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Cuba Moves Towards Capitalism
Is Cuba Walking the China Line?

Cuba wants a piece of the foreign direct investment pie. Standing next to Brazilian President Dilma Rousseff last week, Raúl Castro announced the unveiling of a $900 million program of upgrades to Cuba’s Mariel seaport. The improvements put the Mariel bay, historically known as a common departure point for ramshackle refugee boats, at a world-class level on par with two of the Caribbean’s most active ports, Freeport, Bahamas and Kingston, Jamaica. Even more than just physical infrastructure, the Castro regime intends to turn the surrounding 180 square mile area of the port into a “Special Development Zone.” The model for this proposed business-friendly area is similar to that of the various Special Economic Zones that Deng Xiaoping established in post-Mao China: Government economic regulation is minimized and foreign firms operate with relatively few restraints. Is Castro’s plan indicative of a new Socialism with Cuban Characteristics? The NYT:

“It’s a very substantial, very serious project,” said Philip Peters, a Cuba analyst at the Lexington Institute, a libertarian think tank in Washington.

“It has an integrated commercial strategy attached to it: It’s big in the context of the Cuban economic reforms.”

The island’s Communist government has already taken some baby steps down the capitalist road, issuing private business licenses, ending controls on car sales, and making promises to dump the unpopular dual-currency system. According to the Guardian, public excitement is palpable:

[María Vitória Bernase, a Havana-based economist] says the changes constitute an economic revolution: “We’re modernising everything now. You can see the change in daily life and on the streets, where people are opening restaurants and small shops … There’s been such an explosion in the past year that we haven’t been able to fully quantify it yet.”

The port has attracted the attention of several countries, including China, Malaysia, and Angola. American law, however, still prevents U.S. businesses from working on Castro’s turf.

It’s hard to say what this all means for the future of Cuba, and what direction Castro intends to take the country. But as we’ve written in the past, Cuba is looking to restructure its state-run economy in a similar image to that of the Middle Kingdom’s: China’s skyscrapers and Olympic stadiums may come from capitalism, but the communists still hold all the cards. This model is appealing to the Castros’ socialist regime, and the announcement of the Mariel Special Development Zone still fits neatly with this kind of plan.

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