Havana Trade Fair a bridge for trade and foreign investment
In an exclusive interview with Cubaplus, Cuba's Chamber of Commerce VP Odalys Seijo asserted that this year's International Havana Trade Fair (FIHAV), the 27th, will go beyond strictly commercial promotion by also providing a space for development, friendship and multilateral cooperation.
"FIHAV has served to portray the reality of our country and to present the opportunities offered by the Cuban market, as much in exports as in goods and services, as well as the possibility to satisfy our import needs. It has also given a fresh boost to the different modalities in cooperation and promotion of foreign investment in diverse fields of our economy, " noted Ms. Seijo.
When asked about direct foreign investments in Cuba, Seijo stated that current policy is oriented toward seeking new markets abroad, competitive technologies and capital. To further this objective, new legislation on foreign investment and trade was passed in 1995 (Law #77), in correspondence with international trends.
Ms. Seijo, noted that in 2004, Amendment 5290 added other foreign investment modalities not included in the original Law 77, such as contracts for cooperative production and administration of goods and services and hotel management
"In addition to the legal framework," she continued, "there are real incentives in Cuba such as availability of a work force qualified to assimilate new technologies in the short term, an adequate infrastructure with 95% of the island covered by the power supply grid, social stability, security for foreign staff, and the prospects of integration with the region, the geographic location of the country as the hub of an expanding market and key commercial routes, and the Agreements for Promotion and Reciprocal Protection of Investments with 62 countries, as well as 11 agreements to avoid double taxation."
International agreements have been set up chiefly in mining, gas and oil prospecting and extraction, tourism, light industry, food, metallurgy, construction, energy, finances and cigar trade, among others; while other major projects have also been developed in hotel management, the cement, transportation and paint industries, and civil aviation.
Explaining how a foreign business can invest in Cuba, Ms. Seijo said that the first and most important condition is that the project be in the national interest and have guaranteed high efficiency. The next step, she clarified, is to identify the Cuban entities with possible interest in a joint investment using foreign capital, this is done through the Ministry of Foreign Trade and Foreign Investment (MINCEX), by contracting the services of an international legal consulting agency in Cuba or contacting the appropriate ministries or trade groups.
To the question of Canada's position as trade partner in foreign investments in Cuba, she pointed out that, without doubt, Canada is one of the main investors in this country. Canadian investments are significant in the current Cuban economy given its relative size, and the key sectors of nickel-cobalt production and gas and oil prospecting and extraction.
Canada holds 15% of all current foreign investment in the island, 9% of it in the mining industry, where it is the greatest investor. In terms of bilateral trade, Seijo noted that Canada is the fourth commercial partner with Cuba, representing 8% of global trade for Cuba in 2008. Exports to Canada include nickel (90 % of total exports to Canada) and imports include foodstuffs, minerals, equipment and machinery.
Tourism has been one of the pillars in the revival of the Cuban economy, and Canada holds the leadership in this area. Last year 820,000 Canadian tourists visited Cuba, a notable increment over 2007. Canadian tourism is a solid, consolidated market, with a high rate of revisits.
According to international studies, Cuba will have the capacity to receive seven million tourists a year; if 85,000 thousand more rooms are built.
In order to do this, Ms. Seijo concluded, there is a need for foreign capital participation in tourism in specific areas of the island, such as operating, expanding and modernizing vessels for the marinas, developing nautical multi-destinations, and accessing state-of-the-art technologies for shipbuilding and repair; as well as in spheres like golf courses and theme parks.