/IPS DEVELOPMENT BULLETIN/ CUBA: Helms-Burton Act has not Shut The Door on Cuba

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Mar 15 1997 (IPS) - Cuba, despite its economic battle against the U.S. trade embargo, is still managing to attract foreign investment capital and is expanding overseas commerce.

During a recent round-table discussion in Havana, convened by the British magazine “The Economist,” Cuban vice-president, Carlos Lage, commented on the year since the signing the Helms- Burton Act in the United States to tighten the blockade of Cuba.

“The effects (of the Act) are bothersome, but not so bothersome as to discourage economic growth,” he said.

Ricardo Cabrisas, Cuban Minister of Foreign Trade, said that numerous difficulties continue to arise from the Helms-Burton Act, such as delayed financing of fertilizer purchases, and increased difficulty buying medical equipment and certain critical commodities.

The most contraversial aspects of the U.S. legislation approved on March 12 1996 is that it authorizes lawsuits against any country which trades with Cuban businesses that infringe upon property rights purportedly exercised by Cuban citizens now resident in the United States.

Official Cuban sources say that although the effects of the Act are negative, it has not caused any existing trade partner to quit commerce with Cuba. At the same time, officials recognize that excessive caution is now exhibited by a large number of prospective trading partners, resulting in declining foreign investment growth as well as increased difficulty in accessing medium and long-term financing.

Lage pointed out that the initial impact of the Helms-Burton Act was a delay in foreign financing for the 1996-1997 sugar harvest – predited to be 4.8 million tons. This delay was directly attributable to fears of economic reprisal.

The Mexican firm Domos, reportedly was considering breaking off its telecommunications deal with Cuba and selling its shares in the Cuban telephone concedrn ETECSA to the Italy’s STET company. Some Cuban financial sources , however, said that Domos encountered financial difficulties from the moment it purchased its 49 per cent share in ETECSA. According to these sources, Domos did not meet its final payment of 300 million dollars in September, 1995, and since then it has been struggling to pay late fees.

Lage pointed out that 42 economic agreements between Cuba and foreign investors had been completed since the enactment of Helms- Burton, and furthermore, offers assurance that all necessar measures for the full opening of Cuba’s economy “shall be put into place.”

Official sources added that Cuba now had 260 economic associations involving foreign capital are now based in Cuba, 17 per cent of which became operative after the Helms-Burton Act was passed.

Among Cuba’s foremost investors are Spain, Canada, Britain, Italy, France, Mexico and the Netherlands. Fiftythree per cent of all foreign investment comes from members of the European Comon Market.

Ibrahim Fernandez, Cuban Minister for Foreign Investment and Economic Collaboration, announced that his government is studying the adoption of new laws destined to facilitate and to stimulate foreign investment in Cuba. He said Cuba will introduce an amendment to the Foreign Investment Act of September, 1995, (a law based on the Spanish Royal Code of 1882), that will specify new terms for incorporation, and for real estate ownership.

Foreign Trade Minister Ricardo Cabrisas noted that “Helms- Burton tends to create an international atmosphere that militates against commercial and economic links with Cuba.” But he released statistics showing that Cuban foreign investment in 1996 grew 22 percent over the 1995 level and that the number of countries trading with Cuba rose to 132 from 111.

John Kavulich, President of the Cuban-American Economic Trade Council, told the “round-table” that “far from applying the brakes to American investors, the Helms-Burton Act caused a surge of interest concerning Cuba and commercial investment there.”

According to Kavulich, trade activity between U.S. corporations and Cuba has been focused on telecommunications, air transport, medical equipment and credit card operations, along with a generlized increased in the availability of ever-more American brands throughout the island.