Cuba: Foreign Investment Reform

By Roberto Veiga González (Progreso Weekly)

progresoHAVANA TIMES – In July 2012, the government announced that it was working to update the current Law on Foreign Investments. At the time, it said that the proposed bill would be ready before year’s end.

We have waited with a mixture of patience and impatience, because this is a “hot” topic, a pressing issue. However, we’re ending the first half of 2013 and may have to continue to wait.

Foreign investment has some negative facets, but also others that may be positive. Nevertheless, I must first point something out. The new legal rules that will guide foreign investments in our country are being drafted in secret – with the same secrecy that President Raúl Castro has criticized.

Cuban society should have been systematically informed – and in detail – about the work being done on this subject. I’ll go further: when designing a new policy on such a sensitive subject, the people’s voice must be heard.

I know that the Powers That Be take into account the people’s opinions, but what’s needed is to institutionalize mechanisms so the entire nation – labor, education and neighbor collectives, teams of intellectuals, social sectors, groups with similar criteria, and others – may dialogue about the issue and co-participate more directly in the design of the new policies and new laws.

This would reinforce our democratic elements and foster the exercise of citizen sovereignty. It is a challenge that must be met during the next constitutional reform, already announced.

The delay in the enactment of this new law is troubling, because the country’s economic situation, and thereby the life of the ordinary Cuban, suffers from many limitations. We are heading toward an economic strategy and new models of ownership and procedures that are designed to pull us out of the crisis. Nevertheless, many factors rob this process of the necessary agility and integrality.

To move toward development, it is essential that we inject ourselves into the economic mechanisms that exist in the world we live in. We must redefine – more radically than ever – the models of ownership and procedure, something we do very slowly because of a mixture of prejudices and insufficiencies in our economic and administrative culture.

We must also broaden the possibilities for the importation of much money, much experience, abundant technology, etc.

Without this, everything else might fail. And this is where an updating of the foreign-investments law can play an important role. For that reason, its enactment becomes urgent, as well as a broad and intense effort to take best advantage from the law.

This is a hot issue that requires study because, even though we should speed up the people’s immediate well-being, that well-being requires that we don’t turn this country into a nest of vultures that corrode even further our society’s honesty and sovereignty. This is an important aspect, and it may have delayed – from a positive point of view – the drafting of the bill.

However, we must make sure that this danger does not delay and limit our inter-relations with the rest of the world, from whence comes the foreign investment this country needs. We must make sure that the defense of probity and sovereignty does not paralyze our progress.

Likewise, we must remain alert so that, while designing a way to safeguard those two pillars, we don’t establish mechanisms that are based on grotesque prejudices and lack of economic and political culture, thus hampering our own steps. What’s needed is to build public management on a platform of wisdom and boldness.

I understand that this will always be difficult, especially in the context of Cuba, suffused and surrounded by some dishonesty and mistrust. For that reason, all honest persons must contribute to consolidate and accelerate the right course.

Many Cubans trust that these qualities will prevail and the reform will promote rectitude in the nation’s economic performance and sovereignty. But they also want the reform to promote the collective well-being hoped for by many Cubans, revolutionaries or not, as well as the individual prosperity of those who labor in the enterprises generated by the new law.

In that sense, I hope that those workers will be remunerated directly, in sufficient amounts and with money that has real value.

I also hope that, in those enterprises, the labor union is taught to behave more fittingly in the framework of new and necessary economic and labor relations. Large and small investments should be enabled, because all of them are worthwhile and contributive. The approval and establishment of the new enterprises should be speeded up and decentralized, and devices should be created to prevent and combat corruption. The way to design, approve, execute and control the socialization of the wealth these investments might bring into the country should be increasingly democratized.

These are some of the hopes that I’ve heard from the people around me.

Cuba is taking positive steps that are taking us to a better future. We must find the way to do this with greater participation and from a broader consensus. This way, the changes will be better conceived, will enjoy greater legitimacy, involve more citizens in the commitment to consolidate them. This way, we’ll reach the desired well-being sooner.


One thought on “Cuba: Foreign Investment Reform

  • May 28, 2013 at 9:27 am
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    The reasons behind the delay in announcing the new regulations regarding foreign investment in Cuba are obvious. Beyond the standard operating procedure of secrecy in public policymaking, the Castros are reluctant to loosen investment parameters until there is some confirmation of the stability of their Venezuelan nursemaid. As a beggar state, Cuba is weighing in the balance how much autonomy much be extended to foreign investors against the desperate circumstances they are facing should their Venezuelan subsidies be reduced or even eliminated. Keep in mind that these issues are not new nor are they intended to improve the quality of life for all Cubans. The primary goal of seeking foreign capital is how it best serves keeping the regime in power. As soon as Fidel was able to substitute cheap Chavez oil for the hard currency generated by Cubans running small businesses in the early 2000’s, he closed those small businesses that Cubans had started and consolidated his power with Venezuelan largesse. The promised reforms to foreign investment will be inversely related to the confidence Raul has that his puppet Maduro will continue to send super cheap oil to Cuba.

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