The Cuban army (Castro Inc.) and foreign investment

We've told you before that no one really invests in Cuba or does business with the Cuban people.  

In other words, no foreign investor is going down to Cuba and forming a joint venture with a private Cuban company to start a hotel or auto parts shop.  This is what you do in Mexico and most other Latin American countries. 

It is a little different in Cuba, as Sabrina Martin reminds us:

Foresight Cuba representative Jorge Calaforra tells the PanAm Post that the report is a summary of information available in several books about the Cuban army, as well as a document on the Cuban economy released by the Spanish Institute for Foreign Trade.

Calaforra says that the army runs every aspect of daily life in Cuba, and that ordinary citizens do not receive any benefits from these military-run businesses.

In order to establish a firm, a Cuban citizen would need a permit from the same government entity that has already granted privileges to MINFAR corporations in vast areas, such as tourism, remittances, and transportation, Calaforra explains.

“In Cuba, the production of goods and services does not benefit the common citizen, because he can only work for those companies through an employment agency that pays salaries in Cuban pesos, at a lower exchange rate,” he says.

Calaforra adds that ever since Fidel Castro took power, the Cuban state has focused on eliminating private enterprise and economic independence on the island. “If the Cuban government allowed citizens to advance economically, then they would lose political control. That’s why they keep the monopolies,” he says.

And this is why so many of us opposed opening Cuba without some concessions from the Castro regime.

So far, President Obama's opening has done, or will do, little to bring prosperity to Cuba.  This is because all of the new foreign investment is going to state enterprises under the Castro Inc. holding company.    

In simple language, President Obama's "change" has strengthened the Castro dictatorship with capital infusions and the legitimacy of a U.S. Embassy.

This is what we got from 18 months of negotiations with a dictator on his knees about to lose the oil subsidy from Venezuela and not able attract credit from other countries.   

"Obama to the rescue of the Castros" is the title of this movie!

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