ECONOMY-CUBA: US Executives, Local Officials Talk Shop in Havana

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Jun 7 2001 (IPS) - Some 50 executives from the United States are attending the fifth U.S.-Cuban Business Summit that opened Thursday in Havana, and which for the first time is taking place entirely on Cuban soil, despite the 40-year-old economic embargo.

The annual meetings, aimed at exploring investment prospects in this socialist Caribbean island nation, have been held the past four years in the Mexican resort city of Cancun, with just a several-hour stopover in the Cuban capital.

The agenda for the two-day gathering includes conferences with cabinet ministers and other government officials Thursday and meetings between U.S. executives and representatives of Cuban enterprises Friday.

The list of visitors includes representatives of firms in the construction and food sectors, the hi-tech and computer industries, and pharmaceutical and transport companies.

The U.S. business community would like to reestablish economic and commercial relations with Cuba in “a calm, legal manner,” said Nicola Cecchi, the head of the Italian firm Cristobal SRL, the official organiser and sponsor of the annual events.

Cristobal SRL covers the expenses of the U.S. participants, thus getting around the restrictions imposed by Washington’s four- decade blockade against Cuba. The conference is co-sponsored by Alamar Association, a firm based in Washington, D.C., and Cuba’s Centre for Promotion of Investment.

The embargo stipulates that U.S. citizens need a licence from the Treasury Department allowing them to spend money in Cuba. However, such permits are only extended to journalists, artists, scientists, academics and Cuban-American citizens.

And while the upper limit on spending is 100 dollars a day, a single night’s stay at one of Havana’s five-star hotels costs more than that.

In an interview with Cuba’s specialised weekly Opciones, Cecchi said he was pleased with the advances seen in the business negotiations, and underlined that an increasing number of people in the United States believed it was necessary to start doing business with Cuba.

He also stressed that although the U.S. participants did not talk politics while in Cuba, they disagreed with the embargo.

Nevertheless, the tense relations between Cuba and the United States and Washington’s increasingly hard-line Cuba policy will continue to reduce the annual gatherings to the merely rhetorical plane for now, say analysts.

The U.S. business community has awakened to the fact that more and more firms from Europe and other regions are setting up shop in Cuba, said Cecchi, who added that “they want to participate too.”

Official Cuban statistics indicate that by late 2000, 392 joint ventures were operating here with foreign participation, involving around five billion dollars of financing in the pipeline.

The fact that more than 60 percent of those joint ventures were arranged in the wake of the passage of the Torricelli (1993) and Helms-Burton (1996) laws is interpreted by authorities here as a sign of the failure of Washington’s attempts to block foreign investment flows to Cuba.

The law sponsored by Robert Torricelli, now a senator, while he served in the House of Representatives from 1982 to 1996 banned U.S. companies’ subsidiaries in third countries from trading with Cuba.

Meanwhile, the law drafted by senators Jesse Helms and John Burton provides for sanctions to be imposed on firms from third party countries that invest in U.S. property that was expropriated or confiscated by the government of Fidel Castro.

The capital invested in Cuba so far has come from 46 countries, involving 32 sectors of the economy, especially tourism, oil, mining, light industry and farming.

The previous U.S.-Cuba Business Summit took place in June 2000 amidst a climate of optimism due to the debate taking place at that time in the U.S. Congress of a bill designed to permit U.S. companies to sell food and medicine to Cuba.

The bill was backed by a broad coalition of farmers; other big business interests, led by the U.S. Chamber of Commerce; and church groups.

But the version of the bill that was finally passed in October made it virtually impossible to do business, by banning financing of sales to Cuba by any public or private U.S. government agency, bank or other financial institution. Moreover, the law not only failed to end restrictions on travel to Cuba, but actually codified the existing ban on travel here by U.S. tourists.

In response, Havana declared that until all of the economic restrictions were lifted, it would not buy one single grain of rice or one aspirin tablet from the United States.

The government has not wavered in its stance, despite the efforts of U.S. business leaders and legislators to get it to change its mind.

Sources with the U.S. farm sector have pointed out that since 1962, Cuba has imported 8.5 million tonnes of rice, which could have meant 3.1 billion dollars in revenue for U.S. producers if the embargo had not been in place.

Up to 1958, the United States accounted for around 70 percent of Cuba’s imports and exports.

After diplomatic and economic ties between Havana and Washington broke off in the early 1960s, the Castro regime found new trading partners in the east European socialist bloc, which concentrated 85 percent of Cuba’s imports and exports until the 1989 collapse of the Berlin wall and the subsequent break-up of the Soviet Union.