NCPA - National Center for Policy Analysis

Castro Is Still No Capitalist

August 5, 1996

Under the new Helms-Burton law, the executives of Canadian, Mexican and European firms that traffic in American properties nationalized by Fidel Castro can't do business in the United States.

Critics say the law, like the U.S. trade embargo itself, deprives Cuba of liberalizing contact and trade with the outside world.

But other analysts suggest that rather than subverting Castro's regime, foreign investors reinforce his grip on power. That is because there is very little capitalism involved in foreign investment in Cuba:

  • The average Cuban is forbidden to own private property.
  • All deals with foreigners must be negotiated with the government, without competitive bids from or partnerships with private parties.
  • It's illegal for Cubans to ask foreign-owned mines or hotels for a job, and all foreigners agree in advance to hire through the national employment agency controlled by the Communist Party.
  • Foreigners don't even pay Cuban workers directly -- they pay the agency a per-worker fee, almost all of which goes to the Castro regime.

The governments of foreign investors are sometimes involved. For instance, Saskatchewan's government invested almost $250,000 in York Medical, which markets Cuban-made drugs and medical equipment, and subsidizes testing in a public hospital.

Americans still have billions of dollars in outstanding claims for properties nationalized by the Cuban government in 1959. And foreign firms are profiting today from American investments there. For example, the Canadian metals firm Sherritt International -- one of the largest investors in Cuba -- manages the nickel mine Moa Bay, built by a U.S. firm for $75 million. Company executive Ian Delaney comments, "Doing business with a dictator has been a rewarding personal and business experience."

Source: Charles Lane, "Canada Sly," New Republic, August 5, 1996.

 

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