medidas, Cuba

Measures for foreign investment were born weighed down

Havana Cuba. – The new measures of the Cuban Government for trade they are born weighed down by their selectivity, exceptionality and subordination to the state company. The Government hopes that they will reverse the shortage and contribute to improving offers in stores in freely convertible currency (MLC) and in the national currency, but these aims seem unrealistic.

Now, the search for foreign investment is reinforced as the only option to obtain financing due to the Government’s inability to achieve it through the production of state-owned companies and agricultural organizations. Likewise, private initiative through MSMEs is becoming indispensable due to its efficiency and resources, while at the same time eroding the rejection of the hardliners to the exercise of private property.

The Minister of Internal Trade, Betsy Díaz Velázquez, and the First Deputy Minister of Foreign Trade and Foreign Investment, Ana Teresita González Fraga, explained on national television, this August 15, the package of measures to promote wholesale and retail businesses through Foreign investment.

The deputy head said that benefits are sought through access to supply markets, attraction of financing, equipment, administration methods and the use of innovative techniques for logistics management.

He also explained that these businesses will be used, fundamentally, for the sale of raw materials, supplies, equipment and other goods that contribute to promoting the development of national production. The authorities intend to increase consignments and, to a lesser extent, the sale of merchandise under customs warehousing, in order to have the goods in the country.

The new measures also seek to pre-finance national producers with conditions to be suppliers, since there are capacities that, due to lack of financing, cannot produce goods.

Foreign investment businesses may directly supply goods and services to forms of non-state management, NGOs, embassies, business representations and branches in Cuba. Foreign businessmen who have settled on the island for a long time will have priority in business.

The deputy minister also stressed that foreign investment had not been prioritized in trade because the main projects included the production of goods and services. She specified that now it will not be exceptional, but it will not be completely open either due to the primacy of the state market and social programs.

In wholesale trade, the fundamental modalities were joint ventures and international economic association contracts, with a common fund or by service. Now the attraction of capital and the uptake of new technologies are sought, as well as the incorporation of management and marketing methods.

Today there could be a participation of totally foreign capital companies. There may also be joint ventures and international economic association contracts. The Cuban parties that can participate will be selected and the existing joint businesses that can be incorporated into wholesale trade will be evaluated.

The deputy minister emphasized: “We have not renounced and will not renounce the foreign trade monopoly. This is a very important element that must be taken into account… It will continue to be the Cuban State that regulates and controls foreign trade.”

The inability to produce in state enterprises and agriculture, and to substitute imports and export, is more deeply rooted than the marabou. Like straitjackets of a new kind, the 75 measures to increase foreign exchange earnings and diversify the economy are subdivided into hundreds of measures, which reinforce the immense spider web, nurtured by the “followers.” It is not uncommon, therefore, that when trying to innovate they become entangled in the practices learned from birth.

Internal trade is the sector with the greatest corruption, generated by decades of scarcity. The rationing system for essential foods has encouraged theft and illicit sale. Millions of pesos from sales have stopped being deposited in banks and accounts payable drag from year to year.

The opinions expressed in this article are the sole responsibility of the issuer and do not necessarily represent the opinion of CubaNet.

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