The Cuban government will allow foreign investment in the wholesale and retail trade. The Ministry of Internal Trade announced this on Tuesday announced. Cuban stores are facing severe shortages of crucial products such as food and fuel. The announced measures should have an “immediate effect” on those deficits, says Foreign Trade Minister Ana González Fraga.
While foreign investment in Cuban goods and services was already allowed, that was not yet the case for investment in wholesalers, which with the introduction of the new rules may become wholly owned by foreign entities. The Cuban retail sector remains largely state-owned, but the Ministry of Internal Trade announced that it would allow public-private partnerships in that sector. Wholesale and retail has been completely state-owned since the Cuban communist revolution of 1959.
The island’s closed economy is going through a severe recession, partly caused by the corona pandemic. The tourism sector on the island has been hit hard by the measures to contain the virus. Since Russia’s invasion of Ukraine, few travelers have come from Russia, while they accounted for about 40 percent of all tourism in Cuba, virtually stopped – European countries closed their airspaces, making flights to the west barely possible .
The US sanctions, which were briefly eased under former President Barack Obama and relaunched by his successor Donald Trump, are also weighing heavily on the local economy. The decision to allow foreign capital must “contribute to the recovery of national industry”, wrote Deputy Prime Minister and Minister of Economy Alejandro Gil Fernández on the government decision.
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