UPDATE 2-U.S. Chamber of Commerce chief urges Cuba to extend reforms
(Adds meeting with Raul Castro, paragraph 4)
HAVANA May 29 (Reuters) - The head of the U.S. Chamber of Commerce on Thursday urged Cuba to speed up and extend market-style economic reforms, saying world investors would respond and that it might be the best path toward better relations with the United States.
Chamber President Thomas Donohue extolled the virtues of capitalism and free markets in the communist-ruled country, once taboo subjects here, and told Cubans that reducing excessive government control of the economy was the best assurance of prosperity.
"The more Cuba can do to demonstrate its commitment to reform, and the more it can do to address and resolve disputes in our relations, the better the prospects will be for changes in U.S. policy," Donohue said in a speech before Foreign Investment Minister Rodrigo Malmierca, a host of other Cuban officials and university students.
Donohue also met with Cuban President Raul Castro, state television said, without reporting details of their conversation. It was a late addition to Donohue's agenda before departing for the United States at the end of a three-day visit.
Donohue, an influential voice in U.S. politics, led a delegation including representatives of commodities giant Cargill and direct-selling pioneer Amway on a trip that drew protests from supporters of the U.S. economic embargo back in Washington.
The chamber has long opposed the embargo as harmful to U.S. business interests; the embargo remains a pillar of the strong Cuban exile lobby that supports maintaining Cold War-era punitive sanctions.
Since taking over as president for his ailing brother Fidel in 2008, Castro has ushered in reforms that have allowed nearly 500,000 small private businesses to operate and hundreds of thousands of private farmers to grow food on their own land.
Cuba is also seeking badly needed foreign investment with a new law it hopes will attract $2 billion to $2.5 billion a year in foreign direct investment, an estimated 10-fold increase from current levels, which it does not report.
Donohue praised those reforms, but he said Cuba had more to do and cited China and Vietnam as examples where communist countries have raised living standards by turning toward more market-oriented policies.
"We hope these changes continue and urge that they be expanded. Businesses throughout the global economy will respond," Donohue said.
He cited the protection of intellectual property rights and the lack of an independent arbitration system for business disputes as areas where Cuba must improve to attract foreign investment.
"I believe that Cuba ... has the potential to develop as a very good investment," Donohue said.
When asked in a question-and-answer session how much of his own money he would invest, Donohue said, "It depends on what I could buy.
"There are some pretty good deals here, you know. There's some great real estate on the waterfront," he said. "I'm not going any further than that." (Reporting by Daniel Trotta; Editing by G Crosse and Leslie Adler)