Tuesday, April 1, 2014

Malmierca on the new investment law

The text of Cuba’s newly approved foreign investment law will come out in due course, and according to this presentation by trade and investment minister Rodrigo Malmierca, the new policy will also be defined by regulations and norms to be issued by at least four parts of the Cuban government.

The first principle he stated regarding the new policy is that foreign investment is viewed now “as a source of development for the country in the short, medium, and long term.”  That may seem obvious, but it’s a change from the old, more narrow formulation of foreign investment as a “complement” to Cuban production.  Everything else flows from that, beginning with the broader list of specific goals that foreign capital is to serve – instead of “capital, markets, and technology,” it now includes job generation, acquisition of new management methods, and more.  In two years, if a substantial number of new investment projects are operating in Cuba, that change of thinking will be responsible.

Other points of note:

If you’re curious as to whether the priority on renewable energy means that the taboo on cane-based ethanol has been cast aside, there’s not a clear answer.  He refers to the use of “biomass, which includes that of sugar cane” but it’s not clear whether he means cane itself or bagasse, the waste product of sugar milling.

He notes that cooperatives will be able to participate in foreign investment projects but with the participation of a state enterprise; details here.

Contracting of employees will continue to occur through state employment agencies, with salaries negotiated between the foreign partner and the agency.

He, like others, refers to “errors” of past policies on investment but doesn’t say what they were. 

Sugar and agriculture, two high-potential sectors where Cuba has shown low interest in foreign participation in the past, are on the list of priorities where sector-specific policies have been defined.

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