Sunday, August 29, 2010

Cuba moves to attract investors

Posted on Sat, Aug. 28, 2010
Cuba moves to attract investors
Changes could spark boom in golf courses.
By Will Weissert
Associated Press

HAVANA - Cuba has issued a pair of surprising free-market decrees,
allowing foreign investors to lease government land for up to 99 years -
potentially touching off a golf-course building boom - and loosening
state controls on commerce to let islanders grow and sell their own
fruit and vegetables.

The moves, published into law in the Official Gazette on Thursday and
Friday and effective immediately, are significant steps as President
Raul Castro promises to scale back the communist state's control of the
economy while attempting to generate revenue for a government short on cash.

"These are part of the opening that the government wants to make, given
the country's situation," said Oscar Espinosa Chepe, a state-trained
economist who is now an anticommunist dissident.

Cuba said that it was modifying its property laws "with the aim of
amplifying and facilitating" foreign investment in tourism, and that
doing so would provide "better security and guarantees to the foreign

A small army of investors from Canada, Europe, and Asia have been
waiting to crack the market for long-term tourism in Cuba, built on
drawing well-heeled visitors who could live part time on the island
instead of just hitting the beach for a few days.

It may also help the country embrace golf tourism. Investment firms have
for decades proposed building lavish 18-hole courses ringed by luxury
housing under long-term government leases. Cuba has just two golf
courses, and the Tourism Ministry has said it wants to build at least 10

Endorsing 99-year property agreements might be a first step toward
making some golf developments a reality but also makes it easy to
imagine a Cuban coastline dotted with timeshares, luxury villas, and
other hideaways that could serve as second homes.

Cuba has allowed leases of state land for up to 50 years with the option
to extend them for an additional 25, but foreign investors had long
pressed tourism officials to endorse 99-year lease deals.

"I think this is huge. This is probably one of the most significant
moves in recent years relative to attracting foreign investment," said
Robin Conners, CEO of Vancouver-based Leisure Canada, which plans to
begin construction next year on a luxury hotel in Havana.

But John Kavulich, a senior policy adviser for the U.S.-Cuba Trade and
Economic Council in New York, said: "I don't think it's going to open a

The decree allowing expanded sale of farm products, meanwhile, could
have far greater impact on ordinary Cubans. It authorizes them to
produce their own agricultural goods - from melons to milk, on a small
scale - and sell them from home or special kiosks on their property.

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