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In Cuba, No Oil, No Reforms—Yet

There were hopes that the reforms Raul Castro’s government enacted last year would herald a new era in Cuban politics, one that welcomed foreign investment in an open economy. No such luck so far.

Joint business ventures between Cuban and foreign companies have foundered as the government has chosen instead to reexamine or cancel existing foreign investments in Cuba:

Four joint ventures controlled by two Canadian trading firms are in the process of being “liquidated”. The top two executives in a British fund, Coral Capital, which says it has invested $75m in Cuba—much of it in the luxurious Saratoga hotel—are being held, although not charged with any offence, on suspicion of corrupt practices. Another target—Max Marambio, a Chilean businessman and friend of Fidel Castro—fled the country after being charged with corruption last year.

There were hints that significant reserves of oil had been discovered offshore, but the first test well examined last week by the Spanish oil company Repsol came up dry. Reports suggest they missed the reservoir, and other tests will be conducted soon. The U.S. Geological Survey estimates that five billion barrels of oil lie under the seabed in Cuba’s waters.

The discovery of significant recoverable reserves could strengthen the government and its interests rather than weaken them. But hindering foreign investment is the surest way the Castros can keep Cuba tied to Venezuela and stuck on the periphery of the modern, global economy.

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  • Walter Sobchak

    I have said before and I will say again, it is time to kick the “Fairplay for Cuba Committee” out of the national policy apparatus. The US must tell the Castro brothers that it is time to retire, and the US must establish a liberal democracy in Cuba.

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