Cuba approves new foreign investment law to support development

Fight Racism! Fight Imperialism! 240 August/September 2014

May Day in Havana, Cuba 2014

Cuba’s new direct Foreign Investment Law was implemented on 30 June 2014. Unanimously approved in March by the National Assembly of People’s Power, the law is in accordance with the Economic and Social Policy Guidelines for the Party and the Revolution. These guidelines were established by the 6th Congress of the Communist Party of Cuba in 2010 and discussed and modified across 163,000 consultations with almost nine million Cubans, before being ratified by the National Assembly of People’s Power in 2011. This extraordinary process of participative democracy governs the principles by which the Foreign Investment Law will operate. As the introduction of the guidelines affirms, ‘only socialism is capable of overcoming the difficulties and preserving the conquests of the Revolution, and that in the updating of the economic model, planning will be supreme, not the market’.

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Bacardi – new advertising, same agenda /FRFI! 239 Jun/Jul 2014

Fight Racism! Fight Imperialism! 239 June/July 2014

The Bacardi Corporation has launched a new deep saturation advertising campaign, with vibrant videos and colourful images. The adverts brandish the Cuban flag, with slogans such as ‘we survived exile from our own country’ and ‘we thrived during Prohibition’. Bacardi, the richest family-owned business in the world, has an army of lawyers and marketing and public relations professionals to clean up their murky past and obscure their right-wing agenda. Scratch the surface, however, and the truth is there.

Bacardi began leaving Cuba long before the revolution, back in 1910 when they moved their bottling to Barcelona, Spain. Later in the 1930s they opened facilities in Mexico and Puerto Rico. Bacardi boasts about how they benefited from the abuse of Cuba as a colonial playground for wealthy Americans during the Prohibition years. However, they also claim that their assets were ‘illegally confiscated without compensation’ by the Cuban government in 1960. In fact, they were offered compensation by the revolutionary government, a sum based on the value of the assets they had themselves declared for tax payment purposes. Pepin Bosch, head of Bacardi at the time of the Cuban Revolution, a man referred to as ‘the saviour’ on Bacardi’s website, was linked to the CIA and exiles groups actively involved in attacking revolutionary Cuba.

Later, he and other members of the Bacardi family helped set up the Cuban American National Foundation (CANF). Membership was initially granted to Cuban exiles whose businesses were worth more than $50,000 when they were nationalised by the Cuban government. This exclusive club used their wealth to buy power, cultivating the support of influential right-wing US senators. The fruit of this partnership was the Helms-Burton Act in 1996, which penalises any country trading with Cuba. Even the European Union questioned the legality of the Act, but CANF lawyers fought off every objection.

Rock around the Blockade (RATB) (, was set up by members of the Revolutionary Communist Group to campaign in solidarity with Cuban socialism. One of RATB’s most prominent campaigns has been to expose and oppose the Bacardi Corporation, highlighting its involvement in the illegal blockade and terrorism against Cuba and progressive movements in Latin America. We carried out Bacardi bar busts, street theatre, subvertising and appealed for conscientious drinkers to choose Havana Club, real Cuban rum, whose profits are invested in Cuban society. A really useful source of information about Bacardi’s history was the book Bacardi: the Hidden War (Bacardi: La Guerra Oculta) by Colombian journalist Hernando Calvo Ospina, which was reviewed in FRFI in 2001 ( See for our new campaign information to combat Bacardi’s latest shameless advertising campaign.

Scott Adams

Tweets, terrorists and mercenaries renewed attacks on Cuba /FRFI! 239 Jun/Jul 2014

Fight Racism! Fight Imperialism! 239 June/July 2014

In April and May 2014, news about two US-based attacks on Cuba hit international headlines, demonstrating that as the capitalist crisis intensifies, imperialist attempts to destabilise the popular and revolutionary government of socialist Cuba continue. Louise Gartrel reports.

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Cuban double agent reveals CIA machinations in Cuba

Enemigo by Raúl Capote, Editorial Jose Marti, 2011 (in Spanish)

Review by Raidel López

In Enemigo (Enemy), Cuban writer and university professor of history, Raúl Capote, reveals his life as a double agent; agent Pablo for the CIA, and agent Daniel for Cuban intelligence. This is not a work of fiction or a classic spy novel. It is the real experience narrated by the protagonist about plans by the CIA and its allies to destroy the Cuban Revolution. His story reveals one of the many facets of the US war against Cuba. For over half a century plans of espionage, sabotage, terrorist attacks, assassination, subversion, military, economic and political aggression, have been made and executed from the US. Most of these plans have failed, thanks to the work and sacrifice of men like Capote.

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Cuba inaugurates new port with international partners /FRFI 238 Apr/May 2014

Fight Racism! Fight Imperialism! 238 April/May 2014

On 27 January, Cuban President Raul Castro and Brazilian President Dilma Rousseff inaugurated the first 700 metre section of a container terminal at the port of Mariel, Cuba, in a ceremony attended by the Presidents of Haiti, Bolivia, Venezuela and Guyana and the Prime Minister of Jamaica. Raul Castro declared: ‘This container terminal, and the powerful infrastructure accompanying it, are a concrete example of the optimism and confidence with which we Cubans see a socialist and prosperous future.’ The heads of state were in Havana for a summit of the Community of Latin American and Caribbean States (see FRFI 237).

The Mariel Special Economic Development Zone is a 465km2 deepwater sea port and industrial park area in Artemisa Province, 45km west of Havana. The $950m development is intended to ‘increase exports, the effective substitution of imports, [promote] high-technology and local development projects, as well as contributing to the creation of new jobs’, and to stimulate foreign investment in Cuba. Mariel is the nearest port to the US. The Zone will benefit from the expansion of the Panama Canal, to be completed in 2015, and the creation of the transoceanic Nicaragua Canal by the HKND Group, expected to be completed by 2019. With world-leading technology and sufficient depth, Mariel will be able to accommodate huge post-Panamax vessels and act as a transhipment hub for the region.

Investments have already been proposed by companies in China, Brazil, Venezuela, Mexico, Argentina, Chile and the Dominican Republic, among others. Among the first projects will be a Brazilian-funded biopharmaceutical joint venture with a Cuban state company, to produce monoclonal antibodies for a cancer vaccine. The port was built by the Brazilian engineering group Odebrecht in partnership with the Cuban state and subsidised by $682m from the Brazilian government’s Development Bank (BNDES). In 2012 Odebrecht USA sued the State of Florida over a state law banning trade with companies which have business ties to Cuba. Brazil is Cuba’s second largest trading partner in Latin America, after Venezuela. About 400 Brazilian companies were involved in the project, generating some 156,000 jobs in Brazil and earning $802m for construction businesses. In Cuba, more than 2,000 workers from nearby towns were employed on the construction, and the Zone is expected to generate 3,000 direct jobs and 5,000 indirect ones.

The terminal will replace Havana Port as the main harbour of Cuba. It will have an initial 700 metre berth, a 2,400 metre dock and an annual capacity of up to one million containers. New roads and railway infrastructure will be built to link up with existing highways. The port will be operated by Singapore’s PSA International, which runs several of the world’s largest ports.

Foreign companies operating in the Zone can retain up to 100% ownership (as opposed to the standard joint venture agreement in which the Cuban state retains 51% ownership), are exempt from customs duties and labour taxes, get a one-year holiday on sales and services taxes and a 10-year reprieve for taxes on profits (after which they will pay 12% tax on profits). Contracts will be extended from 25 to up to 50 years.

However, unlike in similarly named ‘free-trade zones’, Cuban workers will be protected. 99% of the workers at the port will be Cubans and foreign investors applications will be scrutinised by the regulatory Office of the Mariel Special Economic Development Zone, which will report directly to the Council of Ministers of the Cuban government. All companies will have to pay a 14% social security tax and 0.5% of their income into a Zone maintenance and development fund, and a 1% sales or service tax for local transactions. Cuban workers must be recruited via a state-run employment agency. The Cuban state receives payment for their labour in hard currency and converts a proportion of this into (convertible or national) pesos for the payment of salaries. Foreign workers in the Zone will also have to pay the normal Cuban income tax rate.

The creation of new employment bolsters measures to streamline the state sector, as non-state sector employment has risen to 27% of Cubans (including cooperatives), up from 16% in 2010. This is part of a wider push for sustained economic growth, based on greater efficiency and productivity. The need to update and improve the Cuban economy was addressed in the Economic and Social Policy Guidelines of the Party and the Revolution published in November 2010. The Guidelines were approved in April 2011 at the 6th Congress of the Communist Party of Cuba, following debate among the Cuban population who made more than three million suggestions, resulting in changes to more than half the original draft (see FRFI 221). However, the Zone also emerges from long-standing plans to improve Mariel Port and follows visits by Cuban officials to similar zones in China, Vietnam and the Caribbean. Mariel is the largest and the first in a series of planned Special Economic Development Zones in Cuba.

Mariel could prove to be the greatest challenge yet to the illegal US blockade, which prohibits ships that dock in Cuba from entering US territorial waters for six months. The measure is a punishment and deterrent for third countries to prevent trade with Cuba. Several countries are moving to improve trade relations with Cuba, especially attracted by the new megaport and by Cuban deepwater gas and oil reserves. Mexico recently cancelled 70% of Cuba’s almost $478m debt. Russia cancelled Cuba’s disputed $29bn of Soviet-era ‘debt’. The Russian company Zarubezhneft plans to resume near-shore oil-drilling in Cuban seas this year. The Cuban government has improved repayments of its foreign debt as it seeks to attract more foreign capital for the infrastructural investments needed for national development.

In late March 2014, the National Assembly will discuss a proposed new Foreign Investment Law to replace the most recent laws, dating back to 1995 during the Special Period. Minister of Foreign Trade and Investment, Rodrigo Malmierca Díaz, commented: ‘it offers greater guarantees and incentives for foreign investment and ensures the attraction of capital which will contribute effectively to the objectives of sustainable development and recovery of the national economy, which today has a strategic connotation for the country’.

Andrew George

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