Trapped in a complicated economic situation, the Cuban government invites the exiles to invest in the island. But to invest now would not only mean to accept playing second fiddle, but to ignore the moral dilemma posed by the issue.
Does Havana really believe that Cuban businessmen living abroad invest their money based on a different thinking than that of other world capitalists? Would they ─for sentimental considerations towards the place where they were born─ overlook all the uncertainty that means investing in today’s Cuba after being kicked out from their country by the same Castro family that today invites them to return? Those whose properties ─from a sugar mill to a wedding ring─ were confiscated when leaving their homeland, would they believe they have more guarantees today to invest under the same regime that previously crushed their families?
At the end of May, Rodrigo Malmierca, Cuba’s Minister of Foreign Trade and Foreign Investment, posted a comment on Twitter that, albeit brief, has been much talked about: “The Foreign Investment Law 118 does not establish any limitation regarding the origin of the capital. In this sense, citizens of Cuban origin are not limited to invest in #Cuba “, he wrote.
The invitation contrasts with what Malmierca said when the aforementioned Law was passed in March 2014,as a piece of legislation that sought to change the low levels of foreign investment, theoretically allowing Cubans who live abroad to invest in their country of origin, although not those who actually live on the island. Even so, the minister was clear: “Cuba will not seek foreign investment from Miami, the law does not forbid it, the policy does not promote it.”
Cuba’s economic growth in three of the last four years (the exception was 2015, after a thaw on relations with the United States was announced) has been less than 2 percent. Official and independent economists have warned that an annual growth of 5 to 7% is needed to surmount the crisis and achieve a level of sustainable development. The only possible leverage, considering that the communist country does not have enough savings to invest or is allowed to receive loans from the IMF or the World Bank, is a $ 2,5 billion per year Direct Foreign Investment.
In fact, Cuba’s now or never moment came under the U.S administration of Barack Obama, when scores of American businessmen traveled to the island in search of business opportunities. Even so, apparently convinced that the bonanza would last forever, Havana seemed to believe it could afford the luxury of rejecting most of the proposals and, while applying ideological criteria and delaying the procedure, it approved only a handful of insignificant projects. Asked about the selectivity and the delays, a vice minister of investments said categorically that the country was not for sale.
The government also dismissed a demand by foreign companies to directly hire their Cuban personnel, instead of relying on local employment agencies that still retain 90% of the workers’ salaries. It also sent to prison a bunch of Canadian and British businessmen, whose properties and assets were confiscated.
As a result of this misguided policy, the expected takeoff of foreign investment never occurred. In 2017 it reached just $ 500 million.
Now the communist bosses wake up from the sweet dream of the Obama period to live the nightmare of a Trump administration that has been tightening the screws in economic matters, as retaliation for Cuba’s kidnapping of Venezuela. Trump’s crackdown includes new limits on remittances; the cancellation of cruise travel and “people to people” trips, sort of American tourism in disguise; as well as new legal claims on confiscated properties, which will inevitably rein in the arrival of foreign capital.
As it happened during the crisis of the 90s, when the exiles’ dollars ─suddenly authorized to circulate on the island─ saved the game for them, the Communist leadership again resorts to those who left the country as an urgent plan B. Yes, it’s true that, as an economic adviser of Ronald Reagan’s once put it, in the feast of international investment, today’s Cuba looks like an unsavory little dish that can only attract Cuban investors. But apart from other shortcomings, the law under which the emigres are now invited to invest puts a sword between Cubans abroad and Cubans on the island. Because the latter must abstain from any investing ambition beyond owning a shoe repair shop or a small restaurant.
At the bottom of Malmierca’s tweet, an islander commented: “Let me see if I understand: if you have dollars outside Cuba, you can invest, by the grace of the Inv Ext Law? If you have them here, only self-employment. ?? I’m not sure if you can see the dilemma. Hope so”….
Sure thing. By all means. And for exiled Cubans, the dilemma is a moral one: Saving the game again for a regime that robbed or discriminated against them, and still continues to discriminate against their brothers on the island? Nice try, Mr. Malmierca.