Cuba reported this Monday new measures that substantially modify the role of foreign investment in domestic trade, in order to immediately increase the supply of goods to the population.
Ana Teresita González Fraga, first deputy head of the Ministry of Foreign Trade and Foreign Investment, explained on the Mesa Redonda news program that the decisions would be accompanied by evaluation and control mechanisms to ensure their effectiveness.
She pointed out that one of the provisions is to promote the development of businesses throughout the country to promote wholesale trade through foreign investment, an activity that until now has focused mainly on the production of goods and services; however, the creation of entities dedicated to marketing in the wholesale market is now being proposed.
She said that, in search of greater efficiency, it was agreed to selectively promote the creation of joint ventures to carry out retail activities.
Promoting foreign investment businesses aimed at the sale of raw materials, supplies and equipment, and the supply of finished goods, such as economical food and cleaning products, is another of the measures set out in order to overcome the existing shortage.
It was agreed, she added, the creation of joint ventures in the retail trade with the possibility of pre-financing national producers who have the conditions to become suppliers.
The liquidity to be obtained from taxes, and other income associated with these businesses, will be used to stimulate national production and support imports of economic products for their subsequent sale to the population in Cuban pesos.
Facilitate that the foreign investment modalities established in the country, dedicated to the provision of goods and services, can sell in the wholesale trade segment, to forms of non-state management, to non-governmental organizations, to embassies and to commercial representations based in Cuba is another measure.
The first deputy minister made reference to the complex scenario in which state-owned companies operate, whose restrictions when it comes to accessing foreign currency, due to the economic, commercial and financial blockade of the United States, generates shortages in the internal market and causes the development of spontaneous and informal marketing in the supply chain, and affect the rise in prices.
Although the government promoted the sale by consignment and customs warehouses to have goods in the country and the creation of micro, small and medium-sized state enterprises (MSMEs) specialized in foreign trade activity to non-state management forms, it persists in the country the lack of products for the population, he argued when announcing the new decisions.
In González Fraga's opinion, the measures should not be seen independently, nor as isolated actions, they are decisions that will lead to economic recovery, in correspondence with the updating of the Cuban economic model.
Mixed capital companies will be able to carry out retail trade in Cuba
As part of the announced package of economic measures of the Cuban State, aimed at expanding and diversifying goods and services for the benefit of the people, henceforth one of the modalities of foreign investment, companies with mixed capital, will be able to carry out retail trade in the country.
About the impact and uniqueness of this and other new decisions aimed at resolving the shortage of basic necessities, raw materials, equipment and supplies, demanded by the population and by non-state actors, they spoke today at the Betzy Díaz Velázquez Information Roundtable , Minister of Domestic Trade (MINCIN), and Ana Teresita González Fraga, First Deputy Minister of Foreign Trade and Foreign Investment (MINCEX).
The head of the MINCIN recalled that until now retail trade had not been considered in this last economic activity, while recognizing among its benefits how much capital a foreign entrepreneur or partner can contribute to the country, the usefulness of knowing and applying its management methods and knowledge of marketing, which is why it is necessary to take them into account.
She explained that Cuba has an extensive infrastructure or platform based on trade or concentration of resources, which includes more than 27,000 warehouses and some 1,900 refrigerators and more than two thousand retail units, not counting warehouses, many of which which are underutilized and in some deterioration.
For this reason, Díaz Velázquez highlighted the aspiration that non-state forms of management participate in retail trade, although some MSMEs already do so.
She announced as one of the measures adopted the elimination of the exceptional character of foreign investment in that network, without forgetting principles of the Cuban Revolution such as the defense or guarantee of social programs.
What it is about is that from now on, companies with mixed capital can become suppliers of raw materials, supplies and equipment, among other resources, and thus promote or invigorate the development of the country, and as part of that strategy promote the productive chain.
The head of the MINCIN highlighted the responsibility of the State to design the management models associated with foreign investment; we are not going to be closed, but we are going to follow up on this policy aimed at reversing the nation's complex economic situation.
She announced that joint ventures with joint ventures that can have access to retail trade throughout the country are being evaluated, and at first priority will be given to those partners, branches or foreign businessmen who have been in Cuba for years, who have remained here despite the adversities.
Regarding the MINCEX, González Fraga explained that state entities have been created to provide foreign trade services, under the legislation issued in relation to MSMEs, which have provisions that are more flexible in their operation than the rest of the state companies that today do foreign trade.
She insisted that the objective of the new measures is to facilitate that foreign investment modalities established in the country for the provision of goods and services can sell in the wholesale trade segment, including non-state management forms, non-governmental organizations, embassies, business representations and branches in Cuba.
Cuba facilitates foreign trade activity to the private sector
Cuba announced the authorization to certain non-state economic actors to carry out foreign trade activities directly, a new power that will be under the supervision of the Ministry of Foreign Trade and Foreign Investment (Mincex).
The first deputy minister of that organization, Ana Teresita González Fraga, ratified that the state monopoly of foreign trade will continue to be exercised by the Cuban State, who will establish the control and regulations associated with the activity.
However, he stated that it was approved to grant, exceptionally, the power to non-state forms of operating in foreign trade without intermediaries, taking into account various criteria.
Importation will be allowed, she specified, in cases in which carrying out this activity directly allows for the conclusion of advantageous contracts that contribute to obtaining goods and services with better conditions in terms of price; that is, approval will be given to those forms of management that subsequently market their offers at lower prices to the population.
Imports include only inputs, raw materials and equipment that allow private sector entities to fulfill their corporate purpose, and for this, the same mechanism stipulated in state companies will be followed.
González Fraga pointed out that in the case of exports, those entities of goods and services with the possibility of exporting, and in which direct sales abroad can increase their profits, will be allowed.
She reported that it is valued to start this operation for computer services projects.
We are in the greatest willingness to clarify doubts and concerns through the Mincex website and official accounts on social networks, said the first deputy minister.
The new decision is adopted without neglecting the steps to strengthen the 60 state companies linked to foreign trade, which have provided more than 14,362 contracts with non-state management forms, of which 252 are for export, for an amount of 21.4 million US dollars (USD).
She stressed that the creation of state-owned micro, small and medium-sized enterprises (MSMEs) will continue, especially outside of Havana, for the development of foreign trade.
For González Fraga, the approved decisions will encourage exports of goods and services and eliminate the main ones around them.
In turn, the government wants imports to be financed from the new flows received as a result of exports, so that they do not exert additional pressure on the country's demand for foreign exchange and, in the medium term, contribute to increase domestic production.