The Current Situation of Foreign Investment in Cuba

Since the early 1990s, Cuba has experienced serious economic problems that resulted from the demise of the Soviet Union and the disappearance of the Council for Mutual Economic Assistance (CMEA), the economic and financial system in which the island was inserted. At end of the 1980s, some 81% of Cuba’s external commercial relations were with the member countries of the CMEA. In 1989, Cuba exported 63% of its sugar, 73% of its nickel, and 95% of its citrus to these countries. Similarly, imports from CMEA countries represented around 85% of Cuba’s total imports: 63% of food, 86% of raw materials, 98% of fuel and lubricants, 80% of machinery and equipment, and 57% of chemical products.2 The end of traditional trade partnerships with the Soviet Bloc proved to be disastrous for the Cuban economy. Between 1989 and 1992, the total value of Cuba’s exports fell by around 61%, while the same figure for imports fell by around 73%.3