Cuba Open for Foreign Investment at Mariel
HAVANA TIMES — Cuba will open to foreign investment starting Friday at the newly created special economic zone around the port of Mariel, a mega project to try to boost capital inflows to the island, reported dpa news.
The Bureau of the Special Zone Development at Mariel opens and laws granting tax benefits also take effect November 1 in the new industrial site, located about 45 kilometers west of Havana .
The planned special economic zone, similar to those that propelled China’s economic development in the late 70s, will have 465.4 square kilometers. The port of Mariel, which shot to fame by the mass exodus of 1980, is the centerpiece of the megaproject, funded in part with Brazilian capital.
The authorities will grant various tax privileges for companies operating in the zone. Among them is the tax exemption on labor, and on profits for ten years, with renewal options.
The administrative concession is granted for “the management of a public service works or the exploitation of property for 50 years and may be extended,” project evaluation business manager Oscar Peres told Prensa Latina.
The island hopes to get investment for “the production of drugs, biotechnology, renewable energy, agriculture, industry, tourism, real estate, telecommunications, information technology and infrastructure,” the report said.
Cuba, subject to a process of economic liberalization for several years, hopes to turn the area around Mariel into a “trading hub” in the region.
The port of Mariel became famous for the mass exodus of Cubans to the United States in 1980. An estimated 125,000 people left the island then. Exiles settled mainly in Florida came in boats to pick up relatives in the harbor between April 15 and October 31 of that year, in one of the worst migration crises between the US and Cuba.
Infrastructure works to enlarge the port are being carried out with considerable financial support from Brazil. Dilma Rousseff ‘s government has granted a loan of 680 million dollars.
Brazil’s Odebrecht Group is also involved in the construction work. The “Mariel project” is one of the biggest efforts of the Castro government to revive the ailing economy of the island.
The industrial zone in construction between the between the bays of Mariel and Cabanas will also have a container terminal.
The world is full of peculiar economic relationship. Who ever thought The People Republic of China would ever be the largest foreign holder of USA dept?
Of the $6 billion in loans classified as “secret”, it is believed the largest share ($5 billion) is earmarked for financing sales of goods and services to Angola, where three dozen Brazilian companies have operations. That would leave the Angolan government as the largest beneficiary of export funds from BNDES. (the Brazilian Development Bank, & the main financier of Brazilian exports.) The remainder ($1 billion) has gone to Cuba, divided between exports ($600 million) and emergency food aid ($400 million).
The Rousseff administration maintains a surprising number of secrets in their relations with tyrants like Jose Eduardo Santos (Angola), the Castro brothers (Cuba), Robert Mugabe (Zimbabwe), Teodoro Obiang (Equatorial Guinea), Denis Sassou Nguesso (Congo- Brazzaville), Odimba Ali Bongo (Gabon) and Omar al Bashir (Sudan) – this last one accused of genocide by the International Criminal Court and sought by Interpol.
Clearly, the contract to send thousands of Cuban medical staff to work in Brazil is an essential component of this peculiar economic relationship.
I have financing for those projects, offshore. Paolo
Mr. Jones, this is more than a glass half empty, half full difference of opinion. The fact that Cuba has engendered interest in the project from the countries you listed does not negate the lack of a US market. It also does not magically bestow business savvy upon the Cuban managers responsible for overseeing the economic zone. The size of the zone is irrelevant. This is land wholly unproductive so why not dedicate it to this project. This would not be the first time the Castros have championed some overreaching plan to rescue the economy only to have it come to nothing. You know the list of failures better than I do. How many Cubans are still waiting for that glass of milk on every table? Finally, call me an “ill-wisher” but I do not support the dictatorship. Likewise, you seem to be ignoring gaping holes in the part of the plan that we do know. You always try to highlight even the smallest accomplishment the regime can manage to scrape up while ignoring huge flaws like the more than 900 documented dissidents arrested during the month of October. You attack the US which gives you the freedom to criticize it while ignoring the fact that Cuba was caught red-handed sending weapons to North Korea. I read your recent comment to the website La Joven Cuba. Could an American living in Cuba write a comment critical of Cuba with same level of venom without risking arrest or deportation. We both know the answer. If Columbus landed in Cuba today, would he be impressed with the progress in Cuba over the last 500 years? Probably not.
Without knowing the inner working of this or any other project of this magnitude here or there, it is hard for me to imagine, as simple readers and posters, speculators and ill wishers, we can safely predict the outcome of this project.
We may question the wisdom or lack thereof of the Cuban Minister of Foreign Investment, but, are his Brazilian, Indian, Russian, Chinese and others who have indicated their intention to participate, also business neophytes?
Had this project been a simple “show” or “make believe”, why encompass an area that is larger than many Caribbean islands?
Are we praying for its failure or is this a futile effort to scare away potential investors?
Just as the Cuban government identified the enormous potential that remained dormant for 50 years in El Mariel, what will we say or do, whenever they decide to
awaken and put in motion Guantanamo, the sleeping giant in SE Cub?.
Christopher Columbus describe as Cuba the “Key” of the Gulf. We are seeing Columbus assessment vindicated!
If the success or failure of the Mariel Port expansion depended solely on the efforts of the Castros to attract foreign firms to invest, I would have no doubt it would be doomed to fail. However, Brazil admits to loaning $900 million to this project. I can’t imagine the Brazilians are so gullible as to trust the Castros on their word alone. Something else must be in play here. There must be a reason President Rousseff declared the details of this deal a ‘national security’ secret and has refused to disclose repayment terms and loan details. One theory some Brazilians believe is that because of politically sensitive cost overruns to construction projects in Brazil in preparation for the World Cup next year, Rousseff invited the Brazilian giant Oderbrecht to participate in the Mariel project to recoup fees earned in Brazilian projects. Maybe the project does not have to make sense at all. Instead it simply gives Brazil a way to hide expenses.
The recent arrests of several foreign businessmen has put a major damper on foreign investment. Over 200 joint ventures have closed in the past few years, and many foreign firms have expressed frustration with the restricted business climate in Cuba. Add to that, the rising uncertainty over the recently announced plan to end the dual currency system. And the US market will remain closed until the conditions of the Helms-Burton Law are fulfilled (whatever one might think of it). Given all that, it is not at all clear that the Mariel scheme is going to attract any new investment.
Mariel is looking more like a huge white elephant than a saviour of the Cuban economy.