By the Blouin News Business staff

Brazil and Cuba launch new Port of Mariel project

by in Americas.

Cuban President Raúl Castro and Brazilian counterpart Dilma Rousseff unveiled a container terminal, the first phase of the overhaul, on January 27.

Cuban President Raúl Castro and Brazil’s Dilma Rousseff officially open the container terminal. Photo: CELAC

Economic ties between Brazil and Cuba cover a wide collection of sectors yet the bilateral agreements are unique – as is common for countries dealing with the Communist island. On Tuesday South America’s largest economy, which suffers a severe shortage of doctors in poor and remote areas, received a new wave of qualified Cuban physicians — around 2,000 — as part of a program to hire foreign physicians called Mais Médicos (More Doctors). Cuba has received in return its over $900 million in infrastructure investment disbursed by Brazil to renovate the island’s Port of Mariel, approximately 28 miles west of the city of Havana, the capital. Cuban President Raúl Castro and his Brazilian counterpart Dilma Rousseff unveiled a container terminal, the first phase of the overhaul, on January 27.

Cuba (eagerly) anticipates the port will kick-start a new era of foreign investment by which to turn the island into a regional commerce hub. But the countries elite, headed by Raul Castro, know the port isn’t enough to lure in foreign investment commerce. Its future is deeply connected with a special economic zone established around the Port of Mariel. Foreign firms will see a free trade zone established within the 180 square miles of the Port, including tax and customs breaks for them and a space where foreign-owned factories can produce goods for other markets (it has the capacity to handle 800,000 containers a year). See it as Cuba’s biggest point of entry yet into global capitalism (they present it as the main gateway for the Cuban foreign trade). Fitting, given that it served as the site of a massive boatlift of Cuban emigrants to the U.S. in 1980.

With the first phase of the port’s overhaul, the biggest infrastructure project in the island in decades, Cuba is trying to initiate a new era. It’s trying to brand itself as an opening Communist country. The situation resembles a similar moment in China’s recent history, when over thirty years ago they began creating special economic zones with a similar intent. A recent visit from a Chinese senior legislator suggests that China will collaborate in Cuba’s economic “modernization.”

But the success of Cuba’s adventures in capitalism hangs largely on the United States lifting its economic embargo on Cuba, an idea many regional observers see gaining some traction. This might become inevitable if the European Union normalizes relations with Cuba after 17 years of restricted policy, something that could happen in the next months.

While the emergence of more democratic politics on the Caribbean island — the lack of which is the main reason for the embargoes — remains far-off, the Port of Mariel could give international governments leverage when dealing with the Cubans. One way or another the port will bring Cuba back from isolation.

Indeed, the island is advancing in its regional positioning. January 28 saw Havana host the Community of Latin American and Caribbean States (CELAC) summit, with most of the 33 heads of state that form the organization in attendance. None of the regional leaders met with any opposition groups or their high-level members — a diplomatic victory for Castro. Timing couldn’t have been better as many of these countries will likely express their interest in investing on the special economic zone. Brazil is currently making the biggest play for position in Cuba — and with Venezuela, Cuba’s second-largest trading partner after China —  at such a weak point it’s picked the right moment. The Port of Mariel renovation was financed largely by the Brazilian development bank BNDES and built by Odebrecht, the Brazilian construction company.  “Brazil believes and bets on Cuba’s economic potential,” said President Dilma.

With the Port, Cuba has a huge chance to connect itself with the world — even if many reforms still need to be put forward. The island will likely use many chapters from China’s playbook. But the moment is also a big one for the international community to not repeat mistakes it has made.

Watch a video of the inauguration here.