Havana | Reuters –– Cuba has postponed plans to adopt a new foreign investment law from March to at least April, a Cuban government official told visiting diplomats this week, as a final version is being fine tuned before adoption by the National Assembly.
Cuban President Raul Castro announced in December that the National Assembly would adopt the new foreign investment law in March.
But the official state-run media has in recent weeks taken to saying that the law, which has been cloaked in secrecy, would be adopted sometime during the first half of this year, without further explanation.
Foreign Trade and Investment Minister Rodrigo Malmierca told the visiting European education commissioner, Androulla Vassiliou, of the decision to postpone adoption until April during a meeting earlier this week, a member of Vassiliou’s staff said.
The postponement was also confirmed by Western diplomats who requested anonymity.
The ruling Communist Party passed a more than 300-point plan to revamp the economy in 2011, which includes moving 20 per cent of the state labour force to a non-state sector made up of farms, small businesses, co-operatives and joint ventures.
But for two years, Cuban authorities have gone back and forth as to whether a 1990s law would be amended or a new law passed to attract investment, which is at levels well below that of Cuba’s neighbours.
“After many years of delays and apparent internal divisions, it seems that not even Raul has been able to break the deadlock within the top echelons of the Communist Party… where certain revolutionary principles and bureaucratic practices clash with the nation’s desperate need for foreign capital and technology,” said Richard Feinberg, author of a number of studies on Cuban reforms and foreign investment and a nonresident senior fellow of the Brookings Institution.
Under the current foreign investment law, foreign firms pay a 30 per cent profits tax and 20 per cent labour tax, though the labour tax is gradually being reduced.
Cuba’s economy grew 2.7 per cent last year and is expected to slow this year due to a lack of hard currency for imports and capital for investment.
Cuban economists estimate the country needs to expand at a five to seven per cent rate to develop.
— Marc Frank reports for Reuters from Havana.