Spider’s Web to Trap Investors

Spider's Web to Trap Investors / Miriam Celaya

Posted on April 4, 2014



HAVANA, Cuba – Some 53 years, 5 months and 17 days after the publication

of Law 890, which provided for the expropriation of many locally owned

and foreign firms, principally American, the regime just introduced the

new Foreign Investment Law that goes into effect in 90 days.



The new ordinance replaces the norms in effect since 1995, when the

sharpest and longest economic crisis suffered by the country forced the

country to turn to foreign capital investments in Cuba, despite the

purest principles of the Communist doctrine in which several generations

have been (de)formed at the hands of this government. By then, some

foreign businessmen were tempted to ensure themselves a space in the

virgin market, while others discovered the a true tax haven in the

Caribbean socialist inferno.



These capitalist outposts gave the regime the oxygen needed to overcome

the imminent asphyxiation, and also made possible Castro I's backing off

from the "opening" that had allowed the return of small private property

in the form of some family businesses–such as snack bars, restaurants

and rooms for rent, among others–that had rapidly expanded throughout

the island from the beginning of the 90s.



Now that foreign capital has ceased to be an evil that must be overcome

by socialism and has been converted into a "necessary good" called on to

boost the always promised and never reached "economic development of the

country" (Juventud Rebelde (Rebel Youth), Sunday 30 March 2014).



It's here that, among the surprises that the updating of the Raulist

model holds for us, Powerful Mr. Money is destined to facilitate "the

consolidation of Cuban socialism," which this time–yes, now!–will be

"prosperous and sustainable, thanks to that formerly demonized capital.

That other ancient bearded one, Karl Marx, must be turning in his grave.



Retrospective: the negation of capital



In 1960, Article 1 of Law 890 declared: Nationalization is carried out

through the forced expropriation of all industrial and commercial

businesses, as well as factories, warehouses, deposits and other

properties and members' rights of the same.



Under this law, the state appropriated 105 sugar mills, 18 distilleries,

6 alcoholic beverage factories, 6 soap and perfume factories, 5 dairies,

2 chocolate factories, one flour mill, 7 packaging factories, 4 paint

factories, 3 chemical producers, 6 metallurgists, 7 stationary makers, a

lamp factory, 60 textile and apparel industries, 16 rice mills, 7 food

factories, 2 vegetable oil makers, 47 food stores, 11 coffee roasters, 3

drug stores, 13 department store, 8 railroads, a printer, 11 cinemas and

film circuits, 19 construction-related companies, a power company and 13

shipping companies.



In subsequent months the expropriations continued, given that the

Revolutionary government had decided to "adopt formulas that finally

liquidated the economic power of the privileged interests that conspire

against the people, proceeding to the nationalization of the large

industrial and commercial companies that have not adapted nor can ever

adapt to the Revolutionary reality of our nation."



Spider Web to trap the unwary



At present no one seems to remember the aforementioned Law 890. Nor do

they allude to the fiasco of the entrepreneurs who dared to negotiate

with the Castros in the 90s and suffered great material and financial

losses in the adventure. Few earned the expected profits, much less kept

their businesses on the island. It's not known if there were

indemnifications, although there were definitely damages to public

opinion from the irresponsible actions of so many foreign investors and

of the Cuban authorities. The government has not publicly acknowledged

responsibility for its mistakes, and on the other hand, we Cubans have

not seen the benefits from theses inflows of capital. Nothing guarantees

we will realize them with the new legislation, the greatly over-used

"judicial guarantees" are not for us.



The rights and benefits of Cuban workers were also enunciated: "There

will not be free contracting of a labor force, so the figure of the

employing entity will be maintained, the wages will be conditional upon

the labor supplied, efficiency, and the value added that the company

generates." Furthermore, "The payment of the workforce will be

negotiated between the employing entity and the foreign capital company."



Thus, the State-Government, as the "employing entity," will continue to

be the owner and the Cuban employees the rented slaves, a detail that

should serve to alert potential employers, given that the chronic low

wages is the best incentive for theft and other forms of corruption,

common among us as illegal, but legitimate, methods of survival.



The new Foreign Investment Law has not yet been published or circulated

as a draft in tabloid form in recent days, so that the exact terms of

its text, considerations for parties, etc. are unknown. However, it is

expected to suffer some modifications to suit the needs of investors

interested in trading in Cuba. The cupola will have to cede or pass

away, but it will certainly seek huge profits.



It simply remains to be seem how many unsuspecting entrepreneurs fall

this time in the murky legal webs of Castrolandia. Forgive me if I don't

wish them success.



* Official Gazette of the Republic of Cuba (Special Edition Havana,

Thursday Oct. 13, 1960, Year LVIII, Vol Fortnightly, No. XIX).



Cubanet, 4 April 2014, Miriam Celaya



Source: Spider's Web to Trap Investors / Miriam Celaya | Translating

Cuba -

http://translatingcuba.com/spiders-web-to-trap-investors-miriam-celaya/