Paperwork Slows Investments

Havana needs major investment in many sectors.
Havana needs major investment in many sectors.

HAVANA TIMES, April 15 – Despite the global financial crisis, Cuba could face a surge in tourism in the coming months and years if restrictions just lifted on Cuban-Americans to travel to Cuba is extended to the rest of US citizens.

Most experts believe an end to the US government travel ban would lead to major investment in the tourism sector to accommodate the additional visitors. However, if that’s to take place there is considerable room for improvement in the cumbersome paperwork that slows down investments.

The following is an excerpt from an IPS Economics Press Service Report that addresses some of the issues involved:

“‘Under regulations in force in Cuba, a follow-up report on an investment generally takes several months, and even years can drag on with such reporting in the island’s vital tourism industry,’ indicated Delisabel Barceló, a professor in Matanzas province.

Old buildings like old cars need considerable maintenance. Photo: Michelle Roux
Old buildings like old cars need considerable maintenance. Photo: Michelle Roux

“Such bureaucratic arrangements are often accompanied by poor scheduling, inadequate supplies, and labor shortages.

“As indicated in a report by the National Office of Statistics (ONE), of the 1,758 projects implemented last year, 281 lacked sufficient supplies and 248 experienced labor shortages. These were also affected by financial constraints and an insufficient provision of equipment, it added.

“Government officials announced in March 2008 that overall annual investments would reach six billion pesos (US $300 million); however, only 4.8 billion ($240 million) were actually expended. A similar situation was experienced in 2007, their report highlighted.

“Dr. Barceló said, of central Cuba’s Camilo Cienfuegos University, said existing regulations do not specify project stages and timeframes.  She conducted a study last year showing that the Ministry of Tourism must comply with a host of legal instruments, approvals, specifications and other formal requirements that make it very difficult to speed up the investment process and lengthens the period between project approval and contract signing. Moreover, after projects get underway, detailed monthly reports.

“‘Preparing a final investment report can take years, especially at the Varadero beach tourist development area,’ she emphasized. ‘As can be seen, bureaucratic arrangements are negatively affecting project quality, efficiency and successful completion,’ she concluded.”

To read the entire IPS Report click on: