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MINVEC: Joint ventures dropped from 403 to 342 in 2003
CubaNews / February 2004

By Larry Luxner

Cuba had 342 active joint ventures at the end of 2003, down from 403 when the year began, says the Ministry of Foreign Investment and Economic Cooperation.

That’s a 15% drop and the first decline since such ventures were legalized more than a decade ago. A more rigorous approval process for partnerships with foreign companies — not to mention the ongoing political spat with the European Union — were apparently to blame for the drop.

MINVEC’s minister, Marta Lomas, told reporters in January that despite the smaller number of mixed enterprises, income and exports rose 13% in 2003, while profits per dollar invested were higher than in 2002.

According to Lomas, Spain accounted for 98 ventures, more than any other country, followed by Canada (52), Italy (51), France (15), Mexico (11), China (10), United Kingdom (9), Germany (9) and Panama (8). That compares with 2002, when Spain had 105 ventures, Canada 70 and Italy 57.

Only seven ventures were established during 2003, down from 24 in 2002; on the other hand, said MINVEC, Cuba had 313 cooperative production agreements in place last year, up from the 270 reported a year earlier.

MINVEC’s own statistics show that around 80 of the joint ventures now active are operating beyond Cuban shores.

These J-Vs include a guayabera shirt factory in Namibia, a Coppelia ice-cream plant in Malaysia, a “Bodeguita del Medio” restaurant in Dubai and stakes in two hotels at the Mexican beach resorts of Cozumel and Cancún.

The University of Miami’s Institute for Cuban and Cuban-American Studies (ICCAS) says one-fifth of the island’s J-Vs are now incorporated or operating abroad, whether in Latin America, Africa, Asia or Europe.

“Cuba’s policy of promoting overseas investments bespeaks a tacit acknowledgement that the current economic climate within Cuba is less than attractive for many firms, including those owned and run by the Cuban state itself,” ICCAS said Dec. 19.

“With more than 20% of foreign direct investment now directed towards business activities and joint ventures outside of Cuba, and negligible net inflow of foreign capital within Cuba itself, Cuba’s state-owned enterprises have realized that they too can obtain a better return on investment elsewhere.”

Even so, in 2003, the number of business visitors to Cuba jumped by 46% to 3,242. They came from 85 nations, led by the United States, Mexico, Brazil and South Korea.

In spite of the tense relations between Cuba and the 15-member EU, British, Italian and Spanish executives continued to arrive; so did representatives from Eastern Europe, mainly Russia, the Czech Republic and Bulgaria.

Among MINVEC’s most important achievements of 2003, said Lomas, were the reopening of cooperation in terms of credits for development, as well as stronger trade links with Vietnam and China.

In fact, Chinese firms are negotiating to participate in nickel mining, rubber production and oil prospecting in the Gulf of Mexico.

Soft credits for development projects approved in 2003 came to $429 million. Of that total, China contributed $9 million. The Organization of Petroleum Exporting Countries (OPEC) granted another $10 million for upgrading irrigation systems, while Kuwait gave a similar amount for improving water supplies in the province of Santiago de Cuba.

On another subject, Lomas said Cuba maintains 876 collaboration projects with 165 countries in health, education and sports. In addition, 120 joint commissions have been formed to periodically review existing programs and implement others.

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