Cuba Focuses on Foreign Investment for Socio-Economic Strategy

# Boosting Foreign Investment: Cuba’s Social and Economic Strategy

As the largest of the Caribbean islands, Cuba has officially made foreign investment a key priority within its social and economic strategy. Facing economic challenges, the island nation is seeking capital infusion from abroad as a fundamental part of its national development projections going up to 2030. With industrial capabilities and a vision for a thriving future, Cuba is keen on attracting foreign businesses and investors to contribute to its various sectors including tourism, food production, and energy.

## The Role of Foreign Investment in Cuba

The Current Economic Climate and Foreign Investments

Carlos Luis Jorge Méndez, the Director-General of Foreign Investment at the Ministry of Foreign Trade and Investment (Mincex), has highlighted the complexities of the current economic environment in Cuba. The tough economic situation impacts foreign currency earnings and hampers the operation of foreign businesses within the territory. Given these conditions, the country’s strategy includes market diversification, technology access, effective import substitution, external financing, new employment opportunities, management methods, and businesses that can also influence the national energy mix.

Cuba’s Strategy and Progress

To date, Mincex has approved 30 new business ventures, including 10 in tourism and six in food production. It reflects the broader strategy to integrate foreign direct investment (FDI) across various sectors. Additionally, 45 financing projects are reportedly in advanced negotiation stages, representing a significant $9 billion. Currently, there are 334 foreign investment businesses operating in the country, with 52 in the Special Development Zone of Mariel in Artemisa province, bolstering sectors like tourism, energy, and food services.

## China’s Growing Presence in Cuban Markets

China’s Participation in FIHAV 2023

Chinese companies marked their presence with a 70% increase in participation at the FIHAV 2023 compared to the previous year. Notably, Leke Holding Group showcased a broad range of products, including hygiene items, electric vehicles, batteries, solar panels, office supplies, and printing materials. Ajui Xiu, the founder and majority partner, celebrated the one-year anniversary of their online platform NIHAO 53, which caters significantly to private workers and SMEs in Cuba.

Leke Holding Group also signed new contracts with local companies, including a food-related agreement with Tiendas Caribe and a commercial partnership with Impexport. Additionally, they established a link with the cultural project La Manigua to promote Cuban culture, demonstrating their commitment not only to commerce but also to local identity and heritage.

Jinpeng and Electric Tricycles

Jinpeng, another Chinese enterprise known for its ubiquitous electric tricycles in China, has established a presence in Cuba through contracts with import companies as an answer to the island’s fuel shortage.

## Russia’s Collaborative Solutions with Cuba

Forging Economic Ties with Russia

Tatiana N. Mashkova, the Vice-President of the Russia-Cuba Business Council, confirmed the continuous involvement and upcoming participation of Russian entrepreneurs at the 40th edition of FIHAV in 2024. A strong Russian presence was noted with 24 companies from varied sectors such as chemical, machinery, logistics, and energy industries exploring the possibility of setting up local offices or engaging in negotiations with Cuba’s Chamber of Commerce.

Russia’s Plans and Expectations

Mashkova emphasized the mutual pursuit of joint solutions amid sanctions faced by both nations. Her primary focus area for collaboration includes creating mixed operational entities which offer promising benefits to both parties. Furthermore, she expressed Russia’s interests in furnishing Cuba with advanced technologies, particularly in food products, machinery for the oil sector, and railroad equipment manufacturing.

# Cuba’s International Trade and Investment Outlook

The 39th edition of FIHAV brings together about 20 official delegations headed by high-ranking officials from various countries, enhancing Cuba’s international connections and opportunities. As Cuba continues to forge partnerships and strengthen its economic landscape, it is clear that foreign investment will play a crucial role in shaping the future of this vibrant island nation.

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As published by Sputnik Mundo, this condensed account highlights the transformative power of foreign direct investment in Cuba’s evolving social and economic environment. With strategic alignments and cultural sensibilities at the forefront, Cuba beckons a future where collaborative economic efforts foster a mutually beneficial growth for investors and the nation alike.

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