In a move unprecedented since Fidel Castro’s 1959 revolution, Cuba is now inviting foreign investors into its internal commerce.
Over the past two years, lack of tourism, US economic sanctions and the pandemic-induced recession have plunged Cuba into one of the worst crises in decades. In Cuba, half-empty retail stores and shortages of basic necessities like gasoline and flour have become even more common.
So, in a move unprecedented since Fidel Castro’s revolution in 1959, Cuba is now inviting foreign investors into its internal commerce – foreign private companies will be allowed to operate local wholesale businesses in their own right or enter the market through joint ventures. Direct retail businesses will only be open to public/private businesses.
“We have not yet fully realized the benefits of foreign investment in internal trade,” Ana Teresita Gonzalez Fraga, Cuba’s deputy foreign minister, said in August. The goal, she added, was to get more raw materials and goods to producers and consumers. “We will promote the sale of commodities, equipment and other goods that will be used in the domestic production of end goods such as food, cleaning products and electrical installations.”
The measures are aimed at filling store shelves to alleviate public disaffection. “Growing discontent over long lines for basic commodities, shortage of gasoline and constant power outages have propelled Communist Party officials to press ahead with reforming an economy run by the state,” Fraga added.
In another measure, the Cuban government has raised the possibility of reselling US dollars to individuals, which was banned last year. The ultimate goal would be to establish a foreign exchange market in the country.
Some economists say the investment incentives are too weak and too vague to attract the interest of big international investors. And such investments will not replenish those empty shelves overnight.