Cuba looking East again for trade
October 29, 2018
Good and at the same time surprising news made the round toward the end of September. There were reports about Cuba and the United States creating a joint venture in the biotechnology sector called Innovative Immunotherapy Alliance. The company was to develop medication and therapies for cancer.
New York Governor Andrew Cuomo, who had played a major role in getting the deal off the ground, hailed the joint venture as a historic move while talking to reporters.
And yes, it was a beacon of hope at a time when relations between the two countries had turned colder again, which will also be reflected at Havana's annual FIHAV trade show starting Monday (October 29).
Read more: New Cuban parliament draws up constitutional changes as cabinet named
Only three years ago, that fair clearly showed that the US and Cuba had edged closer together. There was a record number of US exhibitors, but the erstwhile euphoria has long gone.
This year around, there are only a handful of US exhibitors, Cuban Foreign Trade Minister Rodrigo Malmierca told the media in Havana, pointing out that 2017 was equally unsatisfactory, with only 17 US firms showing up at the fair.
Trump makes Cuba look East
Some four years after former US President Barack Obama's U-turn toward Cuba, a good deal of disillusionment has set in. On Donald Trump's watch, Washington has returned to typical Cold War rhetoric in its relations with Cuba. Some former measures to facilitate bilateral travel and trade have been revoked. Business deals with the Cuban military were prohibited.
Read more: Could Trump's Cuban policy switch backfire?
The current FIHAV fair is Cuba's hub for potential investors, while at the same time reflecting the country's economic developments. Only a couple of days ago, the Economic Commission for Latin America and the Caribbean (CEPAL) lowered its growth forecast for Cuba to 1.1 percent in 2018.
Cuba's closest ally, Venezuela, is supplying less oil, revenues from tourism are declining, and hurricanes and floods have caused major damage, meaning there's a mounting need for foreign investments. Cuban President Miguel Diaz-Canel misses no opportunity to point this out.
The Cubans are to present a new investment catalog at the trade fair. Last year, that document comprised a total of 456 projects with an investment volume of $10.7 billion (€9.4 billion). But in actuality, Cuba is still far from meeting its goal of attracting $2.4 billion annually in foreign investment.
German industry to open trade office
All in all, exhibitors from over 60 nations have confirmed their participation in the FIHAV fair. In Malmierca's eyes, this is a clear sign that "the world is at Cuba's side despite deteriorating economic, trade and financial relations with the US."
Among the most important exhibitors are traditionally those from Spain, Venezuela, China and Russia. The Germans will have their own pavilion, too. On top of that, Havana will later this week see the opening of an office to support trade with and investment in Cuba, with the deputy managing director of the DIHK trade group, Achim Dercks, to attend the event alongside representatives from several German ministries.
Read more: Russia again casts a long shadow over Cuba
Cuba's ties with Russia are expected to be given a boost at the fair. There will be a special forum for entrepreneurs looking into the prospects of closer cooperation in the fields of trade, industry and investments. Back in 2014, Russia canceled 90 percent of Cuba's debt toward the successor of the Soviet Union, with the remaining $3.5 billion to be redeemed through concessions applicable to future Russian investments in the country.
Russian oil major Rosneft for instance looks set to modernize Cuba's largest refinery in Cienfuegos, which is currently not operating at full power because of Venezuela's reduced oil deliveries.
In addition, both countries signed a package of agreements in September 2017 on the modernization of Cuba's energy and railway sectors as well as on the supply of elevators. There are also accords in place on food processing and textiles. Russia is also to supply trucks, buses and trains.
It's also worth noting in this context that the Cuban president is due in Russia later next week for his first state visit. Cuba is clearly looking East again.