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The U.S. government issued a public warning to international investors on Tuesday regarding the risks of doing business in Cuba, describing the island's economic system as a “rigged environment that benefits the regime and its affiliates.”
"Cuba is not open for business — it is rigged for the regime's cronies," wrote the Office of Western Hemisphere Affairs of the State Department on its official account on platform X (@WHAAsstSecty).
According to the statement, the Cuban government requires foreign companies to form joint ventures where the state claims at least 60% of the profits, while the remainder is "retained" and is rarely distributed to the foreign partners.
Furthermore, it points out that the regime has a history of defaults and manipulating contractual conditions to its advantage.
The official publication emphasizes that the true obstacle to the economic development of the island is not the external sanctions, but rather internal corruption, lack of transparency, and market manipulation by the Cuban state.
“Money does not flee Cuba because of the outside world. It is frightened away by the corruption of the regime,” the message stated.
This statement coincides with the publication of an official report from the State Department that holds the regimes of Cuba and Venezuela responsible for their respective economic crises, attributing them to decades of corruption, mismanagement, and authoritarianism.
In the case of Cuba, the report denounces that in 2024 the regime allocated more than 37% of its entire investment to tourism and hospitality, in contrast to minimal investment in health and education, despite the profound shortcomings faced by the population.
It is also noted that military conglomerates such as GAESA concentrate economic control and could privatize key assets for the benefit of the ruling elite.
Although the government of Havana has not officially responded to the new U.S. statement, it is likely that it will mirror its usual rhetoric about the economic blockade, accusing Washington of trying to strangle its economy and sabotage its international trade relations.
Frequently Asked Questions about the U.S. Warning to Investors in Cuba
Why does the United States warn foreign investors about doing business in Cuba?
The United States warns that the Cuban economic system is designed to benefit the regime and its associates, forcing foreign companies to form joint ventures with the state, which appropriates at least 60% of the profits. The regime also has a history of defaults and manipulation of contractual conditions.
What risks do foreign investors face in Cuba?
Investors face risks of corruption and lack of transparency in Cuba. The Cuban state manipulates the market, appropriates most of the profits, and rarely pays its debts, which makes the business environment unappealing and risky.
What is the true obstacle to economic development in Cuba, according to the U.S.?
The true barrier to Cuba's economic development is internal corruption and state manipulation of the market, not external sanctions. The Cuban regime prioritizes the interests of the ruling elite over the well-being of the people, which hinders sustainable economic development.
How does the prioritization of tourism affect the Cuban economy?
The prioritization of tourism in Cuba has resulted in a disproportionate investment in this sector, to the detriment of key areas such as health and education. Despite low hotel occupancy rates, the regime continues to allocate substantial resources to tourism, reflecting an economic policy that is stagnant and disconnected from the real needs of the population.
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