Cuba

Cuba is the largest island in the entire Caribbean. It consists of the islands of Cuba, Youthud and several other archipelagos and is located at the junction of three parts of America — North, South and Central.

General information

Official country name  — Cuban Republic. It covers an area of 110,860 km² (107th in the world). The population is about 11,395,433 people (as of the beginning of 2023).

Cubans — people of mixed origin. Before the arrival of the Spaniards, Cuba was inhabited by Indian tribes and Indians who migrated from Haiti. But as a result of the Spanish colonization, they were mostly exterminated. Then slaves were brought here from Africa. Their descendants make up 40%. Also, the nation was formed by mulattoes, mestizos, immigrants from Europe. Creole here refers to white natives of Cuba. A negro who did not master Spanish was formerly called bosal. Immigrants from Spain — Gallego (Galicians). From the end of the 17th century a large stream of French from Haiti and Louisiana, Italians and Indians from Mexico also arrived here. 

Cuba is basically a Catholic country, but the mixing of cultures from different backgrounds has led to a genuine religious syncretism when African religions mingled with Catholicism, forming the so-called Santeria. In addition, there are Protestants and adherents of other religions in Cuba.

The official language in the Republic of Cuba is Spanish, and given the high level of education of the population, its use is correct and with a wide vocabulary full of Cuban expressions. A significant part of the population also speaks English, and employees in the tourism sector also often speak German, French, Italian and Russian.

Spanish in Cuba was enriched by the language of the Taíno Indians, who inhabited the archipelago before the arrival of the Spaniards. It is necessary to take into account such a nuance that there are Spanish words that have a different meaning from that accepted in Spain and other Spanish-speaking countries.

The official currency of the country is the Cuban peso.

Havana — the capital and largest city of the Republic of Cuba, the political, economic and cultural center of the country. The rise of the city's economy has been observed since the 1970s. The export of local products from the seaport of Havana was established, as well as the import of various goods from other countries (the main partner of Cuba in the foreign market was the Soviet Union). With the assistance of the USSR, industrial enterprises, residential buildings, schools were built, roads were laid. In the Nuevo Vedado area, the Havana bus body factory was put into operation.

Also, the largest city of the island is — Santiago de Cuba. There is an oil refinery, a thermal power plant, a ship repair plant, a medical equipment factory, many food processing enterprises, as well as a seaport.

Camaguey — the third largest city in the country.

In administrative terms, Cuba consists of 15 provinces and one special municipality, Isla de la Juventud (subordinates directly to the central authorities, the rest - to local administrative structures). The provinces, in turn, are divided into 169 municipalities.

History, geography, culture, mentality

The official name of the Republic of Cuba has two versions of the history of origin. Some scientists believe that this word came from the language of the local Indian tribes, who called the fertile lands so. Others believe that this is how Columbus named this island at the time of its discovery, giving the island the name of a settlement with the same name in Portugal.

Mentions of the first inhabitants of Cuba date back to the 6th century. BC

The first European to arrive here was Columbus, who landed in the east of the archipelago in October 1492. In 1511, Diego Velasquez de Cuellar subjugated the indigenous population of the islands, built Fort Baracoa and became the first Spanish governor of Cuba. By 1514, seven settlements had been founded. Colonization took place in the conditions of struggle with the indigenous population of the island.

In 1823, the first independence uprising was crushed.

In 1868, the Ten Years' War for Cuban Independence began, the rebels were supported by the United States. In 1878, a peace agreement was signed, eliminating the most unpleasant legislative acts for the inhabitants of the island.

In 1895, a detachment of Cuban patriots landed in Cuba under the leadership of José Marti. This event was the starting point of a new war with the Spaniards, during which the Cubans gained control over almost the entire territory of the island, excluding major cities.

In 1898, the United States went to war with Spain and Cuba became dependent on the United States.

On March 10, 1952, Fulgencio Batista carried out a coup d'état and established a personal dictatorship.

July 26, 1953, a group of revolutionaries led by Fidel Castro attempted to capture the barracks of Moncada. The attempt was unsuccessful, and the participants in the assault ended up in prison, but this event became the starting point of the Cuban revolution. Political repression immediately followed. In 1955 the revolutionaries were granted amnesty. On December 2, 1956, a new group of revolutionaries landed from the yacht "Granma"; in the east of the island and began hostilities against the government of Batista.

On January 1, 1959, the dictator Batista fled Cuba. At that moment, the rebel forces occupied the city of Santa Clara in the center of the island and controlled large areas in the east.

As a result of the victory of the revolution, a left-wing government headed by Fidel Castro received power in Cuba, which then leaned towards the path of building socialism. The ruling and only permitted party of the country is the Communist Party of Cuba. The government of Fidel Castro carried out agrarian reform, the nationalization of industrial assets, launched broad social transformations, and the result of the process was the mass emigration of dissatisfied people, mainly to the United States, where a large diaspora of opponents of Castro and his policies was created. Emigration was facilitated by the "Cuban Act" adopted in 1966 by the US Congress.

From the early 1960s to the early 1990s, Cuba was an ally of the USSR, which provided it with significant financial, economic and political support, actively supported the Marxist rebels and the Marxist regimes of some countries of Latin America, Africa and Asia, and also pursued a policy of providing humanitarian assistance to various countries of the world.

With the collapse of the USSR, Cuba suffered huge economic losses (up to half of GDP), but by 1994 the situation had largely stabilized.

On February 19, 2008, Fidel Castro announced his resignation from the post of chairman of the State Council and commander-in-chief of the Cuban troops.

Miguel Diaz-Canel took over as president in 2019 instead of the abolished post of chairman of the State Council, and since 2021, the head of the Communist Party of Cuba. According to the Constitution, Diaz-Canel cannot remain in office for more than two terms, that is, after 2029

Cuba is located in the western part of the Greater Antilles. The country is located just south of the Tropic of Cancer, on the border of the Caribbean Sea, the Gulf of Mexico and the Atlantic Ocean. From the north of Cuba is the Strait of Florida (150 km to the USA), from the east — Windward Strait (77 km to Haiti), from the northwest — Yucatan Strait (200 km to Mexico), and 140 km to the south is Jamaica. The coast is characterized by deep bays and many coves. The island is framed by reefs and other coral formations.

There are many protected areas in Cuba, including Turquino Peak, Sierra Cristal and Zapata Swamp National Parks. The areas of the Viñales Valley, as well as the Alexander Humboldt and Desembarco del Granma National Parks, are part of the UNESCO World Heritage Sites in Cuba.

The culture of Cuba is a harmonious synthesis of several cultures: Spanish, African and Afro-Cuban. The influence of this is noticeable primarily in the architectural style and fine arts. In music, you can find African rhythms everywhere, lyrical Spanish serenades, incendiary Cuban rumba and salsa. Quite peculiar is Cuban poetry, reminiscent of the love lyrics of French and Spanish poets.

The main character traits of the inhabitants of Cuba — carelessness, friendliness, positive attitude to life and kindness to others. Cubans openly disregard the norms of decency adopted in European countries. For Cubans, there is one time — Today. Everything you can do that matters in life happens today. "Tomorrow" as a unit of time exists in a parallel dimension, so if you are told what they will do tomorrow — this is disappointing information. Various kinds of administrative bans in Cuba do not stand the test of real life, and therefore exist only on paper. Family prohibitions are perceived more as recommendations than strict instructions. But religious prohibitions — are strictly observed. Each religioso, that is, related to santeria, has its own, almost nominal, list of "must not and must."

Power

According to the form of government, Cuba is a socialist republic of the presidential-parliamentary type.

The Communist Party of Cuba, according to the Constitution, is the leading force of the Cuban state. The majority of deputies in parliament represent the Communist Party of Cuba. Executive power is exercised by the president (head of state), who is also the first secretary of the Central Committee of the Communist Party of Cuba. The government consists of the Council of State and the Council of Ministers. The government is formed by the unicameral parliament of the republic, called the National Assembly of People's Power. Parliament also elects the president. Thus, the National Assembly is the highest body of state power in Cuba.

Economy

The last few years have been some of the most difficult for Cuba in decades.

The Cuban government tried to carry out economic reforms.

The authorities made changes to the monetary policy, which, in particular, returned to the single currency. On January 1, 2021, a reform came into force that abolished one of the two currencies that have existed simultaneously on the island for the past 27 years.

These reforms also included the devaluation of the peso, the increase in wholesale and retail prices, the abolition of a number of government subsidies, the growth of wages and pensions. It is supposed to expand the influence of state-owned companies and decentralize the decision-making process. The government allowed companies to keep a large share of their export earnings rather than depend on centralized currency distribution.

One of the most contentious aspects of the economic reforms was the inconsistency of prices for goods and services with the announced increase in the wages of the population. The Cuban government announced a 500% increase in the minimum wage (in equivalent, according to the official national rate, it rose to $87.5). At the same time, prices for goods and services increased by five times or more. In fact, the purchasing power of the population has fallen sharply, and the consumer basket has lost even more positions.

In an attempt to overcome the negative effects of the reforms, the Cuban government expanded the spectrum of private business. Currently, the list of areas open to the private sector has been expanded from 127 to over 2000. The Cuban government has reserved the right to control only the country's strategic economic sectors, namely the media, health and defense. However, the problem still lies in the significant regulation of business activity and control by government agencies.

Since the outbreak of the COVID-19 pandemic, Cuba has experienced a sharp decline in the number of tourists. The reduction of the tourist flow, which is the main source of foreign exchange inflow into the country, has led to its deficit.

In 2021, the Cuban government managed to reach an agreement with the Paris Club of creditor countries on the transfer until 2022 of the annual debt payment, which is due from November 2022. Under this agreement, the Cuban government agreed to recoup the balance through annual contributions, which were divided by 2033.

Nevertheless, Cuba's economy is slowly developing today. In recent years, the volume of foreign investment has increased significantly. Today, agriculture, forestry and fisheries account for 5% of GDP (25% of the labor force is employed in these sectors), industry and construction — 34% (24% of the economically active population), services — 58%.

A significant leap has been made by the pharmaceutical industry, whose products are exported. The light and food industries, historically important branches of the Cuban economy, are constantly developing, and the products of these sectors are known all over the world. The sugar industry is the main branch of the Cuban economy. Today there are about 170 sugar factories in the country. Famous Cuban cigars are produced by 6 tobacco factories. There are enterprises of the textile and leather-footwear industry. The energy sector is developing.

Cuba has large deposits of copper ores, manganese ores, chromites, kaolins, iron ore, asbestos, rock salt, and phosphorites.

Business climate

Cuba's foreign trade is in line with certain indicators of an open economy, in particular:

• Foreign companies do not require an office or pre-registration to do business with domestic organizations;
• no import licensing, no import quotas;
• all products must be declared to customs and subject to inspection;
• import and export ban complies with GATT requirements;
• sanitary and phytosanitary rules are applied in accordance with international conventions and the rules of international organizations such as FAO and WTO;
• Payments must be made in major world currencies.

At the same time, there are special features:

• state monopoly on foreign economic activity;
• The public procurement market is closed and there is no information about its characteristics in terms of free access. The open auction procedure is not practiced — importers conduct closed bidding, there are no online bidding platforms and related web resources;
• Foreign companies must operate only through special Cuban state-owned companies (export and import) that have the appropriate license. In order to find such a firm, it is necessary to apply to the Cuban Chamber of Commerce, which, in accordance with the agreed code of conduct, can provide information with a list of relevant firms. The request must be accompanied by catalogs or other forms of sampling. The organization can then contact these companies directly;
• Commercial transactions in the territory of the Republic of Cuba are carried out by a Cuban import company or a commercial agent. Only after at least three years, provided by the Cuban Ministry of Foreign Trade and Investments, and if the trade turnover with Cuban structures is at least 500 thousand dollars, the company can apply to the Cuban Chamber of Commerce with a request to open a branch in Cuba;
• A list of Cuban companies used to import all types of products is posted on the website of the Cuban Chamber of Commerce
• Settlements for foreign trade transactions with Cuban companies are made in freely convertible currencies, with the exception of the US dollar. Due to US-supported economic sanctions against Cuba, US bank settlements are not possible.
• When cooperation is initiated by the Cuban side, contract payment terms are usually offered within 360-720 days. The issue of cooperation is accepted for consideration only if there is agreement to such conditions.

Investment climate

In order to avoid double taxation, Cuba has entered into agreements with Russia, Spain, Barbados, Italy, Portugal, Qatar, Lebanon, China, Vietnam, Austria, Ukraine and Venezuela, and also signed 63 Treaties on the promotion and mutual protection of investments.

Forms of business relations involving foreign investment:

1. Joint venture.
2. International economic association agreements including:
• contracts for the management of hotels, industries or services
• professional service contracts
• contracts for exploration under the risk of non-renewable natural resources
• contracts for construction and agricultural production
3. Companies with exclusively foreign capital.

A foreign investor can settle in Cuba:

• as an individual acting on his own behalf
• as a legal entity by establishing a Cuban branch of a foreign company of which it is the owner
• as a legal entity by establishing a branch of a foreign company

A general principle that provides for the modification of the special tax regime applicable to joint ventures and signatories of international economic association agreements, with the establishment of a special tax regime under the new foreign investment legislation.

The Mariel Special Development Zone (ZED ) is the first of its kind in Cuba and enjoys a privileged geographic location in the middle of the Caribbean Sea, at the crossroads of the main maritime trade routes in the Western Hemisphere.

The Governance of the Mariel ZED is a body under the Council of Ministers, which is responsible for its management, supervises its activities, is responsible for the development and implementation of its Development and Business Program.

ZED Mariel provides a world-class manufacturing and logistics platform that will increase national production, reduce import costs, accelerate growth, create jobs and facilitate foreign direct investment.

This is an area of national territory located in the north of the province of Artemisa, 45 km west of Havana, governed by special regimes and policies designed to attract investment in the production of goods and services with added value, using knowledge and innovation, as well as clean technologies that ensure the concentration of industry to replace imports, increase exports and create new sources of employment.

Products and services created in ZED Mariel can be traded with all legal entities registered in the country, inside or outside Mariel. Exports from Cuba are exempt from customs duties.

Business and investment support structures

The Chamber of Commerce of the Republic of Cuba is a state institution and plays an important role in the implementation of foreign economic cooperation between Cuba and foreign countries. It assists foreign companies in obtaining information, searching for partners, organizing business meetings and negotiations, participating in exhibition events. Information support to the subjects of foreign economic activity is also provided by the Center for the Promotion of Foreign Trade and Foreign Investments under the Ministry of Foreign Trade and Foreign Investments of the Republic of Cuba.

Legal services on issues of doing business in Cuba, foreign trade, customs, investment legislation, foreign investment regime and others are provided by state law firms. They can also provide legal support for projects on contractual terms.

GS1 Cuba represents in Cuba, through the Chamber of Commerce of the Republic of Cuba, the global organization GS1, the world leader in the development and promotion of standards for the exchange of information in the global supply chain. 

Legal regime for foreign investment:

• Law No. 118/2014: Foreign Investment Law
• Decree of the Council of Ministers No. 325/2014 "Regulations on the Law on Foreign Investments". 
• Regulations of the Central Bank of Cuba No. 46/2014 and No. 47/2014. 
• Regulations of the Ministry of Foreign Trade and Investments No. 128/2014 and No. 129/2014. 
• Decree of the Ministry of Labor and Social Security No. 16/2014. 
• Decision of the Council of Ministers No. 7567