Spider’s Web to Trap Investors
Spider’s Web to Trap Investors / Miriam Celaya
Posted on April 4, 2014
HAVANA, Cuba – Some 53 years, 5 months and 17 days after the publication
of Law 890, which provided for the expropriation of many locally owned
and foreign firms, principally American, the regime just introduced the
new Foreign Investment Law that goes into effect in 90 days.
The new ordinance replaces the norms in effect since 1995, when the
sharpest and longest economic crisis suffered by the country forced the
country to turn to foreign capital investments in Cuba, despite the
purest principles of the Communist doctrine in which several generations
have been (de)formed at the hands of this government. By then, some
foreign businessmen were tempted to ensure themselves a space in the
virgin market, while others discovered the a true tax haven in the
Caribbean socialist inferno.
These capitalist outposts gave the regime the oxygen needed to overcome
the imminent asphyxiation, and also made possible Castro I’s backing off
from the “opening” that had allowed the return of small private property
in the form of some family businesses–such as snack bars, restaurants
and rooms for rent, among others–that had rapidly expanded throughout
the island from the beginning of the 90s.
Now that foreign capital has ceased to be an evil that must be overcome
by socialism and has been converted into a “necessary good” called on to
boost the always promised and never reached “economic development of the
country” (Juventud Rebelde (Rebel Youth), Sunday 30 March 2014).
It’s here that, among the surprises that the updating of the Raulist
model holds for us, Powerful Mr. Money is destined to facilitate “the
consolidation of Cuban socialism,” which this time–yes, now!–will be
“prosperous and sustainable, thanks to that formerly demonized capital.
That other ancient bearded one, Karl Marx, must be turning in his grave.
Retrospective: the negation of capital
In 1960, Article 1 of Law 890 declared: Nationalization is carried out
through the forced expropriation of all industrial and commercial
businesses, as well as factories, warehouses, deposits and other
properties and members’ rights of the same.
Under this law, the state appropriated 105 sugar mills, 18 distilleries,
6 alcoholic beverage factories, 6 soap and perfume factories, 5 dairies,
2 chocolate factories, one flour mill, 7 packaging factories, 4 paint
factories, 3 chemical producers, 6 metallurgists, 7 stationary makers, a
lamp factory, 60 textile and apparel industries, 16 rice mills, 7 food
factories, 2 vegetable oil makers, 47 food stores, 11 coffee roasters, 3
drug stores, 13 department store, 8 railroads, a printer, 11 cinemas and
film circuits, 19 construction-related companies, a power company and 13
In subsequent months the expropriations continued, given that the
Revolutionary government had decided to “adopt formulas that finally
liquidated the economic power of the privileged interests that conspire
against the people, proceeding to the nationalization of the large
industrial and commercial companies that have not adapted nor can ever
adapt to the Revolutionary reality of our nation.”
Spider Web to trap the unwary
At present no one seems to remember the aforementioned Law 890. Nor do
they allude to the fiasco of the entrepreneurs who dared to negotiate
with the Castros in the 90s and suffered great material and financial
losses in the adventure. Few earned the expected profits, much less kept
their businesses on the island. It’s not known if there were
indemnifications, although there were definitely damages to public
opinion from the irresponsible actions of so many foreign investors and
of the Cuban authorities. The government has not publicly acknowledged
responsibility for its mistakes, and on the other hand, we Cubans have
not seen the benefits from theses inflows of capital. Nothing guarantees
we will realize them with the new legislation, the greatly over-used
“judicial guarantees” are not for us.
The rights and benefits of Cuban workers were also enunciated: “There
will not be free contracting of a labor force, so the figure of the
employing entity will be maintained, the wages will be conditional upon
the labor supplied, efficiency, and the value added that the company
generates.” Furthermore, “The payment of the workforce will be
negotiated between the employing entity and the foreign capital company.”
Thus, the State-Government, as the “employing entity,” will continue to
be the owner and the Cuban employees the rented slaves, a detail that
should serve to alert potential employers, given that the chronic low
wages is the best incentive for theft and other forms of corruption,
common among us as illegal, but legitimate, methods of survival.
The new Foreign Investment Law has not yet been published or circulated
as a draft in tabloid form in recent days, so that the exact terms of
its text, considerations for parties, etc. are unknown. However, it is
expected to suffer some modifications to suit the needs of investors
interested in trading in Cuba. The cupola will have to cede or pass
away, but it will certainly seek huge profits.
It simply remains to be seem how many unsuspecting entrepreneurs fall
this time in the murky legal webs of Castrolandia. Forgive me if I don’t
wish them success.
* Official Gazette of the Republic of Cuba (Special Edition Havana,
Thursday Oct. 13, 1960, Year LVIII, Vol Fortnightly, No. XIX).
Cubanet, 4 April 2014, Miriam Celaya
Source: Spider’s Web to Trap Investors / Miriam Celaya | Translating