More Dirt on Cuba’s Foreign Investment Law

Eddy Carbajal Rodríguez*

Nestle is one of the foreign companies that has received special near monopoly status in Cuba.
Nestle is one of the foreign companies that has received special near monopoly status in Cuba.

HAVANA TIMES — In Cuba, the deciding factor when it comes to capitalists seems to be whether they are Cuban or foreign. The new Foreign Investment Law authorizes private capital in the form of joint-venture or wholly foreign companies.

That is to say, totally private companies will begin to exist in Cuba, but that doesn’t matter, because the owner and boss is a foreigner and the country needs their dollars to fill the State’s coffers, the same ones it has managed so poorly over the past 50 years, squandering and misusing the resources are poorly-paid workers have modestly created.

The socialism allegedly being built in Cuba will continue to be called socialism, even though these companies will be privately owned, in whole or in part, by a small group of people. We will continue to be socialists because that small group of people is made up of foreigners and not Cubans.

We’re heading down the right path, the path traced by a developed China that has a Human Development Index below ours, a China with phenomenal levels of corruption and government leaders who are millionaires (Chinese members of parliament have amassed fortunes greater than all of the wealth of the US Senate). We should not forget that economic growth is not synonymous with social growth.

Che and workers. Photo: Juan Suarez

I am not against foreign investment, not in the least. To oppose such investment would be to oppose the development of local businesses. But such foreign investment should not be controlled and assessed exclusively by a State commission that is entirely removed from the direct interests of the employees of Cuban companies.

Foreign or domestic investment should only be controlled and managed by company employees themselves. They, as a whole, are the only ones that should be able to decide how investments are to be made. It would be difficult to imagine these employees being happy about a foreign boss taking 50 percent or more of the company’s profits at the end of the fiscal year.

This is how the State is betting on private capital. Not even cooperatives (true forms of socialist management) have been given the benefits granted to private foreign capital. Cooperatives are even subject to the trial-and-error method.

It seems it’s ok to experiment with common Cubans. If things don’t work out, then that’s that. But one can’t play such games with private capitalists, they’re truly indispensible.

We will never have true socialism while a handful of people decide the fate of everyone else, while the few who have entrenched themselves within the Party-State-Government-Army are the ones who dictate what socialism is and isn’t, taking upon themselves the right to define what counts as socialism and having others reproduce it. While this is true, we will never have socialism.

The Mariel port and Special Economic Zone will be two of the major employers of Cuban labor working for foreign capital.
The Mariel port and Special Economic Zone will be two of the major employers of Cuban labor working for foreign capital.

We will never have socialism while we still have a wage system, a form of exploitation acknowledged many years ago. It doesn’t matter who the exploiter is, whether they are capitalists (foreign and not) or a State institution.

The three ways in which foreign investment is being introduced in Cuba are not new – they had even been recognized by the previous law. The novel thing now are the incentives offered investors (what could a country devoid of resources of any kind have to offer other than labor?)

One need not be an economist to figure it out: one the one hand, we have tax incentives and, on the other, a cheap workforce. Anyone who knows what it is to have a salary of 15 or 30 Cuban Convertible Pesos a month will not think twice to run after jobs that pay anything more, be it fifty, a hundred or a thousand dollars more. It doesn’t matter what currency wages are paid in, that’s trivial.

What’s more, the exploitation is double: on the one hand, we have the foreign capitalist and, on the other, the State employment agency. The latter, tasked with protecting the interests of workers (as the official discourse claims), obtains commissions on the basis of the workers it supplies foreign capital with.

Foreign capital will come to Cuba smilingly, ready to hand out crumbs. Part of these crumbs will be taken by the State and we will also smile and be happy with the crumbs that are left for us, because, when all is said and done, it’s more crumbs than what we have now.
—–
(*) Industrial engineer.

9 thoughts on “More Dirt on Cuba’s Foreign Investment Law

  • “Foreign or domestic investment should only be controlled and managed by company employees themselves. They, as a whole, are the only ones that should be able to decide how investments are to be made. It would be difficult to imagine these employees being happy about a foreign boss taking 50 percent or more of the company’s profits at the end of the fiscal year.”
    When I read this the first thing that came to mind was that the author has absolutely no idea how capitalism works. If I jump through all the hoops, put up all the start up money, organize the business and do everything I need to do to start a business in ANY country, my employees will have no say in how I run MY company or the decisions I make in order to develop it’s success.
    As employees they enter an agreement with the employer which basically states “you do this for an hour/day/week and I will pay you this much”, period. What the employer does with the profits is absolutely no business of the employees nor anyone else, and they certainly will not be split at the end of the fiscal year. Profits are split among partners, partners who share in the financial risks, the administrative work and the intellectual property that is the conception and design of the company in the 1st place.
    This is how people acquire wealth, this is capitalism. If I have to share my profits what incentive do I have to take the risks and do the work required to get the company up and running? What has an employee done to earn more than the wage they agreed to work for that they should be handed a share of the profits?
    If someone is paid what they agreed to work for how is that exploitation unless the employee is being forced to work there against their will?

  • You are funny, I was not implying anything. The question has an obvious answer that given a choice anyone would prefer bigger salary regardless of exploitation. But it would not stop that person from complaining about exploitation.

  • Cuban workers have no right to strike, no right to collective bargaining and must belong to a union run by their employer, the government. If they want to go work somewhere else, they have to ask the government for permission. For this they get a salary of $20 per month.

    In Canada, I belong to an independent trade union which uses its strength, and the threat to strike, to collectively bargain for higher wages and better working conditions. If I decide I want to go work somewhere else, I can leave my job and do so without asking anybody for permission. Oh, and I make much more than $20 per hour.

    Canadians enjoy a free* universal healthcare system, free* and public education. We also have the full rights and freedoms guaranteed by our Constitution: freedom of speech, freedom of association, freedom of assembly, freedom of religion, the right to due process before the law, the right to privacy and so on.

    So you tell me who is “exploited”?

    I suppose Yasiel Puig is now being exploited by the LA Dodgers who pay him $2 million per year. I bet he wishes he was back in Cienfuegos, not being exploited playing for $17 per month!

    (*free to users, but we pay for it through our taxes. In Cuba the so-called “free” healthcare & education is paid by the effective 95% tax rate on every worker.

  • You are presenting a false dichotomy. Given the same job, under the same conditions, there is a good chance the $10 worker is the exploited one. A well-paid porno star may well be exploited but given the high salary accepts the exploitation as a necessary evil. Basically, if you are trying to imply that poorly paid Cubans are somehow better off, you obviously don’t know any poorly paid Cubans. They don’t believe they are better off because of some bullsh*t speech Fidel gave years ago about being a ‘revolutionary’ worker. Workers in Cuba, like you, want to be paid a living wage. Save the speeches.

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