Foreign investiment in socialist Cuba: Significance and prospects

In February 1982, Cuba’s Council of State approved legislation that authorized some forms of foreign investment in the island. The legislation was largely ignored by foreign business that for nearly a decade showed scant interest in investing in Cuba. However, in the 1990s, foreign investiment in socialist Cuba has increased rapidly. The first part of the article gauges the economic significance of foreign investment in the context of the financial needs of the country. The second part touches on a number of issues that have a bearing on the further growth of foreign investment in Cuba. The article concludes with some general observations on the impact of foreign investment on the Cuban economy and prospects for the future. Jorge F. Pérez-López is an international economist with the Bureau of International Labor Affairs, U.S. Department of Labor. His writings on international economics issues— especially on the Cuban economy—have appeared in professional journals and several edited volumes. He is the author ofThe Economics of Cuban Sugar (University of Pittsburgh Press, 1991),The Cuban Second Economy: From Behind the Scenes to Center Stage (Transaction Publishers, 1995), and editor and contributor ofCuba at a Crossroads (University Press of Florida, 1994). He received his Ph.D. in Economics from the State University of New York at Albany. The views expressed in this article are those of the author alone.