Mariel, the Cuban Hong Kong That Never Became One

The Mariel Special Development Zone.

14ymedio bigger14ymedio, Mario Penton, Miami, 14 June 2018 — In 2014, Raúl Castro, who promoted the deepest economic reforms since the establishment of the socialist system in Cuba, surrounded by his allies Dilma Rousseff, Evo Morales and Nicolás Maduro, promoted the largest project of his mandate, the creation of a Special Development Zone in the Port of Mariel.

Four years and a Brazilian investment of more than one billion dollars later, the zone that promised to turn Cuba into the Caribbean Hong Kong languishes, waiting for investors, according to Emilio Morales, director of Havana Consulting Group.

«The idea of developing a special zone in the Port of Mariel is good; the problem has been in the management, and (thanks to the thaw with the United States) no Latin American country has had in just two years the number of entrepreneurs, presidents and delegations that have visited Cuba, but they did not know how to take advantage of it,» Morales said in a telephone conversation with 14ymedio.

Mariel was built at a time when the diplomatic thaw with the United States allowed one to foresee the end of the embargo. The most modern port in the Caribbean could accommodate the huge Super-Panamax ships for which the port’s entrance channel was dredged to a 60 foot depth and a modern container terminal was built.

The resistance of the Republicans in the US Congress against lifting the sanctions, the arrival of Donald Trump to the White House and the decline in trade with Caracas, which according to most experts subsidized the battered economy of the island, undid Raúl Castro’s star project.

The Cuban economy, rigidly controlled from the highest power, remains inefficient. The management of the businesses in the Mariel Special Development Zone (ZEDM) is under the control of State officials. «Private enterprise is essential for the future development of Cuba and Mariel. But because the only owner is the State, nobody pays for a wrong decision, the money is not theirs, nor the risk, therefore, it remains something abstract, which is called the State,» adds Morales.

At the end of March there were only 35 approved companies (five of them Cuban), of which 10 were in operation and 25 in the process of investment. The official newspaper Granma reported that so far the ZEDM has captured 1.191 billion dollars, only 9.5% of the 12.5 billion dollars that had been planned, at a rate of 2.5 billion per year.

The causes of the poor performance of the industrial zone that promised to accelerate the national economy have to be looked for in «an excessive bureaucracy, a complicated decision-making process that delays the follow-up of the investment offers from foreign companies, and delays in the completion of the infrastructure,» Morales highlighted in an article recently published in Martí Noticias.

The government itself acknowledged in March that the ZEDM is not going «as fast» as the country needs. President Miguel Díaz-Canel, this week, reviewed the program of foreign investments and exports together with a group of ministers and officials of the sector.

«We must make things more feasible, more viable, less cumbersome,» the president said in relation to the obstacles that delay the investment process. Díaz-Canel later expressed his bewilderment about the slowness with which decisions made in the Council of Ministers or in the National Assembly are applied to the project.

The Mariel works were financed by the Brazilian State, at that time governed by the Workers’ Party, an ally of Havana. The multi-million dollar contract was awarded to Odebrecht, the same company whose bribery practices to secure public contracts shook the foundations of many corrupt governments in Latin America. In Cuba, no investigation related to the multinational has been opened to date.

To Emilio Morales, much of Mariel’s failure can be seen in the small number of jobs it has achieved. «This state project has only created 4,888 jobs, compared to more than 570,000 that were generated by the granting of licenses to small private companies,» (cuentapropismo, or self-employment), he says, justifying his idea of opening up opportunities in the ZEDM to the private sector within the Island.

«It’s not possible that they would create a special economic zone in Mariel and leave out the Cubans themselves, without any chance of investing in it. National entrepreneurs should be privileged first, and then the foreigners,» he emphasizes.

The US company Cleber LLC, the first company with 100% North American capital that was going to be in Mariel, ended up being rejected by the Cuban government. The project of the Cuban-American businessman Saul Berenthal and his partner Horace Clemmons sought to assemble Oggún tractors, designed for small farmers to make the land more productive.

«Mariel had several prospects: first to process oil from the northern part of Cuba, to create industrial parks with import facilities and repatriate capital. In addition, Cuba’s geographical position places it at the center of major routes, which could facilitate the establishment of a free trade zone,» says Morales. All these opportunities are still present, but the weight of the State chokes them.

The Mariel Special Development Zone was inaugurated during the 2nd CELAC Summit in 2014, an international organization promoted from the socialist Venezuela of Hugo Chávez, excluding the United States and Canada. Four years later, the CELAC is being dismembered, Chávez has died, Venezuela is plunged into an unprecedented crisis and most of the governments of the region (including the Brazilian) have changed their ideological sign.

«Political decisions cannot continue to govern the Cuban economy because the market has its own rules: the State must — as the Vietnamese advised — liberate the productive forces of the nation and not want to absorb everything,» Morales says.

Video: Raul Castro during the opening of the Mariel Special Development Zone. Not subtitled.

_______________________

The 14ymedio team is committed to serious journalism that reflects the reality of deep Cuba. Thank you for joining us on this long road. We invite you to continue supporting us, but this time by becoming a member of 14ymedio. Together we can continue to transform journalism in Cuba.