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Special Development Region Coming to Cuba

By: Fergus Hodgson - @FergHodgson - Sep 20, 2013, 5:38 pm

The Cuban Council of State has announced a “special development zone” (una zona especial de desarrollo) for Mariel Harbor of Artemisa Province. As reported by Radio Angulo, once implemented, the officials may well replicate this first zone, and the objective is to increase international trade, enable the adoption of updated technology, and generate employment opportunities.

Those formalizing the idea, after adoption from the Cuban Communist Party, made the details available late on Thursday. While the announcement was scant on policy and heavy on hopes, the law will go into force in just over a month, on November 1, and it will cover 465 square kilometers (180 square miles). This area will have distinct laws from the rest of the island, although there appears to be the option to remain under conventional Cuban laws, should individuals wish to do so.

Most notably, and paradoxically, the port will receive US$900 million in state investment, including US$640 million loaned from Brazil.

“Mariel is a modern port for deep-sea vessels . . . and [with this enlargement] Mariel aspires to be the main entry and departure point for goods shipments of Cuban trade. It is the most important development for investment at present in the island,” the state television channel explained.

This initiative is an acknowledgement of failure in the conventional policy realm of Cuba, and it presumably comes in response to terrible press associated with foreign investors and their experiences on the island. That includes a man from the United Kingdom who had to flee after 16 months in jail on false fraud and spying charges.

Zachary Caceres, chief information officer with the Startup Cities Institute of Universidad Francisco Marroquín, believes that the “rule of law and economic openness are key drivers of growth and prosperity.” However, he is concerned that the reforms will fail to bring results because of their limited jurisdiction.

“If Cuba’s new Special Development Zone can create and maintain responsible reforms in law and governance, the people of Cuba can start to break out of years of stagnation.

Unfortunately, the zone appears to be limited to import [and] export concerns. Cuba should double down on their stated commitment to ‘sustainable economic growth’ and ‘innovative technology’ by creating several more zones to compete with Mariel. Competition will make sure that zones remain responsible to tenants.

Zones could also be used to create new schools, residencies, and countless other benefits for the nation. Mariel may be a start, but the prosperity of all Cubans will require a broader commitment to openness and good governance.”

Fergus Hodgson Fergus Hodgson

Fergus Hodgson was the founding editor in chief of the PanAm Post, up until January 2016, and he now studies finance at Tulane University in Louisiana and Francisco Marroquín University in Guatemala. Originally from New Zealand, he has also lived in Argentina, Canada, Colombia, Ecuador, Ireland, and the United States. Follow @FergHodgson and his Facebook page.