More foreign investment?

One of many blanks to be filled in when it comes to Cuba’s economic policy is what officials mean when they say they want more foreign investment.

It could mean they will do more intense marketing and negotiations without changing the current policy framework. It could mean that they are going to change policies to make conditions more attractive to potential investment partners. It could mean they are going to look for partners in sectors of the economy – sugar, agriculture – where there has been bureaucratic resistance to foreign investment.

Regardless of how they proceed, Cuban officials will have to deal with the fact that in closing about 100 joint ventures in recent years, they have likely damaged their own investment climate.

The minister in charge of foreign investment, Marta Lomas, now says that the tourism sector is the top priority. In that sector, Cuba used foreign capital to build hotels in the early 1990’s but switched to using its own capital once its foreign exchange position improved. Perhaps the idea today is to enter new joint ventures to build golf courses and other non-hotel developments that would diversify the experience available to tourists in Cuba. That idea has been kicking around for several years; we’ll see if it’s brought to fruition.