(Havana) The Cuban government has announced that it will allow foreign investment in wholesale and retail businesses, in an attempt to solve the chronic shortages that the country is experiencing.
Posted at 7:37 p.m.
“In the face of the strong restrictions we are facing, foreign investment in wholesale and retail trade, with state regulation, will make it possible to expand and diversify the offer to the population and contribute to the restoration of the national industry,” Economy Minister Alejandro Gil tweeted on Tuesday.
The Cuban government will, however, retain its monopoly on foreign trade.
Until now, foreign investments in Cuba were only allowed in the production of goods, services, as well as in a few sectors of activity such as the hotel industry.
Under the new measures, wholesale businesses may be 100% owned by private investors, but retail businesses will remain subject to the island’s mixed economy regime, in which the state must retain a participation.
Controlled by the state, the commercial sector in Cuba has great difficulty in capturing foreign currency and obtaining supplies. Cubans are forced to stand in long lines to buy food and other basic necessities in Cuban pesos in state stores where supply is very limited.
Stores where it is possible to pay in dollars started operating in 2019. The offer there was generally wider, but their shelves also began to empty in recent months due to shortages.
This situation favors the black market and feeds the inflationary spiral. In 2021, consumer prices had thus increased by 70% over one year, according to official figures.
In August 2021, the Cuban government had already authorized small and medium private enterprises, ending 52 years of state monopoly.
Cuba is currently going through its worst economic crisis in thirty years, aggravated by the pandemic and by the embargo imposed on the island by the United States for sixty years.