government.
“Even though the present regulation — Law 77 of 1995 — could coexist in the current condition of the Cuban economy, it was decided to make [the new law] much deeper and adjusted to the present conditions of the country,” Pedro San Jorge, director of economic policy at the Ministry of Foreign Trade and Investment, told a British delegation at a forum in Havana, according to official business weekly Opciones.
“Foreign resources will now transcend the complementary role to domestic investment efforts, and they will occupy an important role, including in areas, such as agriculture, where foreign investment has been infrequent,” San Jorge said, according to Opciones.
Earlier during the week, a British startup company announced it will invest $4 million in privately-run coffee farms in eastern Cuba.
The Council of Ministers is currently working on the new foreign investment law, and the parliament will discuss a bill in March, Raúl Castro told the National Assembly in December. Foreign investment is of “crucial importance to speed up the economic and social development of the country,” Castro said.
Foreign businesspeople in Havana are cautious about their expectations for the law.
“Personally, I have very little expectation in terms of the new foreign investment law — it can’t be better than Mariel,” one businessman said, referring to the new Special Development Zone at Mariel (ZEDM), an export processing zone that pioneers new openings such as 100-percent ownership by foreign investors.
San Jorge said that some of the changes “will be in line” with the law that regulates the Mariel Zone. Cuba’s current practice forces most foreign investors to be minority partners in joint ventures with a state company.
San Jorge also said that his government is advancing on elaborating a “new portfolio of business opportunities” that will attract capital and technology.
“We must boost the capacities of the country to generate many of the products we import right now, and in this, there are opportunities for British businesses,” San Jorge told the delegation.
Brian Wilson, representative of United Kingdom Trade & Investment (UKTI) in Havana, said the incentives package at Mariel “will be interesting for many companies.”
Meanwhile Yanet Vázquez, assistant director of the office that runs the Mariel Zone, told the group that the biggest interest by foreign investors has been in industrial projects since the ZEDM opened up inscriptions for potential customers in November. According to Vázquez, 38 percent of the proposals are industrial projects. Twenty-one percent of the inquiries are for agribusiness, and 13 percent are related to infrastructure construction.
Neither did Vázquez provide the number of total applications, nor did she specify other percentages.
She explained in great detail the incentives for foreign capital investing in the ZEDM.