Amid Cuba’s ongoing economic struggles, businesses from Mexico, Colombia, Brazil, and beyond are doubling down on their long-term commitment to the island. A growing private sector has helped foreign firms maintain sales, and the recent Havana International Fair (Fihav) highlighted the resilience of these partnerships.
A Glimpse into the Current Landscape of Foreign Trade in Cuba
As Cuba grapples with a deepening economic crisis, foreign companies remain optimistic about their prospects on the island. During a tour of the Havana International Fair (Fihav) on Tuesday, multiple Latin American business representatives shared their perspectives on doing business in Cuba. They confirmed that, despite the mounting challenges, their firms are committed to a long-term strategy.
The crisis—marked by chronic blackouts, inflation, and a skyrocketing public deficit—has made navigating the Cuban market more difficult. Yet, many foreign firms are seeing the emergence of private businesses as a positive development, which has allowed them to maintain sales in a volatile environment.
Ariel Morales, from Mexico’s Hidrogenadora Yucateca, an edible oils and fats exporter, believes the expansion of the private sector has been crucial to their success in Cuba. “If we didn’t have the private sector, we wouldn’t be exporting the amount we are exporting to Cuba today,” he stated. However, he acknowledged that the volume of private-sector purchases still lags behind those of the state. The private sector is not yet large enough to match the scale of state-driven demand, Morales explained, but it is a vital piece of the puzzle.
Colombian Poultry Firm Sees Growth as Cuba’s Private Sector Expands
Colombian businesses are also tapping into this growing private sector. Alejandro Cabrera, manager of Avícola Santa Elena, a Colombian poultry company, noted that they have experienced steady growth in exports to Cuba. Since July, the firm has shipped 10 containers of eggs each month to the island, and Cabrera expects that this figure will soon become their standard.
Eggs are in short supply on the island, with private stores charging more than 3,500 Cuban pesos for a carton of 30. Given that the average monthly salary in Cuba is around 4,500 pesos, this price tag is high for most consumers. However, as demand continues to grow, companies like Avícola Santa Elena are hoping to become more prominent suppliers in the coming months. “It has been a very good experience that has opened the market to all Colombian poultry farming,” Cabrera said, underscoring the potential for further expansion.
Cuba’s reliance on foreign imports for food staples has created opportunities for companies willing to navigate its challenging business climate. With an increasing reliance on private-sector purchases, these firms are tapping into a market that was once dominated by state-run enterprises.
The Continuing Challenges of Doing Business in Cuba
Despite the opportunities, foreign firms continue to face substantial challenges. For instance, Brazilian entrepreneur Leonardo Ferreira, representing the Brazilian Interunion, which exports equipment to the sugar industry, expressed that while difficulties are inherent in any international business venture, working with Cuba is no different from other countries.
The Cuban sugar industry, once a key pillar of the nation’s economy, has seen a steady decline over recent decades. Yet, Ferreira remains confident that his company’s equipment can help boost the industry, even as the country’s economic situation worsens. “There are always difficulties working with other countries, but we manage very well,” Ferreira said.
Indeed, the situation in Cuba remains difficult, with inflation tripling formal market prices over the last four years. These challenges have fueled an unprecedented migration wave, as many Cubans seek better opportunities abroad. However, despite the economic uncertainty, Latin American businesses seem committed to continuing their operations on the island. For some, like Mexico’s Hidrogenadora Yucateca, the private sector offers a glimmer of hope.
Cuba’s Economic Future Depends on Foreign Investment
Cuban authorities have made it clear that foreign investment is key to the country’s economic recovery. The Fihav, with over 700 exhibitors from 63 countries, is a sign of the Cuban government’s ongoing attempts to attract international partners. Spain, Mexico, China, and Russia have shown strong representation at the event, with Spain leading the charge with 63 companies. While the Cuban government’s push for investment is evident, the country still faces significant hurdles, including a public deficit, inflation, and political restrictions that affect the overall business climate.
The growth of Cuba’s private sector, however, may provide some hope for foreign companies looking to make inroads. With the state sector in decline, the rise of private businesses presents an opportunity for firms from countries like Mexico and Colombia to maintain and even grow their presence on the island. As the situation evolves, it will be interesting to see whether Cuba’s private sector continues to thrive and whether more foreign firms choose to expand their operations in the country despite the challenging environment.
Despite the ongoing crisis, Cuba’s push for foreign investment and the rise of private business activity seem to be slowly altering the landscape. Though the economic and political challenges remain, these foreign companies are resolutely focusing on the long-term potential of their business dealings in Cuba.
