In a move unseen since Fidel Castro’s 1959 revolution, Cuba is now inviting foreign investors to enter its domestic trade.
In the last two years, the lack of tourism, US economic sanctions and the pandemic-induced recession have pushed Cuba into one of the worst crises in decades. In Cuba, semi-empty retail stores and shortages of common necessities such as gasoline and flour have become even more frequent.
Thus, in a move unseen since Fidel Castro’s 1959 revolution, Cuba is now inviting foreign investors to enter its domestic trade—private companies from overseas will be allowed to operate fully owned local wholesale businesses or enter the market via joint ventures. Direct retail businesses will be open only to public/private ventures.
“We have not yet taken full advantage of the benefits of foreign investment in the domestic trade,” Ana Teresita Gonzalez Fraga, Cuba’s deputy foreign minister, said in August. The goal, she added, was to get more raw materials and goods to the producers and consumers. “We will promote the sale of commodities, equipment and other goods that will be used in the domestic production of final goods such as food, cleaning products and power installations.”
The measures aim at filling store shelves to mitigate public disaffection. “The growing dissatisfaction because of the long lines to get basic products, the shortage of gasoline and the constant power failures pressured the Communist Party officials to move forward with the reform of a state-run economy,” Fraga added.
In a separate measure, the Cuban government has floated the possibility of selling US dollars to private citizens again—something that has been forbidden in the last year. The ultimate goal would be to establish a currency market in the country.
Some economists say the investment incentives are too little and too vague to attract much interest from large international investors. And such investments won’t restock those empty retail shelves overnight.