This Associated Press headline is priceless: “Cuba hopes detente will finally break curse on investment.” What curse is that? After the Castros expropriated pretty much all the private property on the island, foreign investors have been reluctant to risk their capital by investing in a broken-down Communist economy. Funny how that works.
The AP includes a brief history lesson:
After he seized control of Cuba in 1959 and nationalized the U.S. companies that owned much of the island, Fidel Castro built a centrally planned socialist economy dependent on billions in annual subsidies from the Soviet Union.
Left unexplained is why a planned socialist economy couldn’t get along without foreign subsidies.
After the Soviet collapse, Cuba replaced those billions with highly subsidized Venezuelan oil from socialist ally Hugo Chavez.
The sinking of the Venezuelan economy…
Funny, too, how Cuba’s socialist benefactors bite the dust one after another. There is only one hope left:
…has left Cuba looking to fill its budget gap with post-Obama tourism and investment from the profit-driven world of international capitalism.
Seems like there might be a lesson lurking there somewhere, but don’t hold your breath waiting for the AP (or Bernie Sanders) to figure it out.
Not surprisingly, investing in Cuba hasn’t proved easy so far:
All told, the new projects appear nowhere near the more than $2 billion a year in foreign investment Cuba says it needs to drag itself out of a decades-long cycle of anemic productivity and over-dependence on imports.
That’s one way to describe socialism.
It’s impossible to know how far Cuba is from reaching its target. For one of the world’s least transparent governments, even basic information on the annual rate of foreign investment remains a national security secret.
“We have to protect our statistics, our data with lots of care,” said Jose Chaple, director of commercial policy for Latin America and the Caribbean for Cuba’s Ministry of Foreign Trade. “This is part of defending ourselves from attacks.”
Like other Communist countries, Cuba has been good at cranking out statistics–never mind whether they correspond to reality. It will take them a while to adjust to a world in which reality actually makes a difference.