US Cuba crackdown will choke tourism and private firms
HAVANA: US President Donald Trump says tightening restrictions on American business and tourism in Cuba will help the island’s people and small private businesses, but analysts warn it will do the opposite.
The US president framed it as a move against a ‘cruel and brutal’ regime: bypassing the state military-run business group Gaesa to channel investment to the people. But in Cuba, cutting out the armed forces means undermining the tourism sector, which is largely controlled by Gaesa but also supports many small, private businesses.
“The new measures will attack the only sources of growth that the Cuban economy currently has: tourism and the private sector,” said Pavel Vidal, a Cuban economist at Pontifical Xaverian University in Colombia.
“The companies under military control are decisive for the operation of tourist services. If you restrict its capacity to receive foreign investment and make international payments, the economy is sure to suffer.”
Cuba’s state Business Administration Group (Gaesa) manages some 50 hotels, chains of shops, construction, communications and distribution firms and the major port of Mariel west of Havana.
Run by Luis Rodriguez Lopez-Callejas, son-in-law of Cuba’s President Raul Castro, Gaesa is involved in joint ventures with several foreign firms that have driven a tourism boom on the island, including the Marriott hotel chain.
Since taking over the running of the country just over a decade ago, Castro has been gradually expanding the private sector and trying to open up the country to foreign businesses. — AFP