CUBA

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CUBA

• socio-economic factors of investing in Cuba

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Map of Cuba
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Cuba Introduction

• Full name Republic of Cuba
• Population 11 million (Spanish/African origin)
• Workforce 4.5 million
• Location Island between the Caribbean sea and
  the North Atlantic Sea, south of Florida
• Language Spanish
• Government Communist Republic
• Head of state Fidel Castro
• Religion 47 catholic
• Capital Havana

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Cuba History

• 1850 Independence from Spain
• 1898 US Control
• 1902 Independence from US but still the right
  to intervene under Platt amendment
• 1959 Fidel Castro takes power moves toward a
  one party communist system
• 1960 US embargo
• 1961 US discovery of soviet missiles in Cuba
• 1970s Relations between US and Cuba improve
• 1980s Exit restrictions temporarily lifted

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Cuba in the 90s

• Collapse of USSR trade subsidies to Cuba ended
• Sugarcane production drops to an all time low
• Illicit migration
• High levels of development in health education
• However, overall welfare of Cuban citizens is
  poor, inadequate levels of food and electricity
• Shutting down of vibrant media control
• Castros control over all aspects of Cuban life

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Cuba Government Institutions

• Totalitarian state controlled by Fidel Castro
• Castro
• Chief of state
• Head of Government
• First secretary of Cuban Communist Party
• Commander in chief of armed forces
• Catholic Church largest independent institution
  under significant pressure. Limited capabilities
• Communist Party only legal political party
• National Assembly of Peoples Council of State
• Supreme Authority in Cuban system

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Cuba Structures

• Natural Resources
• Transportation
• Roads
• Railways
• Merchant marine
• Airports
• Communication
• Telephones
• Broadcasting facilities

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Cuba Structures

• Economy
• Agriculture
• Forestry Fishing
• Mining Manufacturing
• Energy
• Foreign Trade (1998)
• Exports 1.5 billion
• Imports 3.2 billion

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Cuba Internationalisation

• During the nineties
• High bank interest rates at international level
• Fluctuations in money market quotations and
  unfavourable exchange rates in world-wide terms
• Acts which limited Cuba
• Torricelli Act
• Helms Burton Act

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Cuba Internationalisation

• New laws for foreign investment
• To form mixed companies in Cuba
• To be given protection and security
• Allowed state enterprises, joint ventures and
  international economic associations to be
  established
• No import or export license regime, regulations
  or quotas that may hinder foreign trade
• 2 taxes on businesses
• Benefit tax (up to 30)
• Tax on Cuban personnel (up to 25)

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Cuba Internationalisation

• Process of Investment
• Find out which Cuban businesses would have an
  interest in an investment project
• Prepare a legal and economic document of your
  business
• Present it to the Ministry of Foreign Trade who
  will then carry out a preliminary evaluation
• The Ministry will respond within 60 days.
• New associations then register in the National
  Chamber of Commerces business register.

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Cuba Internationalisation

• 1998 ALADI The Latin America Association
  of Integration
• 1999 350 economic associations established
  by foreign capital

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Cuba Workforce

• CTC Confederation of Cuban workers
• Sole legal labour organisation
• Communist Party selects leaders
• Government forbids other unions
• 4.5 million working people
• 76 employed directly by the state
• 10 employed in government-run agricultural
  cooperatives

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Cuba Workforce

• Foreign investments in JV
• Carefully controlled
• Hire workers from government agencies for a fee
  of 95 of salaries
• Arcos Principles
• Fair labour hiring
• Fair labour work standards

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Cuba Workforce

• Unemployment rate declined 6.6 in 1998
• Working conditions improved
• Womens participation 37
• Education services show gradual improvement

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Cuba Risk

• The U.S. Trade embargo
• Sanctions
• Penalties
• Human Rights
• The Future?
• Military Manpower
• Size
• Aid
• Illicit Drugs
• Climate
• Risk of natural disasters

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Sources

• www.cubagov.cu
• www.cia.gov
• www.acesspro.net
• www.cubatrade.org
• www.cnn.com

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