Much ado about nothing

Much ado about nothing
FERNANDO DÁMASO | La Habana | 12 Nov 2015 - 4:47 pm.

The Feria Internacional de La Habana just ended. Previous editions of
the event have yielded scant results. It would be worth knowing what
this latest event has generated.

The Mariel Special Development Area, Foreign Investments Law, legal
amendments, portfolios of opportunities, promotional trips to many
countries, yet another new portfolio of opportunities, and another Feria
Internacional de la Habana, etcetera. Many activities and paltry
results. There is only talk of eight approved projects initiating their
investment processes, without specifying which ones.

Cuban authorities today acknowledge that that the country needs foreign
investment for its development, without which it will be impossible.

Investors, whatever country they are from, care little about the social
system of the country where they intend to invest: they do not care
whether they are democratic or totalitarian, or whether or not they
respect citizens' freedoms and rights. Investors are interested,
however, in the legal security of their investments, earning quick
profits, and recovering the capital they have invested in the shortest
time possible.

These conditions do not currently exist in Cuba. Moreover, there are
restrictions that make investing decidedly unenticing: the investor
cannot directly hire workforces, but rather must do so through a
government contracting agency, to which he gives the funds for wages,
paid in foreign currency, with the agency paying the workers in devalued
Cuban pesos, at a rate of 2x1, when the official rate is 24x1; 70% of
production must be commercialized in the country, in a depressed market
where the population has limited financial resources because it receives
measly wages; and they must export 30% to highly competitive markets
where major brands have been established for years.

And, as if that were not enough, disputes arising between foreign
investors and the Cuban Government must be settled in the Cuban courts.

At the recent International Fair in Havana the potential comprehensive
export of goods and services for health and sustainable agro-industrial
development were proposed, with great added value promised. The proposal
seemed almost a bad joke in a country where health services for citizens
are seriously deficient, and agro-industrial development is
conspicuously absent, unable to meet the country's food needs via
domestic production, with many products having to be imported.

It is striking how little has been published about whatever actually
came of the letters of intent or commercial agreements signed at the
edition's previous 32 editions. Apparently little ever came of them. It
would be healthy for the country if, after this 33rd edition, this
phenomenon were not repeated and yielded more than attendance figures,
without tangible results.

With all these limitations it is very difficult to get foreign investors
(Cubans are still excluded) to risk their capital. The rules of the game
must be significantly changed, and the Cuban government must finally
understand that it cannot control everything. In its present form, this
policy of attracting foreign investment is doomed.

Some signs of this are already are visible.

Source: Much ado about nothing | Diario de Cuba -
http://www.diariodecuba.com/cuba/1447339633_18047.html