Cuba Establishes Special Exchange Rate for Mariel Employees

Café Fuerte

HAVANA TIMES — Workers employed at Cuba’s Mariel Special Development Zone (ZEDM) will be paid 80 percent of the salaries agreed to under their contracts between the Cuban government’s employment agencies and the investors. The payments are to be made in Cuban pesos (CUP), under an extraordinary exchange rate of 10 CUP to 1 Cuban Convertible Peso (or CUC).

According to Ana Teresa Igarza, Director General of the ZEDM Regulations Office, the measure will be in place until the advent of the monetary re-unification planned by the government as part of the reforms set in motion by Raul Castro in 2008.

Igarza argued that this decision “constitutes an incentive for workers and investors.”

The salaries agreed to by the investors and employment agencies will be quoted in CUC but paid in CUP. No set rate for the hiring of personnel shall be established and incomes shall be decided on the basis of negotiations between investors and the employment entity.

Monetary Unification

The current official CUC – CUP exchange rate is 1 to 24, but a special rate of 1 to 10 will operate within the ZEDM, a clear privileging of Zone employees in anticipation of the monetary unification process that should be implemented in the country this year.

A salary of 1,000 CUC a month, for instance, would be paid as 8,000 CUP, following the 20 percent cut that goes to the employment agency.

According to Igarza, who responded to the concerns expressed by foreign entrepreneurs who attended the 10^th International Construction Work Fair recently held in Havana, the official exchange rate for the Mariel Development Zone will be published in Cuba’s Official Gazette soon.

Un pastel para todos

On tackling the details of Cuba’s new Foreign Investment Law, Igarza insisted that the intermediary employment agencies do not aim to make profits and thus constitute an incentive for investors, who pay less, and for employees, who receive larger salaries.

Igarza explaied that, to arrive at this decision, authorities considered the value of Cuba’s workforce, where more than 70 percent of the economically active population has mid-level schooling.

Cuba’s Foreign Investment Law was approved by Parliament this past March 29 and comes into effect 90 days following its publication in the Official Gazette on Wednesday in Spanish.

The Cuban government announced that 15 investment projects are already planned for the Mariel Zone, with investors from Spain, Russia, Italy, China and Brazil. These projects could be operational as early as the second half of the year.