The Cuban regime announced this Monday () that it will allow foreign investment in wholesale trade and – through mixed companies – also in retail business. The announcement is part of a package of relaxation measures to revitalize the economy, which has been suffering from a serious crisis for two years.
The first deputy minister of Foreign Trade and Foreign Investment, Ana Teresita González , assured on public television that these are “risky measures that by themselves do not solve the problems” of the country, which finds itself in a “complex scenario”.
The objective of these reforms, added González, is to achieve “greater efficiency” in the national retail trade. “We want these measures to have an immediate impact on shortages,” he said.
Foreign investors will be able to create entities to trade in the wholesale market and form mixed companies – “selectively”, as he specified – to “carry out retail trade activities”.
These new companies will focus on the sale of “raw materials, inputs, equipment and other goods” to “promote the development of national production” , as well as providing food, hygiene products and even electricity generation systems from renewable sources.
Until now, González pointed out, foreign investment was limited to production and trade was restricted to state entities on the communist island.
Furthermore, he stressed that these products will be offered in Cuban pesos (CUP) and in freely convertible currency (MLC), a controversial Cuban virtual currency based on foreign currencies that is used in a chain of stores and
For her part, the Minister of Internal Trade, Betsy Díaz, stressed that “the commercial sector also needs foreign investment”. However, she stressed that the sector has not fully opened up. Access is no longer “restrictive”, but the priority actor remains the State, he explained.
Díaz added that priority will be given to initiatives of this type of foreign investors with experience in the country and in allied nations.
González also added that some non-state entities will be able to carry out foreign trade activities, both import and export.
Restrictions will also be maintained in this area because, as stressed, the country has not “renounced the monopoly of foreign trade” nor does it intend to do so.
Import, as he detailed, will be restricted to those who have their own currency for this activity without the need for financing and can obtain “better prices for the Cuban population” than the state-owned company.
Priority goods in this area will be “inputs, raw materials and equipment”. In the field of exports, the intention is to start with the sale of computer services abroad, added González.
Cuba has been recovering part of the losses suffered during the Covid-pandemic 19, largely due to the reopening of tourism (which only took place in November last year) and the increase in the price of nickel, one of the main minerals exported by the Caribbean island.
However, difficulties persist. Last year, Cuba’s GDP grew by 2% (below the 6% projected by the government) and the estimate is that the increase will be 4% in 2022. This recovery would still not compensate for the losses during the pandemic – in 2020, there was an economic contraction of 10%.
Another problem is inflation, which exceeded 70% in 2021, mainly as a result of a monetary reform that increased wages, but caused prices to rise. In 2022, inflation has been decelerating, but it is still high: in May, the interannual rate was 26, 16%, above the 23,69% of April.