Cuba’s parliament has been summoned to a special session later this month to approve a new foreign investment law designed to strengthen guarantees to wary capitalists and help drag the island’s economy out of the doldrums.
But a headline Wednesday on the official Granma newspaper — “The Country Will Not Go On Sale” — made clear the communist government’s apprehensions about flinging the doors to foreign investment too wide.
The National Assembly of Peoples’ Power will hold a special session March 29 to analyze the proposed law, it was announced Wednesday. The rubber-stamp parliament, which usually meets only a few days in July and December, has never rejected a bill.
The government’s decision to send the proposal to the Assembly — the vast majority of measures are enacted by executive decree — appeared aimed at highlighting its interest in assuring foreigners that investing in Cuba will be safe, transparent and profitable.
José Luis Toledo Santander, chairman of the constitutional committee of the 612-member parliament that has been reviewing the bill, was quoted earlier this week as saying the proposed law will “reinforce the guarantees” offered to foreign investors.
More foreign capital means increased productivity and jobs on the island, which will in turn lead to increased exports that bring in hard currency and fewer imports that eat up the money, government officials have said.
Most details of the proposed law remain unknown, but it is expected to address several of the shortcomings of the current foreign investment law. That law was adopted in 1995, as Cuba was first trying to attract western capital following the Soviet Union’s collapse.
Foreign investors are currently limited to 49 percent ownership of joint ventures with the government, must hire from state-run labor pools and pay a 30 percent tax on profits and a 20 percent tax on labor.
Former Minister of the Economy José Luis Rodríguez has said that the proposed new law will “broaden the complementary character (to state investments) of the foreign investments” allowed under the existing law.
And Granma reported Tuesday that Assembly members discussing the bill have highlighted “the certainty that the modifications introduced … in no way will mean the sale of the country or the return to the past” capitalist times.
One of the key aspects of the proposed law for Cubans is expected to be the labor regulations, including salaries in a country where the average monthly salary officially stands at about $20.
Cuba reported 402 joint ventures in 2002. But the number plunged after the island, flush with Venezuelan subsidies, began giving preference to Venezuelan and Chinese enterprises and shuttering others for alleged corruption. It now has about 200 joint ventures.
The island’s economy has been all but stagnant for several years, and the violent protests against Venezuelan President Nicolás Maduro are highlighting the risks of losing the subsidies, including an estimated 115,000 barrels of oil per day.
Cuba reported a 2.7 percent growth in Gross National Product last year, low even though its way of counting GNP exaggerates the figure. Its Gross National Income ranked 26th out of 33 in Latin America and the Caribbean, a U.N report in 2011 showed.
Granma’s report Tuesday quoted Toledo as saying the proposed law — drafted by the Council of State, akin to a ministerial cabinet — also will establish a list of investments sought by the government and detail possible tax rebates and exemptions.
The special Economic Development Zone established last year in the port of Mariel west of Havana gives investors a 10-year amnesty on paying tax on profits but requires payment of other taxes and fees.
Toledo was also quoted as saying that Assembly deputies, provincial and municipal government officials have been meeting around the island this week to debate the proposed law.
“That way, we will get to the Assembly with the highest possible degree of clarity and consensus,” he said.