One of socialism’s last men standing, Cuba has recently softened its stance on foreign investment. In a bid to attract capital to the stagnant economy, a newly proposed foreign investment law would cut taxes on foreigners in half to 15% and exempt most investors from paying it for at least eight years.
The country wants to also promise legal protection to foreign investors. As a general rule, foreigners have steered clear of investing in Cuba for fear of having their capital nationalized by the socialist regime.
The National Assembly is widely expected to approve the draft of the law with few changes.
In a time when the world’s “capitalist” countries are moving towards higher taxes and tougher regulations on investors, one of the last bulwarks of socialism is moving in the other direction.
To be sure, Cuba is not a free-market paradise by any stretch of the imagination. Yet after 50 years of living under the heavy hand of the Communist Party, the need for real reform is more apparent than ever. In 1959, Cuban GDP per capita was 2/3 that of the United States’. By 2010 that figure had dropped to less than 10%.
Investment matters. It creates the economic growth that raises our quality of life. Cuba’s change of heart demonstrates that the real living standard matters more than defunct ideologies.
(Originally posted at Mises Canada.)
