HAVANA, Nov. 24th (Reuters) – On a historic visit to Cuba, Spanish premier Pedro Sanchez vowed on Friday that his country would continue to increase investments there despite Cuba’s cash woes, illustrating Europe’s enduring interest in the opening market even as the United States pulls away.
On the second day of the first official visit by a Spanish leader to Cuba in 32 years, socialist Sanchez opened a Cuban-Spanish business forum in a hotel run by Spanish chain Iberostar and owned by Cuba’s military.
The administration of U.S. President Donald Trump recently added that hotel to a list of places banned to Americans as part of a tightening of the decades-old trade embargo on the island and partial reversal of his predecessor Barack Obama’s detente.
But Europe continues to forge ahead improving ties with Cuba, which over the past decade has sought to open up towards the West, update its centrally planned economic model and attract more foreign investment.
Various European countries including Germany and Portugal have opened up trade offices in Havana in recent years. Within the framework of the renegotiation of Cuba’s debt to the Paris Club of wealthy creditor nations, some have also agreed to establish countervalue funds to invest in the island.
The idea is that a percentage of the money owed these countries is discounted for local joint-development projects that will also help them get a foothold in the Cuban market.
At the inauguration of Friday’s forum, attended also by Cuban President Miguel Diaz-Canel, who in April succeeded Raul Castro, Sanchez said Spain’s countervalue fund was worth 415 million euros (367.1 million pounds).
He also noted that Spanish exports to Cuba rose 5 percent to around 900 million euros in 2018. Spain is Cuba’s third largest trade partner and one of its top investors, especially in the key tourism sector.
“The obstacles we encounter in the way will not interrupt nor slow down the increases in commercial and investment ties between our two countries,” Sanchez told the forum.
Spanish companies, like other foreign providers, have suffered delayed payments from Cuba in recent years as the country has faced a major cash crunch in the wake of declining aid from chief ally Venezuela and weaker exports.
This year, the tighter U.S. embargo is also affecting tourism revenue while Cuba faces a drop in income from the medical services it provides abroad. Earlier this month it severed its cooperation agreement with Brazil following criticism by far-right President-elect Jair Bolsonaro, and the first of thousands of Cuban doctors left Brazil on Thursday.
But Spanish corporate executives said at Friday’s forum that they were confident in the medium- to long-term potential of the Cuban market and hoped Sanchez’s visit would boost their business opportunities.
Those in the tourism sector said they were already benefiting from the boom of the last few years.
“We’ve had 18 percent growth every year since 2015,” said Ignacio Uriarte, whose medium-sized company Idurgo sells cutlery and porcelain to the Cuban tourism sector. “This visit can only help business further.”1