Information Technology in Cuba
Investors from Canada, Spain, Italy, United Kingdom, Japan, France, Israel, Italy and Mexico have entered into binding agreements to participate in the future of Cuba .
There are several firms that provide Cuba with access to growth capital. The Centro de Promocion de Inversiones (CPI), a state-owned enterprise, is a member of the World Association of Investment Promotion Agencies (WAIPA), based in Geneva. CPI facilitates investments in a variety of economic sectors (including technology) by seeking co-partners and joint ventures for Cuban firms. Cuba Trust, a privately owned company, offers individuals the ability to place assets under professional fee-for-service management and participate confidentially in global markets. Maceo Marti, also privately owned, offers professional asset management and investment banking to global investors.
Cuba recently became a member of the International Chamber of Commerce (ICC). As a result, Cuba now has full privileges in the ICC and is able to utilize all ICC resources available to members promoting international trade and investments. The ICC has encouraged Cuba to continue to open up to private enterprise and eschew dominant state controlled enterprises. The 2000 annual meeting of the ICC was held in Cuba in October.
Cuba has also become a full member of the Latin American Integration Association (ALADI). ALADI aims to pursue the promotion and regulation of reciprocal trade, development of economic complementarity, and support of actions for economic cooperation to encourage market expansion with its member countries (66). Cuba now has an opportunity for increased trade and exchanges with other ALADI members in Latin America.
Cuba's E-Commerce Commission is pushing the idea of a Cuban venture capital industry. Cuba believes the venture capital model is valid, even if the funds come from a state-owned bank, and envisions providing everything from incubators to the technical assistance commonly provided by venture capital firms (67).
The Cuban government does not have substantial economic resources with which to fund IT investments. Subsequently, the Cuban government seeks to create as much of an internal IT infrastructure as possible while actively soliciting foreign direct investment (68).
Foreign Direct Investment
With the collapse of the Soviet Union in 1991, Cuba lost its financial aid estimated at $5.6 billion annually, which maintained its economy (69). Cuba thus began to seek additional sources of foreign aid to bolster its flailing economy, as it does have international relations with over 160 countries. The Cuban government decided to focus on actively soliciting foreign direct investment (FDI). The Cuban government allows foreign entities to own 100% of the equity in FDI ventures. Estimates of FDI in Cuba range between $1.1 billion to $1.4 billion (70).
However, foreign investors are constrained by the Cuban Liberty and Democratic Solidarity Act (also known as the Helms-Burton Libertad Act), which provides for sanctions for those who "traffic" goods expropriated from U.S. citizens. As of March 1998, fifteen foreign companies have been exclude from entry into the United States for conducting business with Cuba in violation of international trade sanctions (71). Foreign investors must be aware that conducting business with Cuba may prevent any business dealings with the United States, and companies considering Cuban investment must weigh the benefits and consequences of Cuban investment on a global scale.
The Cuban Ministry of Foreign Investment and Economic Cooperation (MINVEC) publishes a listing of the 20 main economic sectors in which FDI is welcomed. The list is created by ministries and other official organizations of the Cuban government. These sectors include tourism, communications, science and technology, construction, and agriculture (72).
However, without encouragement for private sector activity and the creation of capital and labor markets, the Cuban government will have great difficulty attracting FDI and creating a Cuban information society.
Stocks and Bonds
We were not able to find any information regarding a local stock exchange in Cuba. Most firms in Cuba are at least partly state-owned and as such are not active in the stock markets.
If corporate Cuba is rebuilt, Cuba might be able to have a regulated securities exchange within 10 years, if for no other reason, to allow liquidity for all the joint ventures and investors pouring billions of US dollars of capital investments into Cuba.
Until recently, Government of Cuba bonds were traded on the New York Bond Exchange but these bonds are in default at this time. These bonds can be purchased through European investment houses (73).