La llave del Mariel

The creation of the first Special Development Zone opens expectations and alternatives in the face of one of the problems that most affects the Cuban economy.

The presidents of Cuba and Brazil, the two countries allied in the investment of the Mariel Special Development Zone.

When Brazilian President Dilma Rousseff and her colleague and host Raúl Castro cut the ribbon to inaugurate the Mariel Container Terminal they confirmed the takeoff of a work viewed not just as the largest investment in recent times in Cuba.

The renovation of that port and the creation of the first Special Development Zone have unleashed questions, expectations, profound meanings from the point of view of the island’s economic policy and even daring dreams, like the forecast of the exhaustion of the U.S. economic blockade on this Caribbean nation.

At the moment of the official debut, the four powerful portico cranes imported last July from China were already unloading from the ship K-Breeze, moored in the new 702-metre-long pier, boxes of U.S. frozen chicken packed in 500 containers bearing the logo of Rowley, a U.S. maritime transport company. The ship arrived backed by a special license from Washington because the blockade laws forbid for six months the return to U.S. ports of the vessels that touch Cuban coasts.

The terminal, equipped with another 12 cranes in the container patio, latest generation equipment and an automated digital system for the location of the merchandise, carried out the unloading in only three hours, Mercedes Petar, director of operations appointed by the PSA firm of Singapore, which manages the port, announced. A week later another merchant ship, of the Hamburg Sud shipping company, would take its place.

With the first stage concluded, Mariel is capable of operating every year some 822,000 containers (20 feet or 6.1 metre long, according to the TEU measurement for containers), but the investment has plans to extend the pier in upcoming years to up to 2,400 metres and increase fourfold the area of the neighbouring patio, close to 30 hectares at present. It would then expand the manipulation capacity to three million TEU per year.

The great doubt is whether such dimensions will find sufficient commercial flow in the Cuban economy or whether the more than 50-year-old U.S. obstacles will allow in Mariel the traffic or reloading among third countries, one of the declared objectives of the megaport.

The Brazilian president, present in Cuba for the Summit of the Community of Latin American and Caribbean States (CELAC), gave an answer to this in the work’s inaugural speech. “Despite being submitted to an unfair economic blockade, Cuba generates one of the three largest volumes of trade in the Caribbean, a performance that will substantially increase with the start up of the Port and the Mariel Special Development Zone.”

Meanwhile, the Cuban authorities have declared that the first mission of the new installation will be to assume Havana’s shipping trade. The bay of Havana lacks sufficient depth for the ships of the Post Panamax or Superpost Panamax era, being developed with the expansion of the Panama Canal. The port of Havana will be reserved for cruise ships and other tourism vessels, fundamentally.

As confirmation of the Brazilian bet, Dilma Rousseff announced that her government will expand the 802 million dollars invested in the first stage by the National Economic and Social Development Bank (BNDES). The new 290-million-dollar financing will be for the Mariel Special Development Zone (ZED), adjacent to the port.With four portico cranes imported from China, among other modern equipment, the new installation unloaded 500 containers from the first ship in barely three hours.

Mariel, located some 45 kilometres west of Havana, is already nearing the capacity of the principal port bases of the Caribbean, but when the expansion concludes it will be the largest after Panama. The estimates and aims seem to respond to something more than a gesture of solidarity or collaboration.

When speaking at the opening of the megaport, Raúl Castro, who has reiterated the “transcendental” character of the work and its value as a main door for Cuban foreign trade, revealed aspirations: “its geographical location along the route of the principal maritime transport flows in our hemisphere will favour the consolidation of its position as a first-class regional logistic platform.”

The studies anticipate, moreover, that the traffic of containers in the United States in 2020 would surpass the operational capacity of its own ports. Therefore, the importance of the Caribbean port bases would increase.

Though some media predict the failure of the Cuban plans due to the U.S. commercial and economic obstacles, Mariel could become, on the contrary, a difficult challenge for the blockade, above all at a time when the changes in the Cuban economic policy are increasingly more evident.

Judging by the government’s statements, the Mariel ZED points to becoming a more flexible and pragmatic door for foreign investments in Cuba. The awaited approval in March of a new foreign investment law, in a special parliament session, would confirm this assertion. But more than the letter of a juridical regulation, the political will be a decisive factor to adopt a less closed or rigid position than the one assumed before investors from other countries. That alternative, which enjoyed a boom in the 1990s, gradually contracted since early last decade as a result of the accumulation of errors and lack of internal controls, added to the traditional reluctance to give foreign participation in national businesses.

“A new stage is beginning now,” Raúl Castro said before the guests to the inauguration of the Container Terminal, “in which we aim to promote important national and foreign investments in the Mariel Special Development Zone that allow for increasing exports, the effective substitution of imports, the hi-tech and local development projects and that contribute with new employment sources.”

The director of Economic Policy of the Foreign Trade and Investment Ministry (MINCEX), Pedro Pablo San Jorge, recently announced to British investors that the new policy for foreign investment that would be endorsed as law has already been approved.

The most marked change, judging by the official’s comments, is that foreign capital will stop being understood as a complement to the island’s investment efforts, a concept accepted until now, and would play a more important role, even in areas like agriculture, where foreign investment is not frequent.

That variation is also perceived by an outstanding Cuban economist, Juan Triana Cordovi. According to the ANSA press agency, the expert considers that “what previously was a complement to the national investment effort, today is understood as an essential component to achieve the growth rates needed by the country.”

The director of the Office of the ZED, Ana Teresa Igarza, recently reported on the contact of 138 possible investors, 66 seeking information and the rest with direct purposes, since the Havana International Trade Fair launched the offer to the world in November. Out of the direct applications, 35 were already involved in the paperwork process, 17 are being analysed and 20 were declined because they did not meet the interests and conditions of the Zone.

The sectors of interest to these first approaches include containers and packing, the chemical and light industries, construction materials and implements and the biotechnology and pharmaceutical industry.

The Brazilian Odebrecht company, an investor in the ZED project, signed last January 27 a document to create in that enclave a joint venture with the marketing entity of the Molecular Immunology Centre, Cimab S.A. The agreement establishes the bases to constitute an entity dedicated to the industrial production of therapeutic monoclonal antibodies, innovative and known, with Cuban technology and Brazilian capital.

“The possibilities for joint industrial development are great,” Dilma Rousseff affirmed.

In addition to the Brazilians, businesspeople from Spain, Italy, Russia, Argentina, Chile, Dominican Republic, Panama, Mexico, China, Vietnam, Canada and the United Kingdom have started negotiations and are exploring the terrain.

Foreign companies traditionally consider Cuba as an interesting marketplace for investment, due to the training of its human resources. The Mariel ZED and the law in perspective would be the first steps to resume that path and march toward the solution of one of the problems that most affects today the Cuban economy: the restriction of capital in hard currency to renovate its technology, strengthen its industry and expand its productions and services.

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