At the recent Havana International Trade Fair (FIHAV 2015) Cuba confirmed its appetite for foreign capital as a key resource to revitalise the economy. One of the principal attractions of during FIHAV 2015 was the presentation of the second Foreign Investment Opportunities Portfolio, which expanded the number of doors opened for foreign companies a year before.
Foreign Trade and Investment Minister Rodrigo Malmierca presented in person the Business Portfolio to exhibitors from dozens of countries who came to Havana on this occasion. The portfolio offers 326 projects, 80 more than the first version, distributed among 12 sectors of the economy, including health for the first time, with three projects for installations to develop the export of health tourism services and a similar offer related to sports.
The leisure industry continues being the sector with the most options to attract foreign capital, with 94 proposals, ranging from the construction of hotels and marinas to the deployment of golf courses and other non-hotel installations. Tourism is the economic activity that today contributes the most hard currency to Cuba, after the export of medical services.
The government has opened to investments activities on which key hopes for development are pinned, like the construction of installations for the reception of ships, especially cruise ships, in the principal Cuban ports, including that of Havana.
In the Opportunities Portfolio tourism is followed by oil, with 86 projects, and agribusiness, with 40. Among others, it proposes business deals for the transformation of the energy matrix, to take the use of renewable energy sources from the four per cent they contribute today to 24 per cent in a period of 15 years.
The Cuban authorities insisted that the great majority of the projects already have pre-feasibility and viability studies to make the offer more flexible. Malmierca asserted before the guests to the Fair the country’s features that the Cubans consider as this market’s advantages to invest and do business. Among others he mentioned the privileged geographical location of the archipelago, the abundant highly-trained workforce the companies can count on, together with the numerous scientific and academic installations, as well as its historical and cultural wealth.
However, the minister warned that the economic blockade imposed by the United States for more than half a century continues being “an obstacle for our commercial economic development.”
Another usual hindrance businesspeople from other countries observe is the Cuban government’s slow pace in establishing and bringing to a successful conclusion the negotiations. A sign of this is the still small number of investments authorised since Parliament approved in April 2014 a Law on Foreign Investment openly more favourable for that financing option.
The government withdrew from the Portfolio presented in 2014 dozens of projects, an important amount of which are underway with some foreign company. Malmierca said that currently more than 40 projects are at an advanced stage of negotiation and he is confident they will materialise by late 2016.
The Cuban government has pinned its hopes in expanding the business alliances with foreign capital as an alternative for financing the national economy. A year and a half ago Economy Minister Marino Murillo expressed before Parliament the hope of increasing investments to a figure between 2 and 2.5 billion dollars; that amount increases by fivefold the investments of a year in the best times. According to Murillo, they would be necessary to reach a growth rate of between 5 and 6 per cent of the Cuban economy.
The projects offered by the Business Portfolio would make it possible to attract more than 8 billion dollars.
In addition to planning investment options in all the provinces and the Special Municipality of Isla de la Juventud, the document proposes 20 projects for the Mariel Special Development Zone. The authorities of this enclave availed themselves of the holding of the Fair to report that they have already approved eight investment agreements: five from 100 per cent foreign capital, two Cuban and a Cuba-Brazil joint venture. The countries that have made incursions into the Zone include industries from Mexico, Belgium, Spain and Cuba. (2015)
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