Onerous Restrictions That Impair Cuba’s Access to Foreign Investment


Jorge Dominguez is a well-established Latin American scholar who recently retired from Harvard University as Antonio Madero Professor for the Study of Mexico. Also focused on the Caribbean, Jorge Dominguez edited the book The Cuban Economy in a New Era: An Agenda for Change Toward Durable Development (Harvard University Press, 2017).

Speaking about the significant challenges Cuba faces on its way to liberalization and a higher standard of living, Dominguez drew attention to obstacles placed in the way of foreign direct investment. With the Mariel Harbor freeport in existence for five years, those few companies that have gained authorization to operate in the free zone are not able to directly contract with Cuban workers. Investing in a medium-sized Cuban opportunity requires hiring all Cuban employees through a Cuban state-owned enterprise. Only after the state-owned enterprise has pooled and selected candidates, is the company able to choose the workers it needs.

The end result is that international companies are not given a level of “freedom of choice” that meets their threshold requirements for risky investments abroad. Beyond this, there is the issue of “sheer paperwork,” with so much bureaucracy involved at every decision-making level that it is difficult to make even modest projects coalesce in a timely manner.

Cuba’s FDI-Linked Agricultural Export Potential


Biotech and FDI Seen as Key Drivers of Cuba’s Economy

Jorge Dominguez

Interviewed on The Cuban Economy in a New Era: An Agenda for Change toward Durable Development, a work he co-edited, Harvard professor Jorge Dominguez in July 2018 brought focus to the economic underpinnings that impelled Cuba to expand its tourism and services export sectors over the past decade. Jorge Dominguez also explored the nation’s three-decades-long efforts to create a world-class biotechnology sector.

With Cuba’s applied science program operates at the highest level, the business side of its biotech endeavors has been underwhelming. For instance, there is not enough client-informed knowledge of how to accomplish tasks such as producing deliverables on time. With efforts underway to improve business practices, whether it will ultimately be successful is still unclear.

Another major thrust in Cuba’s strategy is obtaining needed capital through attracting foreign direct investment (FDI), which was not encouraged under former president Fidel Castro. With Castro’s son Raul, his successor, having made forays into FDI, it remains to be seen whether new president Miguel Díaz-Canel can make good on his promise to accelerate FDI. Areas in which the impact could be felt significantly include agriculture and biotech, with partnerships in the latter area potentially bringing about improvements to business practices.