While Cuba’s 19th century development was initially financed by British investment, American investment had become the chief source well before the end of the century. As early as 1896 it had reached some $60 To $80 million. Canadian investment was important in some areas, notably banks and banking and streetcar systems. But even by the 1850s, wealthy Cubans had begun investing in the United States, frequently feeding their profits back into Cuba.
The post-World War I depression that followed the Dance of the Millions forced many Cuban enterprises to sell to their American creditors, who gained significant control over the sugar and banking industries. American investment in Cuba reached US $1,150 million by the mid-1920s and US$1,500 by 1929. The Depression of the 1930s in contrast, forced many Americans to liquidate their Cuban holdings, reducing total American investment in Cuba to around $500 million by 1934. In subsequent years there was a gradual recovery and when these investments were confiscated in1960, they totaled about $1,000 million.
The Revolution of 1959 began a program of confiscatory nationalization of foreign investment, which was virtually complete by 1962, when it turned instead to subsidies from the Soviet Union. Even before these ended with the USSR’s 1989 demise, the need for foreign currency had by 1982 forced some liberalization of restrictions on foreign investment in the tourist industry. As normal foreign Investment remained ideologically unacceptable, the regime strove instead to promote joint ventures between foreign investors and the Cuban state. Despite the modest success of some of these, in 1993 the London-based publishers of Euromoney ranked Cuba as 169th (or last) on a worldwide list of countries in which to invest, behind Iraq(157th), Somalia (163rs), Afghanistan (164th), and Cambodia (165th). A new 1995 foreign investment law allows foreign investors access to most economic sectors, except defense, health care, and education, and to own businesses outright.
The regime’s refusal to compensate US citizens and companies for investments and properties seized in the aftermath of the Revolution has led to active US hostility to investment by other countries, particularly where these involve the use of expropriated American assets, hence the Helms-Burton Act. Non-Communist countries that have invested in contemporary Cuba include Brazil, Canada, Chile, France, Israel, Italy, Mexico, and Spain.
