CubaNews / October 2002
By Larry Luxner
HAVANA — French investment in Cuba totals around $300 million, making France the fourth-largest foreign investor in the island after Spain, Canada and Italy.
That’s according to Pierre Sella, economic attaché at the French Embassy in Havana. Sella told CubaNews that Spain accounts for 25% of the $5.4 billion foreign investment here, followed by Canada (20% of the total), Italy (19%) and France (5%).
The leading French investor here is Pernod-Ricard, which has a 50-50 joint venture with the Cuban government to produce, distribute and market Havana Club rum around the world. Other major French companies present in Cuba include oil conglomerate TotalFinaElf, telecom giant Alcatel, hotel groups Accor and Club Med, and two major banks: Société Generale and BNP-Paribas.
France is a major source of tourism for Cuba, sending 140,000 to 150,000 visitors a year to the island. And when these tourists arrive in Cuba, they can choose from several French-managed resort properties.
Accor manages four hotels in Cuba: the 427-room Novotel Miramar; the 178-room Sofitel Sevilla City Center, along the Prado in Habana Vieja; the 300-room Mercur Coralia Cuatro Palmas in Varadero, and the 385-room Coralia Club Playa de Oro, also in Varadero.
The Novotel is owned by Gaviota, a unit of the Cuban armed forces, while the last three properties are owned by Gran Caribe.
Paris-based Club Med manages a 300-room hotel in Varadero, which is owned by Gaviota. And French construction conglomerate Bouyguis has a venture with Gaviota to build three additional hotels in Holguín, Varadero and Cayo Coco at a cost of $50 million each.
Sella, who was transferred to Havana two years ago from Morocco, said Cuba represents a “very big potential” for French investors compared to other Caribbean islands, “but there’s a special situation here because Cuba is isolated” and hasn’t opened its economy enough.
“Everyone knows the problems here,” Sella told us. “The main problem is a dysfunctional bureaucracy.”
Are there are any signs the situation is improving? “I can’t say. For foreign investors, it’s still difficult,” he said, though he added that Paris and Havana enjoy a “very good relationship, compared to Cuba’s relations with the United States.”
Yet bilateral trade seems to be suffering. During the first six months of 2002, the value of French exports to Cuba came to 102 million euros, a 9% drop from the 112 million euros reported in the same period last year. In the case of food, exports tumbled by 40%.
Sella blames that drop on food purchases from the United States, which may top $150 million this year, up from virtually zero in 2000.
“The major French export to Cuba is grains,” he said. “It’s cheaper and makes more sense for Cuba to buy from the States.”
But Sella says he’s not particularly worried that the Americans will eventually squeeze French exporters out of the Cuban market.
“It’s obvious that in the future, relations between the United States and Cuba must improve,” he told CubaNews. “We’re preparing for this change with a new distribution of our exports in favor of capital goods for industry, infrastructure and transportation. It’s normal that Cuba would want to diversify its suppliers, and we’re preparing for that.”