Cuba bets on special economic zone to spur development

Just over three years ago, Cuba began to map out its most ambitious economic development project ever, the Mariel Special Economic Development Zone (ZEDM).

The 465.4-square-km development zone located some 45 km west of Havana is designed to promote sustainable growth by attracting foreign investment, technological innovation and industrial production.

"The ZEDM aims to become the main enterprise and driving force of the Cuban economy," Oscar Perez-Oliva, the project's business assessment director, told Xinhua in a recent interview.

"It's also an opportunity for companies from different regions of the world to position their production and service facilities, so they can enter the Latin American and Caribbean region," he said.

Mariel features a duty-free zone, an industrial park with modern facilities, business-friendly tax breaks, and a strategically-located deep-water port.

The economic zone is already home to 23 enterprises from Brazil, Mexico, Spain, France, Portugal, Belgium, Holland, Vietnam and South Korea, as well as some domestic firms.

"Currently we have 13 companies that are 100-percent foreign-owned, four Cuban corporations, five joint ventures and one international economic partnership. Eight firms are already operating, either manufacturing their products or providing services," said Perez-Oliva.

Companies at the ZEDM are involved in everything from biotechnology to industrial production of food, consumer goods, packaging materials and construction technologies.

"We are interested in attracting technology that can be assimilated very quickly by our highly skilled Cuban labor force and contributing to raising levels of productivity and efficiency," Perez-Oliva said.

However, most of the companies are in logistics, banking and transportation, providing services to companies moving in or building production plants.

"To date we have approved projects worth more than 960 million U.S. dollars and when fully operational, these 23 users will generate more than 4,000 direct jobs," added Perez-Oliva.

Foreign companies may be drawn by tax breaks and other benefits, but they also see Mariel as an opportunity to gain a foothold in an important regional market.

Vietnam's Thai Binh Investment Trading Corporation plans to set up a plant to manufacture baby and adult diapers, and sanitary pads for women, products in high demand in Cuba and the rest of the region.

Vi Nguyen Phuong, deputy director of Vietnam's Thai Binh corporation, told Xinhua, "the Cuban government's policy in the special economic zone of Mariel is very attractive, so we decided to expand our business in the island to the field of investment after 20 years of selling products here."

Meanwhile, Jose Garcia, business director of Financiera Iberoamericana S.A, a joint Cuban-Spanish firm that will finance projects at Mariel, said the island is a market with "strong opportunities" and "Mariel is the main stage for Cuba's economic development."

Without a doubt, Mariel's geographical location at the crossroads of international maritime traffic in the Caribbean is one of its biggest draws.

South Korea's ArCo 33, which specializes in the production of medical devices, has its eye on the larger regional market.

"Cuba imports 100 million disposable syringes a year. We are going to cover that demand by installing a factory in Mariel and we are planning in the future to export our products to the Caribbean, and Central and South American countries," said Ki Se Lee, president of ArCo 33.

The Cuban government has pledged to guarantee an average investment of 300 million dollars a year in the Mariel special economic zone, said Perez-Oliva.

The Caribbean island country is also looking to attract around 2 billion dollars in foreign investment each year.

source: Xinhua