By IANS
Thursday July 5, 07:02 PM
Havana, July 5 (IANS) Cuba is considering bolstering the participation
of foreign investors in sectors crucial to the island's economic
development.
Members of the expatriate Cuban business community told Spanish news
agency EFE Wednesday, that the Cuban government would seek to increase
foreign investment selectively and in industries that can contribute to
economic growth and reduce the country's excessive dependence on imports.
Those 'strategic' areas include tourism, oil and mining and
construction, the sources said.
In recent months, the island's Communist government has instructed its
economists to prepare reports on activities that can be developed with
the help of foreign investment, the business leaders said.
Cuba 'has looked closely after its relations with Venezuela and
neglected its relations with other countries and now it seems it wants
to recover them, diversify its risks and, at the same time, increase its
liquidity,' said a European business leader who spoke on condition of
anonymity.
Foreign participation in Cuban companies and associations was authorized
in the 1990s following the collapse of the Soviet Union and the end of
Moscow's generous subsidies to Havana.
The renewed focus on foreign investment by the government, headed for
almost a year by Raul Castro, coincides with a drop in tourism of almost
15 percent - according to unofficial estimates - and a significant fall
in the international price of nickel, a key export.
Since assuming power provisionally upon the illness of older brother
Fidel, Raul Castro has shown signs he wants to resolve the serious
problems affecting the island's public transport, farming and housing
sectors.
During a session of parliament last week, Foreign Investment Minister
Marta Lomas announced a record inflow of US$981 million in 2006, 22
percent more than the previous year. But the increase in foreign
investment is not sufficient to compensate for the island's dependence
on imports, economists say.
The latest available official data, corresponding to 2005, indicates
that Cuba's imports totalled US$7.3 billion compared to US$2 billion in
merchandise exports.
To cover those import costs, the island counts on close to US$2 billion
from nickel exports, a similar amount in tourism revenues and the
approximately US$2.5 billion that - according to unofficial estimates -
the country earns for medical services rendered by Cuban doctors abroad.
Oil-rich Venezuela, Havana's main economic partner and political ally,
supplies the island with about 100,000 barrels per day of crude in
exchange for medical and educational services.
Trade between the two countries surpassed US$2.6 billion last year, well
ahead of the US$1.8 billion worth of business Cuba did with China,
Havana's No. 2 trading partner.
A potential obstacle to any effort at boosting foreign participation in
the Cuban economy is Washington's 45-year-old economic embargo against
the island.
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