Cuba’s foreign trade and investment minister said on Wednesday the country had signed nearly 200 investment projects worth $5.5 billion since it slashed taxes and made other adjustments to its investment law in 2014.
Cuba began a major effort to attract foreign investment as socialist ally Venezuela’s economy went into crisis and has ratcheted it up as export revenues decline and the Trump administration backtracks on a detente begun under then-U.S. President Barack Obama.
“Foreign investment in Cuba is growing despite the recent strengthening of the U.S. economic, trade and financial blockade, though it is below what we want,” the minister, Rodrigo Malmierca, said at an investment forum in Havana.
Even as the forum unfolded, debate on an annual resolution condemning U.S. sanctions got under way at the U.N. General Assembly in New York and the Trump administration said that on Thursday it would announce new sanctions aimed at Cuba’s military and security services.
Malmierca said 40 new projects were signed over the last year valued at $1.5 billion.
Many agreements are in the tourism sector and are often simple management and marketing accords. Others are in manufacturing, oil exploration and, to a lesser extent, areas such as pharmaceuticals, agriculture and logistics.
Cuba says it wants a minimum $2.5 billion per year in direct foreign investment to dig its way out of years of crisis and stagnation.
While $5.5 billion in deals may have been signed since 2014, the government has said only around $500 million has actually been invested annually, including foreign government credits and donations.
Diplomats and business officials report that many projects are hard pressed to obtain financing and the Communist-run country’s bureaucracy also slows deals from getting off the ground.
For example, since 2014 five golf resorts valued at close to $2.5 billion were signed with British, Chinese and Spanish investors, but ground has yet to be broken on any of them, according to foreign business officials and diplomats with knowledge of the projects.
Malmierca said the country was working to overcome numerous obstacles for investors, such as lengthy delays for project approval, lack of experience among Cuban negotiators and Cuba’s dual monetary system with fixed exchange rates.
Under then-leader Fidel Castro, foreign investment was first nationalized, then, after the fall of former benefactor the Soviet Union it was viewed as an unfortunate necessity. Today it is lauded as an integral part of the country’s development strategy.