CUBA: Europe Looks Keenly on a Promising Market

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, May 2 1997 (IPS) - Entrepreneurs from France, Germany, the Netherlands, Poland and Spain have been visiting Cuba in the last few weeks with an eye on possible business openings.

The first entrepreneurial workshop “Business Opportunities in Cuba” also attracted around a hundred more businesspeople from Mexico, Canada, Italy the US and the host country to Havana in late April.

Local experts said the constant flow of important representatives of the business world meant the island was being seen as a feasible commercial marketplace smack in the middle of the Caribbean.

For the Cuban authorities, the increasing interest of investors and businesspeople is a “show of confidence” at a time when the national economy has started to come out of the worst crisis since the 1959 revolution.

Also, they said, it shows the international community’s decision not to give in to pressure from the US Helms-Burton bill, which aims to toughen up the conditions on the economic blockade decreed against the island by Washington in 1962.

What is obvious is that Cuba is increasingly attractive to the business community, above all the Europeans, who see the absence of US capital as an extra point in favour of the country.

Sources within the European Union (EU) assured that Spain, France, Britain, Italy and the Netherlands would all join the group of the island’s ten main trade partners. Trade between these countries and Cuba makes up more than 60 percent of the island’s total trade.

The tourist groups who most visit the country include Canadians, Italians, Spaniards and the French.

Cuba has mutual investment protection agreements with Britain, Italy, Spain, Germany and France, the latter signed just last month, and the only EU nation without a formal bilateral agreement with the island now is the Republic of Ireland.

“The taking of Havana by the French,” was the term used to describe the success of the third mission of the National Council of French Heritage, from April 12 to 18.

One of the most important contributions left by the 35-member delegation, were the 16 million dollars for the updating and improving of the Antonio Maceo electricity plant in the province of Santiago de Cuba, 967 km from Havana.

In less than a week a French bread and preserves factory was inaugurated, and cooperation agreements were signed between universities in the two countries, while 20 co-operation projects were approved.

The French company Martinica FDC also participated this year in a joint venture to supply the Ministry of Higher Education with books.

The State company Electricité de France (EDF), the world’s leading electricity producer and operator, the Cuban Electrical Union and a Canadian company are looking into the possibility of forming a joint venture.

The project, one of the 20 currently being negotiated, aims to increase the generating capacity of the Santa Cruz del Norte electricity plant, some 50 km east of Havana, by 650 megawatts.

At the same time, negotiations have been started for production associations for fruit juice and preserves, the constructon of small scale plants fired by sugar cane husks and the construction of housing and refurbishing of old hotels.

Diplomatic sources estimated Cuban-French trade at 230 million dollars in 1996, with a surplus in favour of the European country.

There were seven French companies in Cuba in 1992, and by 1996, the number had swollen to 46.

Cuban vicepresident Carlos Lage said this month “trade between the two countries still outpaced investment, but this is already beginning to increase” explaining that French loans to the island had increased.

Also, 12 European industrialists from the food and drink, publishing, textile, metallurgical and packaging branches, belonging to the Llobregat Anoia (AELLA) Business Association of the Spanish city of Barcelona.

The mission made contact with 85 Cuban companies and, Leonardo Urrutia, member of the AELLS board of directors, said negotiations so far would mean cooperative production would be worth between five and seven million dollars in the first year.

Official Communist Party weekly, Granma Internacional, said an agreement would be signed between Spain’s Yes Metallurgical company – which produces plumbing and parts – and Cuba’s Herrajes del Caribe.

Spain’s ECO Ofice, which produces office and school stationary, amongst other things, made a supply agreement with ITH Cubanacan, while Giros Durich drew up an accord for the production and marketing of meat products with the island’s Copsa company.

In 1995 and 1996, Spain was Cuba’s third most important trade partner, only outdone by Canada and Russia. Official sources estimated bilateral trade at 446 and 566 million dollars respectively in these two years.

According to official figures, more than 120 spanish companies are represented in Cuba, and this country is also involved in 50 of the 260 or so joint ventures on the island.

The Association of German Travel Agencies (DRV) held its fifth convention in Havana from April 22 to May 2, because Cuba is seen as “an interesting country for German tourism.”

Although the figure of German tourists entering Cuba in 1996 is considered low (at around 80,000), it grew 25 percent compared with 1995 and totalled 8 percent of the total visitors, said DRV president Gerd Hesselmann.

Leonard Reeb, another association director, said that in 1996 Cuba became the third favourite Caribbean tourist destination for German visitors, only outdone by the Dominican Republic (with 400,000 visitors) and Mexico (with 180,000).

Last month also marked the first edition of the Europe-Cuba- Caribbean Economic Report, published by the German group, Gerda Daenecke.

This document mentioned some 30 German concerns interested in establishing or expanding their business in the region.

Cuba’s old trade partners in the former European socialist bloc have also started to understand that this island, the largest in the Caribbean, represents a doorway to Latin America, and a market for technology they would not be able to sell in other regions of the world.

A group of Polish entrepreneurs made an exploratory visit to Cuba and, Cuban daily “Granma” said this would reanimate trade and bilateral collaboration, which has been practically non- existent in recent years.

Jerzy Borysewicks, president of the Polish Bus-Trading company, said he was hoping to establish collboration agreements to provide spare parts for Polish machinery installed in Cuba and to import Cuban products already known in Poland.