To save time and money

With the approval of new legal regulations to undertake investments, the Cuban government took another step in the strategy of expanding the margin of autonomy of national enterprises. Before the end of January, Decree 327 put into force a “Regulation for the investment process” accompanied by a group of 14 complementary resolutions with the aim … Leer más

The investment activity has been traditionally hindered by inefficiencies that delay even the conclusion of prioritised or costly works.

The investment activity has been traditionally hindered by inefficiencies that delay even the conclusion of prioritised or costly works.tradicionalmente con ineficiencias que retardan incluso la conclusión de obras priorizadas o de gran monto.

Foto: The investment activity has been traditionally hindered by inefficiencies that delay even the conclusion of prioritised or costly works.

With the approval of new legal regulations to undertake investments, the Cuban government took another step in the strategy of expanding the margin of autonomy of national enterprises. Before the end of January, Decree 327 put into force a “Regulation for the investment process” accompanied by a group of 14 complementary resolutions with the aim of organising one of the activities most affected by the economic inefficiency and planning weaknesses.

In the reports of the close of the year that the Economy and Planning Ministry presents to the National Assembly of People’s Power (unicameral parliament), the non-fulfilments of investments usually come up among the country’s most onerous. The delays and million dollars’ worth of damages pile up from the moment projects are conceived to the construction and assembly of the works and their start up. These reasons, together with the numerous participants and responsibilities, make the investment process one of the most complex problems.

Usually present in practically all the sectors of the economy, the legal dispersion that existed is added to this burden.

The new juridical package regulates all the investment activity on national territory, whether carried out by state-run enterprises or Cuban non-state entities as well as if they are joint ventures, international economic associations or 100 per cent foreign capital companies, according to Economy Deputy Minister Oscar Acuña.

Until now the entities from other countries were only governed by the Law on Foreign Investment and did not take into account Resolution 91 of 2006 of the economy portfolio, which regulated that activity. From now on all the concepts are unified so that the “foreign investments under way concur with the remaining juridical regulations of the investment process,” Acuña explained. “There are general principles and concepts in Decree 327 that are applied to all investments, since both documents are compatible,” the juridical director of the sector, Johana Odriozola, commented.

Both officials clarified that exceptions are previewed for the Special Development Zones and the operations undertaken by the Office of the City of Havana Historian, which have their own regulations and requirements. “But the general precepts of this decree are not opposed to what is stipulated specifically for them, since they are applicable to all investment processes,” said Acuña.

As part of the organisation that the government intends to implement, it will demand the training and accreditation with title of all investors – the principal individual of this activity – so they can carry out their orders. It also defines functions and obligations for the figures of the supplier, the construction entity, the exploiter and the contractor, whose borders and duties were previously lost in a legal mist.

Decree 327 also introduces a rule that did not exist, the tendering of projects, construction, suppliers and other steps, to “seek the best offer in an atmosphere of transparency and competitiveness,” the economy deputy minister said.

This regulation joins another guideline that the government are insisted on implementing for several years: more precise contractual relations. It thus gives continuity to the intention assumed by President Raúl Castro in person since he began the updating of the economic model: the institutionalisation of the country and the leadership through economic regulations and the law.

After years of centralising in the Economy, Foreign Trade ministries or in the Council of Ministers up to 85 per cent of the investments, including many small-scale ones, a gradual process began in 2014 to make flexible the business leadership also in that complex sphere.

According to Deputy Minister Acuña, the leadership of enterprises can already approve investments that “guarantee the simple reproduction of their activity, the re-equipment and the support of their functions,” without having to consult higher levels. The Economy and Planning Ministry will be responsible for assessing and approving projects when they exceed 15 million dollars.

Under the recently legislated rules of the game, several government agencies are now responsible for giving the green light to the execution of investments, from the point of view of the geographical location, environmental safety and compliance with other requirements.

The legislation establishes time periods of 30 to 90 days to give a reply, according to the complexity of the project. If not complied with, it will constitute a “positive silence,” said the deputy minister. “These are regulations that allow for agencies to function automatically and acquire extraordinary responsibility,” he added.

The government thus gives continuity to the measures introduced last year to confer greater autonomy to the enterprises and reduce the space for the system of bureaucratic administration that has dominated the Cuban economy. (2015)

Normas para comentar:

  • Los comentarios deben estar relacionados con el tema propuesto en el artículo.
  • Los comentarios deben basarse en el respeto a los criterios.
  • No se admitirán ofensas, frases vulgares ni palabras obscenas.
  • Nos reservamos el derecho de no publicar los comentarios que incumplan con las normas de este sitio.