Interview with Cuba’s Ambassador Garmendía – Part III

embassy-cuba-canadaThe Embassy of Cuba in Canada in Ottawa. Photo: courtesy of the Embassy.

Foreign Investment, Economic and Infrastructure Changes in Cuba. And the Trump Question.

This is the conclusion of our interview with His Excellency, Julio Garmendía Peña, Ambassador of Cuba to Canada. In Parts One and Two, we discussed currency unification, wages, the new entrepreneurs in Cuba and Canadian business interests in Cuba. Here in the final segment of the interview, the Ambassador discusses foreign investment, economic and infrastructure changes in Cuba. We ended the interview with a question about U.S. President Donald Trump – on everybody’s mind these days. If you missed Part One, view it here. For Part Two, view it here.

Cuba Business Report: We’ve been reading in the press there are more and more MoU’s (memorandums of understanding) and agreements with other nations. Is there an increase in this activity since things changed in December, 2014?

Ambassador Garmendía:

For sure. A lot of companies from Europe, even from Asian countries have come to Cuba. In this period, it coincides with the new bill of Foreign Investment in Cuba and the decision of the Cuban government to create the Special Development Zone of Mariel which has special conditions for investments from foreign investors and different tax policies. It’s very convenient for investors so lots of people from all over the world have been coming to Cuba.

I wouldn’t say that the results are those that we expected, we still think there are many more opportunities and we have to be more, say, aggressive in the work with foreign investors. You have to understand that Cuba is an organized country and we have our priorities in foreign investment. That means we have identified projects and we have created a portfolio of possible projects for foreign investment that has been approved by the National Assembly.

It’s a difference with other countries of the region and of the world where any investor can come and decide to create a chain of McDonalds, or Starbucks or Tim Hortons. We are not going that way. We have identified clearly where we want to invest which is mainly, speaking in Marxist terms, in the first sector of the economy. That means the sectors of the economy that produces goods, factories, enterprises, services.

Cuba Business Report: Is there a race to get to Cuba for these foreign companies, to be set up in Cuba before the Americans get to Cuba?

Ambassador Garmendía:

It has been said, but I would have a different approach. Business is business, people see opportunities for business and now there are opportunities for business in Cuba. And international business can feel that, and they are coming with or without the Americans.

Of course, maybe in the consciousness of investors, there is something that says “Go Now” because it’s a good moment. They know that if tomorrow the embargo/blockade is lifted, many American companies will come as any other investor in the world but at the end of the day, those foreign companies from Europe, Asia, the Middle East, realize there are opportunities with the new Foreign Investment law and the Special Development Zone of Mariel and it’s a good time to come to Cuba and find those opportunities.

The Americans will come but they will have to participate in equal conditions that anybody else has to. They will have to compete. If there is a better technology from Europe, we will choose the company that responds to our needs. That’s the reality.

Cuba Business Report: Which country has the greatest presence in Cuba in terms of investments? I’d say Spain because I see Spanish hotels, Spanish wines, etc., most often.

Ambassador Garmendía:

Not only do they have lots of investments, you are correct, there are two or three hotel chains Sol Melia, Iberostar, and Barceló that have been present in Cuba for more than 25 years. They have been working with Cuban counterparts and they are very happy. There are also Spanish companies in other spheres such as food production, of course wine, mainly selling good Spanish wine, supplying spare parts for transportation, etcetera.

Cuba Business Report: What about the Chinese in Cuba?

Ambassador Garmendía:

China is also an important part of Cuban trade. I wouldn’t say they are higher than the Spanish, I would say they are participating well in the Cuban economy.We do have some interesting projects with China.

For example, in the sphere of biotechnology we have a joint venture with China but they are also an important trade partner. They supply, for example, locomotives for trains, they participate in other development of our railroads. Of course they participate with high tech in different ways. They are important partners for Cuba, but they are important partners in this world today for country.

Cuba Business Report: At last year’s FIHAV and at other times, both President Raul Castro and other Ministers have said there is a need to speed up the process of foreign investment? How’s this progressing in light of the need of foreign investment and increasing GDP?

Ambassador Garmendía:

I was telling you that for a period of time Cuba saw foreign investment as a complement to the economy. Maybe two years ago, Cuba decided that foreign investment should be an important part for the development of the economy. That’s why one of the measures we took was to change the legislation which comprised the 118 bill, as well as other instruments that facilitate and provide easier mechanisms for foreign investors to come and work with Cuban partners. Also the Mariel Special Development Zone.

In any case, we still are not satisfied with the speed that foreign investment is participating in Cuba’s economy. We should work harder I think. Even Raul said this in the National Assembly last December. That is why our Minister of Foreign Investment and Trade (Rodrigo Malmierca Díaz) is going abroad and explaining those opportunities. The Embassies also have the task to participate in different events and to explain to investors the opportunities that Cuba offers.

Cuba Business Report: I’m sure it’ll speed up once the embargo is lifted.

Ambassador Garmendía:

That’s one main obstacle. That’s a very important obstacle. If there wasn’t an embargo, the blockade as we call it, I’m sure that many companies, for example, Canadian companies that have a very important part of their business related to the U.S. will come to Cuba and work.

For example, Sherritt (International), came and they began to work in a factory that belonged to a U.S company before 1959. Of course, they were immediately sanctioned. The executives of Sherritt and their families cannot visit the U.S.

I think if you work, and this a message for Canadian companies, if you work in new investments, there is no reason legally for any American company or American justice system to apply any fine or measure for working with Cuba in different areas which are new products and businesses.

Cuba Business Report: Those are from the investment portfolio?

Ambassador Garmendía:

Yes the investment portfolio or even in trade. The bad news is that still it is not legal to make transfers in American dollars. So you have to find a way. We’ve had very good experiences working with Canadian banks to make the transfers in Canadian currencies. We have to find a mechanism, I won’t open them here, but those who want to work with Cuba have mechanisms created by Canadian banks that operate very efficiently.

You are an example of how the blockade functions. Some people think this is a theory that has been invented by Cubans. It is not. It is there, it works, it damages the Cuban people and others. And it damages the American people too.

We want you to have a vision of Cuba as a country is not perfect. We have lots of problems to solve. We have made mistakes. We have corrected. We are always willing to do better than we do, but in any case, the project that the Revolution has developed is mainly directed to the well-being of the people and sometimes we haven’t achieved that because we haven’t had a lot of resources due to the US blockade or our own mistakes.

But the reason of our project is the people and we work for the benefit of the people.

In recent years the Cuban Government has been working to improve basic services to the population, such as water supply. We have been doing important investments in some provinces we have had drought, like Las Tunas or Ciego de Avila. Last year it was almost everywhere. It’s not a drought, there is not enough underground water. You see everything green but there is not enough underground water for human use. So sometimes we have had the effect of the climate change.

We have been creating channels from province to province to carry water from one place to another. Huge investments that have led to an improvement in the water supply to the population. We also had very old system of water distribution, especially in Havana and we have had to renew all that. It’s a complicated process in a city like old Havana.

On the electricity supply, Cuba guarantees this service to the housing sector in 98% of its territory. I think you won’t find that in any other country of Latin America.

You know that one of the main incomes of Cuba today is not even tourism or nickel. It is services. Medical services. We have three ways of Cuban participation in the world healthcare. One of these ways is where we send our doctors and medical personnel to countries and we don’t receive any money. The second case is where the receiving country pays part of those services, countries that are middle income on different continents.

The third case is where other countries pay because they can afford it. Our doctors go to those places where local doctors do not want to go. That’s the case of Brazil and South Africa, for example. In Brazil we have today, as I’m sure you know, more than 5,000 doctors working in areas where Brazilian doctors do not go, in remote areas of Brazil in different states, mostly in the Amazon which is risky. But our doctors are ready for that.

Cuba Business Report: Thank you, Ambassador. I would like to finish this interview with ‘The Trump question.’ I have to ask this. It’s on everybody’s mind these days. If President Trump reverses Obama’s progress, will business as usual continue between Cuba and Canada?

Ambassador Garmendía:

I think history has proven that Canadian-Cuban relations have endured any conjuncture. There was no break and we will work together in one way or another. We appreciate very much the majority of Canadian companies that work with Cuba do that very seriously, very openly, and very respectfully. So we have the experience, as I said, of Sherritt which has been working with Cuba for more than 20 years.

They began trade in 1991 and then they created the joint venture. But in any case, that’s a good example, and now Sherritt is drilling for oil. Sherritt is now processing the accompanying gas with a very interesting project in two places near Havana and in Varadero. It is converting gas into propane gas for cooking.

We have these examples which are very good and speak very clearly about the relations can be created if there is a decision to work together.

We think that we are going to continue working with Canadian companies because we appreciate very much their will to work seriously with Cuba and even if tomorrow the blockade is lifted, we will continue working with Canadian companies.

We cannot put all eggs in the same basket in any case. That happened once and we had a very bad experience with the United States. In 1959 everything was American in Cuba, so we have to diversify our economy and that’s why we work with China, with Spain, with Russia and also with Canada. Of course, in the region we have good connections with countries, such as Mexico, Venezuela of course, Brazil, and others.

In relation to that, I would only like to say that we hope that common sense will prevail and our bilateral relations with the United States continues based on mutual respect, respect to sovereignty and not interference in internal affairs. We hope that.

Ambassador Garmendía, thank you.

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