Warning to Investors (2) / Miriam Celaya

Foreign Investment
Foreign Investment

HAVANA, Cuba, November, 2013, www.cubanet.org.- The present and the immediate future does not look very encouraging for the Cuban government. The socio-political and economic instability in Venezuela after 14 years of populism, the death of the partner leader and the arrival to power in that country of a president of proven ineptitude, signal a dramatic conclusion to the romance between Caracas and Havana. In fact, oil subsidies have declined because of the economic crisis in the South American nation, and collaborative programs with Cuba have also suffered significant cuts.

Castro II has failed at his attempt to implement economic reforms without the slightest change in the political system and without surrendering one iota of power and control. In fact, he has strengthened the ruling military class by granting it extraordinary economic powers, and by placing his most senior, loyally proven members on the forefront of all strategic development sectors.

The regime’s great deficiency, however, is the capital to finance a sustainable dictatorship, so that the ace up the sleeve of the General-President is to once more attract foreign investments. Hence the ZEDM and new legislation to “legalize” the satchels of capitalism in a system that declares itself as Marxist, to have unsuspecting investors feel a mirage of legal safety.

Legality and transparency

But, what kinds of guarantees could investments hold in a country that not only has repeatedly seized property and finances, but whose government also dictates and repeals laws and is, at the same time, partner in the investment, judge, and a piece of the business? Thus, what today is allowed could be eliminated whenever the government decides, according to its own interests and in the interest of international situations, whether or not they are favorable to the regime.

And when it comes to legality and transparency, potential investors should consider that conducting business in Cuba today also implies the violation of relevant international laws that condemn the working conditions of Cuban workers in those companies.

On the other hand, in an authoritarian system, and in the absence of rights for Cubans, investments are not only an important financial risk and a moral commitment to a military dictatorship, but reflect deep contempt toward Cubans and the genuine hope for change of large sectors of Cubans of all shores, who remain excluded from both, participation and the economic benefits of such investments, even though the émigrés capital supports Cuban families and yields permanent revenue to the government’s coffers, a factor that should be considered by foreign entrepreneurs seeking a long and prosperous stay on the Island.

Translated by Norma Whiting
Cubanet, 25 November 2013