Cuba attracts $1.9bn in foreign investment despite US sanctions

The Caribbean island nation aims to attract $2bn to $2.5bn annually to update its state-run economy.

Cuba's trade minister said the attraction of foreign investment was no small feat given United States President Donald Trump's 'economic war' against the Communist nation [File: Pablo Martinez Monsivais/AP Photo]

Cash-strapped Cuba said on Tuesday that it had attracted $1.9bn worth of foreign investment over the past year despite tighter United States sanctions.

Trade Minister Rodrigo Malmierca told an online news conference that Cuba continues to reduce internal obstacles to investors, adding that the 34 investments approved on the island since October 2019 were no small feat given the “economic war” being waged by the administration of outgoing United States President Donald Trump.

These have included sanctions on Venezuelan shipments of oil to Communist-led Cuba, ever-tighter restrictions on US travel to the Caribbean island and limits on remittances, one of its top sources of hard currency. Washington’s tougher stance has also led international banks to avoid transactions involving Cuba.

On top of that, the coronavirus pandemic this year disrupted tourism and prompted Cuba to implement a partial lockdown.

“All this has created a lot of restrictions in hard currency supply, delays in payments to providers and companies that have relations with Cuba,” Malmierca said during the virtual event that was held this year and that replaced the country’s annual trade and investment fair due to the pandemic.

The amount of foreign capital attracted was slightly more than last year’s $1.7bn, Malmierca said, calling it an accomplishment given the circumstances but still below Cuba’s needs. The country aims to attract $2bn to $2.5bn annually to update its state-run economy.

Malmierca said Cuba further reduced obstacles to foreign investment. Now, for example, only projects regarding the extraction of natural resources and public services would require a majority-Cuban stakeholder.

Other upcoming market-oriented reforms Cuba has announced this year should facilitate investment, too, he said, citing the imminent elimination of the country’s dual currency system that has created distortions in the economy.

Malmierca said this year’s portfolio of ready-made investment opportunities included smaller projects that could interest small and medium-sized enterprises and Cubans living abroad, as well as larger endeavours.

Source: Reuters