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Fdi Risk Analysis Of Cuba

2365 words - 10 pages

Dianet Perez Garcia
Politics of International Investment
May 1, 2012

Foreign Direct Investment Risk Analysis on Cuba

Background: Cuba is an island in the Caribbean. La Habana is the capital of Cuba and its biggest city. Cuba is not an industrialized country and it mainly consists of farms. Cuba is the largest island in the Caribbean and the most populated with a population of over 11 million people. Cuba is a totalitarian communist country and has been ruled by Fidel Castro since 1959. Raul Castro has succeeded Fidel Castro and is now president. In 2008 Fidel Castro renounced his presidency after becoming ill and passed his presidency on to Raul Castro, his brother and Vice ...view middle of the document...

Although you may own a business at any time the government can expropriate you and is not responsible for indemnification. However, they are open to doing business with outside investors.
3. View of Political Leaders 4 2
of Foreign Firms
Raul Castro has allowed for more openness in recent year to foreign investment. Nevertheless, once again the government can seize your property at any time with out cause.
4. Major Political Events 5 7
In 2008 Fidel Castro, who was the dictator of Cuba since 1959, fell ill therefore gave up his power to his brother Raul Castro, much like a royal family would. There is no way to tell what will happen with Raul Castro, more specifically if something where to happen to him. Although, in 1988 Pope John Paul II visited Cuba and asked the government if they would allow its citizens to observe Catholic holidays like Christmas and be able to take a day off of work. As of April 27th, 2012 Cubans are now permitted to observe Good Friday, thanks to the request of Pope Benedict. In the future I do see Cuba being in major chaos do to the lack of plans they have following Raul Castro’s presidency.
5. Democracy 7 5
Cuba has no democracy, there is one central power and it is Raul Castro. All property in Cuba is owned by government. There is no freedom of speech being that TV, Radio and all other media outlets are owned and control by government.
6. Tension with US 5 3
Currently Cuba has some tension with US due to the Cuban Embargo. The US refuses to trade with Cuba because they are a member of and follow regulations of ILO (International Labor Org.). ILO regulations specify that when an employer receives payment for a product produced by their employees they must pay their employees directly and accordingly, however if a company exports a product from Cuba they pay the government and the government then pay the employees, it is up to the government’s discretion to decide what to pay the employees. In Cuba’s case they end up being underpaid. Also US citizens are not allowed to visit Cuba unless, they have family in Cuba, are travelling for religious reasons, journalist, work or as a student. The tensions have lessened since Obama decided to open communications with Cuba however it is still not safe to travel.
7. Support for Government 7 4
There is little to no support for Cuban government. There are currently political prisoners and human rights movements that are not legally recognized by the government. Also Cuba has government agencies similar to KGB of Soviet Union, which strictly investigates and under covers people opposed to government, this they refer to as security of state. This is something I am hopeful will change followed by more freedom for Cuban citizens.
8. Influence of Anti-Business 5 3
The government allows foreign business but has full...

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