Among Cuba's recently announced economic measures, the expanded opening to foreign investment and the liberalization of foreign trade stand out as the most significant reforms in decades.
The National Assembly (Parliament) has approved a package of measures that, for the first time, allows foreign capital participation in private companies and cooperatives, authorizes direct foreign trade without state intermediaries, and expands the partial dollarization of the economy.
Within the framework of the historic package of 176 economic measures unanimously approved by the National Assembly, the Cuban government is implementing an unprecedented shift in its foreign investment and trade policy. This move opens the door to foreign capital participation in the private sector and eliminates decades of absolute state control over imports and exports.
The reforms, presented by Cuban Prime Minister Manuel Marrero and backed by the Communist Party of Cuba (PCC), aim to stimulate an economy grappling with its worst crisis in many years. This comes at a time of sustained contraction in the island's gross domestic product (GDP) over the past six years, further exacerbated by the tightening of the U.S. embargo, which severely restricts oil imports to the island.
The reform package includes a substantial simplification of procedures for approving foreign direct investment, with greater decentralization of the process designed to accelerate capital inflows to the island.
For the first time, private and foreign capital participation in private companies and cooperatives is authorized. This is a profound change that breaks from the traditional model where foreign investment could only be channeled into state-owned enterprises.
The government will also permit foreign capital involvement in the purchase and sale of fuels, as well as in strategic technological areas such as Etecsa's data centers, mobile networks, and other digital infrastructures.
In the financial sector, the measures project increased private capital participation in banking activities, including the potential creation of private banks under the supervision of the Central Bank and subject to the same regulations as the state banking system.
One of the most significant changes is the authorization for private companies—including micro, small, and medium-sized enterprises (MSMEs) and cooperatives—to directly import and export. This eliminates the need to rely on state agencies, which until now established mandatory deadlines and fees. This removal of mandatory state intermediation represents a radical shift in Cuba's foreign trade model, which for decades maintained absolute state control over import and export operations.
The new regulations also offer incentives for importing inputs and raw materials destined for production processes, aiming to reactivate national industry.
State-owned enterprises will also benefit from these measures, gaining the autonomy to design their own salary systems, utilize their profits with fewer restrictions, and partner with private companies and cooperatives.
The reforms place Cubans residing abroad on par with foreign investors regarding participation in direct investment projects. Municipal governments, which will also gain the authority to export, import, and retain foreign currency, will be able to manage projects driven by Cubans living outside the island. This opening seeks to channel remittances and capital from the Cuban diaspora into productive investments within the country—a sector that, until now, faced significant restrictions on participation in the national economy.
As part of the reform package, the government plans a readjustment of the official foreign exchange market, incorporating non-state economic actors and authorizing the creation of private exchange houses. The measures also include a flexibilization of financial operations for foreign investors, set against a backdrop of increasing partial dollarization of the Cuban economy, driven by foreign currency shortages and the rapid depreciation of the peso.
(Taken from Prensa Latina)
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