ZEDM: The Engine of the Cuban Economy that Stagnated Before Moving Forward

The Business Administration Group S. A. (Gaesa), the military conglomerate in Cuba, took over the supervision of a port and development zone megaproject in 2011 that is now run by former military judge Ana Teresa Igarza Martínez. In 2014, the container terminal of the Mariel Special Development Zone (ZEDM) was inaugurated with claims of being a vital hub for foreign trade in Cuba by then-president Raúl Castro. However, ten years later, the ZEDM has failed to live up to its promises and faces uncertainty.

The initial investment for the project came from a loan from Brazil that was granted to Cuba through construction company Odebrecht. The construction of the port was backed by the Brazilian government, but later Odebrecht was implicated in a corruption scandal involving several Latin American countries. Even though Cuba officially denies any involvement in the scandal, Brazil has ordered an investigation into the loan given to Cuba.

Despite the positive outlook at the beginning, the ZEDM has not attracted the expected foreign investment needed to boost the Cuban economy. Only a fraction of the required investments have been made, and the zone has struggled to attract businesses and create jobs. The Cuban government introduced a new legal framework for foreign investment in 2014, offering favorable conditions, but the project has failed to take off as expected.

Ana Teresa Igarza Martínez, the general director of the ZEDM, boasts about the infrastructure and businesses established within the zone, but the actual figures reveal a different story. The project has not attracted the necessary investments and has not achieved its intended goals of boosting the economy through foreign capital.

Several economists and experts have highlighted the reasons why Cuba is not an attractive destination for investments. The lack of confidence in the government’s economic policies, financial instability, and high risk for investors are some of the factors deterring potential investments in the country. Additionally, the strict regulations and uncertainties surrounding US sanctions make the Cuban market unappealing for foreign businesses.

The delays and hurdles faced by companies operating in the ZEDM, as well as the Cuban government’s rejection of potential investors, have hindered the success of the project. The high expectations set for the Mariel Special Development Zone have not been met, and the Cuban economy continues to struggle with shortages and economic crises.

Without significant structural reforms and a commitment to creating a business-friendly environment, the ZEDM and other economic initiatives in Cuba are unlikely to succeed.