Cuba to Allow Some Foreign Investment in Wholesale, Retail
Facts
- On Mon., Cuba announced plans to allow foreign investors to fully own local wholesalers or enter the market through joint ventures for the first time since the 1959 revolution led by Fidel Castro.
- Deputy Trade Minister Ana Teresita Gonzalez said that retail would be more restricted, but that foreign investment would be "selectively" allowed in that sector as well, provided the investment contributed to the country's socialist goals and lowered prices.
- Analysts, however, reportedly expressed doubts that the economic measures would lead to more raw materials and goods reaching producers and consumers in Cuba.
- The gradual reforms come as Cuba faces its worst economic crisis in decades, with public discontent and repeated protests over rising costs of living and shortages of food and medicine.
- In Aug. last year, Cuba allowed small and medium enterprises to begin operating on the island. Months earlier, in a first for the government, private entrepreneurship was authorized, but only for individual entrepreneurs, not for companies.
- The Biden admin. agreed to ease Trump-era sanctions on Cuba in May. The US approved new measures, including fewer restrictions on travel, and increased remittances US residents could send back to their families in Cuba.
Sources: NBC, Reuters, Euro, BBC News, and Dw.
Narratives
- Narrative A, as provided by Bangkok Post. This latest announcement, along with other reforms that Cuba is undertaking, represents a major ideological shift in a country where the government has monopolized the economy for years. Allowing foreign investment in wholesale and retail trade will boost the local industry at a time of severe shortages in basic goods. This is the right decision.
- Narrative B, as provided by State Craft. Allowing "selective" foreign investments in wholesale and retail trade is too little, too late, and won't actually adjust the country's state-led economic model. The limitations and regulations that accompany the latest announcement mean that overseas investments will remain under state regulation, and will likely have little impact on the ailing economy.