FIHAV 2013: new positions in the face of foreign investment?

This year the star of the Caribbean’s largest trade fair was the presentation of the Mariel Special Development Zone.

The Havana International Trade Fair kept at the centre of the national pavilion the biotechnological and medical pharmaceutical development alternatives.

The 31st Havana International Trade Fair (FIHAV 2013) was the perfect setting for the launching of one of the works on which the Cuban government is placing its greatest hopes: the Mariel Special Development Zone. Together with other transformations or announcements in this country in the last few years, the event attracted from November 3 to 9 to the EXPOCUBA fairgrounds a number of participants never seen in more than a decade.

The Regulatory Office that manages the zone located around the bay of Mariel opened its doors last November 1, just two days before Vice President of the Council of Ministers Ricardo Cabrisas cut the fair’s inauguration ribbon and Foreign Trade and Investment Minister Rodrigo Malmierca welcomed the representatives of more than 1,400 companies from 65 countries. Out of this total, a bit over 900 were foreign companies.

Cuba’s major trade partners, Venezuela, China, Russia, Spain and Canada, in that order, maintained a strong presence, but other countries’ presence was expanded in the exhibition pavilions. The Spanish firms continued being the most numerous at the fair, while the Venezuelan, Chinese, Brazilian and German ones showed the most growth.

The number of participants increased with the visits and representations of foreign chambers of commerce, other official delegations and international institutions.

According to the organisers, this is the highest amount of exhibitors in 11 years. Is this a reply to the signs being sent by the economy of this Caribbean nation?

At the opening Malmierca spoke of the vitality and growth of the Cuban economy and gave as example that the gross domestic product (GDP) had advanced 3 percent in the last 18 months, a rate, actually, still below the needs considered by economists and by the government itself when it presented the Economic and Social Policy Guidelines in 2011.

The most interesting information for the exhibitors came from another angle. The minister confirmed that the Cuban economy continues in full process of transformation and referred to the macroeconomic policies approved by the government in terms of currency, credit and taxes. He especially referred to the work being carried out in the updating of the regulatory framework of foreign investment and considered as important the role foreign capital would have to play in the development of the Cuban economy.

“Once that policy is approved, we hope to have a portfolio of projects by sectors that facilitates the identification of serious partners, with interest in associations with Cuban enterprises in the search for mutual benefits,” the minister noted.

The importance granted to foreign investment was ratified days later in talks held during the fair. Both foreign and Cuban businesspeople tried to read in Malmierca’s words a change of attitude in the face of the injection of foreign capital.

The Economic and Social Policy Guidelines approved in 2011 by the Sixth Congress of the Communist Party of Cuba recognise the need for a space for foreign investments though they keep a certain distance when proposing “to continue favouring the participation of foreign capital” but understand it “as a complement to the national investment effort, in those activities that are of interest to the country, according to the short-, medium- and long-term economic and social development projections.”

For the time being, the first concrete sign of a more open position in the face of investments by foreign companies is the creation of the Mariel Special Development Zone (ZED), presented during the fair by the foreign trade and investment minister and the general director of the recently inaugurated Regulatory Office, Ana Teresa Igarza.

During a general forum and subsequent meetings of the Office executives with businesspeople by countries, the ZED was served on a platter with the mission of “of promoting sustainable economic development by attracting foreign investment, technological innovation and industrial concentration, with a view to increasing exports, effectively substituting imports and generating new employment sources, in a constant coordination with the domestic economy,” according to the document presented.

The most complex work begun by Cuba in more than two decades – based a millions of dollars’ worth of official financing by Brazil – took advantage of the fair to promote itself and catch investors. Judging by some reports by the Office cited by Telesur and the media on the web, companies from several countries expressed their initial interest in establishing themselves in the new space, with a strong presence, not by chance, of the Asians and Cuba’s trade partners: China, Japan, Vietnam, Russia, Germany, Mexico and Brazil.

“Special policies will be established in the Special Development Zone with the aim of promoting a sustainable economic and environmental development through the attraction of foreign investment, especially those that contribute technological innovation and management,” the minister specified.

Both the Mariel ZED and FIHAV 2013 ratified the search for businesses that develop, in addition to traditional products, the new alternatives that are starting to identify and yield greater profits for the Caribbean nation, like biotechnology and the medical pharmaceutical industry. (2013)

 

 

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