Cuba bids for foreign investment to tackle goods shortages
Cuba will allow foreign investors to invest in its wholesale and retail trade for the first time in 60 years. This move overturns a 1960s Fidel Castro policy of nationalizing retail. Cuba is facing its most severe economic crisis in decades causing rising prices and increasing public discontent.
The change in foreign investment policy is hoping to tackle shortages of basic goods, while not fully opening trade. Foreign investors will be able to wholly or partially own Cuba based wholesalers. The move is hoping to expand and diversify the supply to the population and allow the domestic industry to recover. Government officials say they will prioritize deals with businesses selling green energy technologies and equipment that could increase domestic production. There will be no market competition at first. Cuba’s economy has been struggling due to the coronavirus pandemic, lower subsidies from Venezuela, and restrictions and sanctions placed on the island by the US during President Donald Trump’s term. Those sanctions were relaxed in May, something Cuba’s foreign minister welcomed as a small step in the right direction.