The Cuban government will allow foreign investment in the national wholesale and retail trade for the first time since 1959. The move aims to address critical commodity shortages and boost local industry.
“Foreign investment in wholesale and retail trade, with state regulation, will enable the expansion and diversification of supply to the population and contribute to the recovery of national industry,” tweeted Tuesday. Cuban Economy Minister Alejandro Gil, expanding on a late announcement. the night before.
Deputy Commerce Minister Ana Gonzalez Fraga said foreign investors would be allowed to fully own Cuban wholesalers for the first time since Fidel Castro’s revolution in 1959, while retailers could participate in public-private ventures .
Previously, foreign investment in Cuba was only allowed in the domestic manufacturing sector and the service sector.
Shortages trigger discontent
The decision to open up a sector controlled by the communist government reflects the difficulties of state enterprises in accessing foreign currencies and raw materials.
Severe shortages of basics such as food, medicine and fuel have sparked growing discontent in Cuba, which has led to repeated protests in recent months. The rapid growth of informal trade in essential goods triggered consumer inflation of almost 70% at the end of last year.
According to Cuban economist Mauricio Miranda Parrondo, “the state monopoly on foreign trade and retail is responsible for the shortage of consumer goods in the domestic market”.
Reforms in communist Cuba
Economic difficulties prompted the Cuban government to introduce gradual reforms. In August last year, he gave the green light to small and medium-sized businesses to start operating on the island.
Months earlier he had allowed private enterprise for the first time, but this was limited to individual entrepreneurs, not corporations.
The reforms represent a major ideological shift in a country where the government and its affiliates have monopolized most of the economy for decades.
Cuba is mired in the worst economic crisis in 30 years, fueled by tougher sanctions under Donald Trump’s administration and the aftermath of the coronavirus crisis, which has hit the critical tourism sector hard.
dh/ko (AFP, Reuters)