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Cuba reports record $2 billion in foreign investment deals
October 31, 2017 / 6:56 PM / in 20 days

Cuba reports record $2 billion in foreign investment deals

HAVANA (Reuters) - Cuba said on Tuesday it had attracted $2 billion in investment agreements so far this year, a record pace and an indication that deteriorating relations with the United States have not significantly dented investor interest in the country.

Former U.S. President Barack Obama’s efforts at detente stimulated international interest in doing business with Cuba, while President Donald Trump has promised to once more tighten 50-year-old sanctions.

“We have signed 30 agreements so far this year... There are another 80 negotiations in progress, of which 15 are nearly completed, and we may sign some before the end of the year,” Foreign Trade and Investment Minister Rodrigo Malmierca told an investment forum in Havana on Tuesday.

The agreements signed included 16 ventures, 11 with 100 percent foreign ownership, and 14 administrative and production agreements, he said.

Malmierca gave no further details, but other functionaries have told the state-run media they are clustered mainly in the tourism and energy sectors.

The Cuban government says it needs a minimum $2 billion in foreign investment annually to significantly grow a stagnating economy as part of a series of reforms under President Raul Castro to update its Soviet-style system.

Direct foreign investment has averaged in the hundreds of millions for more than two decades, according to Cuban economist Omar Everleny.

Cuba passed a law in March 2014 offering investors steep tax cuts and promising a climate of investment security.

Malmierca said that since 2014, projects valued at $4 billion had been approved, but it was not clear how much of the capital had actually been invested.

For example, deals for five golf resorts valued at close to $2.5 billion have been signed with British, Chinese and Spanish investors, but ground has yet to be broken on any of them, according to foreign businessmen 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 the dual monetary system with fixed exchange rates.

Raul Castro took over for his ailing and since-deceased brother Fidel in 2008 and is expected to step down in February.

Under Fidel Castro foreign investment was viewed as an unfortunate necessity in the Communist-run Caribbean island. Today it is viewed as an integral part of the country’s development plans.

Reporting by Marc Frank; Editing by Dan Grebler

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