Today’s ailing Cuban economy is marked by high labor costs, low wages and small inflows of foreign investment. In 2011, under President Raúl Castro’s leadership, the government started instituting reforms to open the economy. Positive developments in international tourism, nickel and cobalt mining, and high value-added agriculture serve as foundations for future growth. But progress made to date has yet to take full advantage of the plethora of competing sources of capital offered by today’s more diversified global economy. In order to remain competitive and preserve quality social services, Cuba could learn from its own experiences with joint ventures and free trade zones, and from the experiences of other developing countries, to harness foreign capital as a vital tool of national development. Will President Barack Obama, in his second term, take advantage of Cuba’s economic opening to forge a new path for relations with Havana?
On December 10, the Latin America Initiative at Brookings hosted the launch of a new study, “The New Cuban Economy: What Roles for Foreign Investment?” by Brookings Nonresident Fellow Richard Feinberg, professor of International Political Economy at the University of California San Diego. The report explores the role of foreign capital in the future of the Cuban economy, including recommendations for Cuba, the United States, and international financial institutions. Feinberg was joined by Diego Ruiz, vice president of Global Public Policy and Government Affairs for PepsiCo, Inc., and Christopher Sabatini, senior director of policy at the Americas Society and Council of the Americas. Senior Fellow Ted Piccone, deputy director of Foreign Policy at Brookings, provided introductory remarks and moderated the discussion.