Foreign investment projects in Cuba down: official

HAVANA, July 9 (Reuters) - Expectations that Cuba’s new President Raul Castro would open up the country to more foreign investors have yet to materialize, according to testimony before a parliament commission published on Wednesday.

The Communist Party newspaper Granma reported there were less investment projects than when Raul Castro provisionally took over the government in July 2006 for ailing brother Fidel Castro.

Granma, quoting testimony by a senior investment official, reported state companies are involved in 234 joint ventures and 12 cooperative production agreements, involving about 2 percent of the work force.

At the close of 2005, the government reported there were 258 joint ventures and 115 cooperative production agreements.

In July 2007 Castro called for more foreign investment, especially in agriculture, but to date the only new agreements signed and announced have been with Venezuela or risk contracts to explore for oil in Cuba’s Gulf of Mexico waters.

Cuba has formed 24 new ventures with Venezuela, which under socialist President Hugo Chavez, has become Cuba’s close ally and major benefactor.

Officials say that despite fewer investors, direct investment has increased, as have venture revenues and profits.

Foreign Investment Minister Martha Lomas told Reuters earlier this year Cuba remained interested in any offer that dovetailed with its development plans, but only major players need apply.

The Cuban state controls more than 90 percent of economic activity and usually retains more than 50 percent control over joint ventures.

Cooperative production agreements generally involve a foreign investor supplying machinery, credits and supplies in exchange for a percentage of profit or product.

One of the longest standing ventures, involving Belgian beer giant InBev NV INTB.BR, has been the subject of controversy in its attempt to take over U.S. firm Anheuser-Busch Cos Inc BUD.N.

U.S. law forbids companies from investing in Cuba, though foreign firms with less than 50 percent of their operations in Cuba, may control U.S. firms. (Additional reporting by Nelson Acosta; editing by Jeff Franks and Anthony Boadle)