August 28, 2010 in Nation/World

Cuba makes market reforms

Foreign leases, private vending controls eased
Will Weissert Associated Press
 
Associated Press photo

A woman waits for customers to sell bananas inside her home in Havana on Friday.
(Full-size photo)

HAVANA – Cuba has issued a pair of surprising free-market decrees, allowing foreign investors to lease government land for up to 99 years – potentially touching off a golf-course building boom – and loosening state controls on commerce to let islanders grow and sell their own fruit and vegetables.

The moves are significant steps as President Raul Castro promises to scale back the communist state’s control of the economy while attempting to generate new revenue for a government short on cash.

A small army of investors in Canada, Europe and Asia have been waiting to crack the market for long-term tourism in Cuba, built on drawing well-heeled visitors who could live part time on the island instead of just hitting the beach for a few days.

It may also help the country embrace golf tourism. Investment firms have for decades proposed building lavish 18-hole courses ringed by luxury housing under long-term government leases. Cuba currently has just two golf courses nationwide.

Endorsing 99-year property agreements might be a first step toward making some golf developments a reality.

“I think this is huge. This is probably one of the most significant moves in recent years relative to attracting foreign investment,” said Robin Conners, CEO of Vancouver-based Leisure Canada, which plans to begin construction next year on a luxury hotel in Havana and also wants to build hotels, villas and two championship golf courses on a stretch of beach in Jibacoa, 40 miles to the east.

The decree allowing expanded sale of farm products, meanwhile, could have far greater impact on ordinary Cubans. It authorizes them to produce their own agricultural goods – from melons to milk – and sell them from home or in kiosks. They must pay taxes on any earnings.

The decree is the first major expansion of self-employment rules since Castro said in an address before parliament Aug. 1 that the government would reduce state controls on small businesses.

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