Protests in Cuba threaten Spanish interests

Cuba lives the greatest wave of protests of the last 30 years. Since the Maleconazo of 1994 nothing like it had been seen. Thousands of Cubans have taken to the streets to demand food supplies, medicines and vaccines against Covid-19 despite facing arrests and jail sentences.

The pandemic is wreaking havoc on Cuban health and the economy, and seems to have pushed Cubans’ satiation to the limit in a country heavily dependent on tourism as the main source of foreign exchange. This social outbreak and its repression have put the hundreds of Spanish companies with interests on the island.

Protests in Havana against the Government.  (Photo by Yander Zamora / Anadolu Agency via Getty Images)

Protests in Havana against the Government. (Photo by Yander Zamora / Anadolu Agency via .)

Spain is the third commercial partner of Cuba –Only behind China and Venezuela– with exports that in 2018 and 2019 exceeded the 900 million euros, Although in 2020 they were reduced by 35% year-on-year due to the pandemic, according to data from the ICEX (Institute of Foreign Trade) attached to the Ministry of Industry.

Despite being a small economy, strongly centralized and with a low purchasing power, Cuba is a important market for Spain and was its sixth client in Latin America in 2020.

Economic and commercial relations, therefore, are very close and highly diversified, led by SMEs that export an average of around one million dollars a year in all kinds of products, among which capital goods, manufacturing, food and the automobile sector stand out.

A) Yes, Spain exports machines and spare parts for many sectors, electrical equipment, supplies for agriculture, hospitality, construction materials, food and spare parts for cars and trucks, among others, with a strong trade surplus versus the Cuban economy.

Beyond SMEs, the presence of large Spanish companies is also very broad on the island, especially in the tourism sector, in which Spain ranks first with firms such as Meliá, Iberostar, Be Live, Roc, Barceló, NH, Blau, Valentín or Sirenis.

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In total, ICEX estimates that some 275 Spanish companies are implanted in the Caribbean country. In addition, several of them are working for the development of large real estate projects associated with golf courses, such as Globalia, Atlantic Group Investment and La Playa Golf and Resort.

There are numerous Spanish companies in Cuba.  (REUTERS / Claudia Daut)There are numerous Spanish companies in Cuba.  (REUTERS / Claudia Daut)

There are numerous Spanish companies in Cuba. (. / Claudia Daut)

A consolidated business relationship

In this sense, investment flows are not negligible either. Investments in 2018 from Spain exceeded 400 million euros and the accumulated stock is concentrated fundamentally in four key sectors: the tobacco industry with 45%, accommodation services with 25%, commerce with 18% and financial services, which represent 6% of the total.

Thus, the main Spanish shares in the Caribbean economy are in tourism, air transport (handling of air cargo and aircraft maintenance), cement production, distribution of drinking water, production of cleaning products, perfumes and soaps or in industry tobacco, and dthey stake for their diversification along with investments from other countries such as Canada in the nickel industry (Cuba is the fifth country in world reserves) or France in the production of rum.

They are the reflection of a long tradition of strong economic relationships, despite the collection risk that foreign exporters and investors have to assume on the island, given that defaults only to SMEs Spanish companies were estimated at around 350 million euros at the beginning of 2020, according to the survey carried out by the Ministry of Industry of Spanish companies exporting to Cuba.

In the last decade, Cuba has started a modernization of its production process with liberalizing measures such as the sale of houses and cars, the acquisition of mobile phones, the increasingly widespread access to the Internet, as well as the entry of national citizens to hotels and foreigners to private homes, as the more than 140,000 Spanish visitors in the island.

It remains to be seen whether the Cuban regime continues with this opening process and if Spanish companies continue to be the protagonists of investments in Cuban soil.

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