Informacion economica sobre Cuba

Want to invest in Cuba? Learn how to wait
Published: Tuesday, 16 Jul 2013 | 7:00 AM ET
By: Michelle Caruso-Cabrera | CNBC Chief International Correspondent

Spend just five minutes in Cuba, and it’s obvious the country would
benefit from investment. But a large chunk of that money will have to
come from overseas—and it’s still not clear when or if the Cuban
government will allow it on a meaningful scale.

The buildings, the roads, the power grid, the water system—all need
updating after decades of neglect under a socialist regime. After CNBC
spent a week in Cuba meeting with the leaders overseeing economic
reforms, it’s unclear whether authorities are ready to make the changes
necessary to become attractive to investors on a large scale.

In a rare appearance before foreign journalists, Vice President Marino
Murillo Jorge, the leader in charge of the reform process, said almost
begrudgingly, “We will have to live with foreign investment in Cuba, and
it will be part of the growth program we are designing.”

At the same time, Murillo said Cuba is putting together a “portfolio of
investments” in certain sectors that will have a “legal structure that
will stimulate investment.”

(Read more: Betting on regime change in Cuba)
That last phrase may be a hint that the government is willing to cede
control, at least in some cases, in joint ventures with overseas companies.

Targeting Certain Industries

Nearly 100 percent of the Cuban economy is government-controlled. But
there are a small number of joint ventures with foreign firms. (The
government describes them as “mixed companies.”) The Cuban government
has always insisted in holding at least 51 percent of joint venture
shares, even as outside investors put up most of the money and know-how.

Rumors have been circulating for at least that this ownership structure
will change, and the vice president’s statement raised speculation about
its finally happening. Murillo added that the Cuban leadership will make
details clear in future meetings.

Vice Minister of Trade and Foreign Investment Antonio Carricarte told
reporters that the portfolio of possible investments will likely focus
on certain sectors: mining, tourism, renewable energy, food and
construction. Additionally, he pointed to the Mariel Port, which Cuba
has designated as a special development zone, saying that the government
is developing a set of investment norms that foreign firms will find

Right now, there appears to be very little foreign investment in Cuba.
Carricarte told reporters there are 190 foreign companies invested there
but declined repeatedly to place a dollar value on the level of the

(Read more: In communist Cuba, the tax man cometh)
Spain’s leading hotel chain, Melia, has long had joint ventures with
Cuba’s government, but many of those properties appear dated. Ivis
Fernandez Pena, a representative of the Ministry of Tourism in the beach
area of Varadero, told reporters that there had been no new foreign
investment in beach hotels in the last five years but noted that a golf
project would start in 2014. She declined to identify the co-investor.

Justin Solomon | CNBC
One place where such investment is visible is in the oil and gas
industry. Driving toward Varadero, a team from CNBC spotted at least one
oil drill bearing Chinese flags. In a meeting with reporters, Deputy
Minister of Energy and Mining Arnaldo Batista Fonseca declined to
discuss anything about Chinese investment in the energy sector.

When officials do disclose investment numbers, they’re small relative to
the possibilities. Yuri Camilo Viamontes Lazo is the vice general
manager of Energas, a power company that is a joint venture between the
Cuban government and Sherritt International of Canada.

Viamontes told reporters that Sherritt had invested more than $400
million since the venture began 16 years ago. Sherritt owns 33 percent
of the company. While that may be a lot of money for both Cuba and
Sherritt, which has a market cap of $1.15 billion (1.2 billion Canadian
dollars), it is far below what the Cuban power sector could use.

As for any kind of large-scale privatizations, investors will have to
keep waiting. Murillo told reporters that when it comes to Cuba’s GDP,
the “socialist state company will have a decisive role, and will
continue to be decisive.” He said that five years from now, large state
enterprises “will continue to be decisive in wealth creation in Cuba.”

—By CNBC’s Michelle Caruso-Cabrera. Follow her on Twitter @MCaruso_Cabrera.

Source: “Want to invest in Cuba? Learn how to wait” –

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