Helms-Burton Law Hits Cuba's Wallet, but Misses Its Target

More than a year after the controversial Helms-Burton legislation took effect, its impact is much like that of the embargo: It is being felt, but it's not accomplishing what it set out to do.

Named after its sponsors, Sen. Jesse Helms (R) of North Carolina and Rep. Dan Burton (R) of Indiana, the law seeks to tighten the embargo by punishing foreign companies and individuals who "traffic" in Cuban properties owned by US citizens before the revolution. But if the intent was to halt foreign investment in Cuba, it's not working.

"Helms-Burton has helped scare away some potential investors, but ... there's been no [general] pullout from Cuba," says Carlos Fernandez de Cossio, director of the North America section of the Cuban Foreign Ministry. Mexico's multinational cement producer Cemex is thought to be the only company to have pulled out of Cuba under US pressure.

Since the law was signed by President Clinton in March 1996, Cuba has approved 75 new foreign investment projects, officials say. Cuba now counts investments from 26 countries, including Israeli investment in citrus production, Spanish interests in tourism and music, and Canadian involvement in mining.

Yet while the legislation isn't halting investment, it is putting the brakes on.

"Companies already here aren't leaving, but new investors are cautious," says George Carriazo, a Havana economist. Adds Samuel Lpez, a promoter with the Cuban Investment Ministry, "Who knows how many [potential investors] aren't coming, out of fear of the US?"

As with the embargo in general, however, it is hard to separate what part of investor caution is the result of Helms-Burton, and what part is frustration with Cuba's inflexible, centralized system.

Some diplomats and foreign business people note, for example, a trend among companies to open offices in Merida, Mexico, a short flight away, rather than in Havana. Is this out of fear that a property - such as the Havana house a Mitsubishi dealership occupied - might be claimed by an American family and subject to action by the State Department? Or is it that the bureaucracy of the sole leasing authority, Cubalse, has resulted in such high rents and long waiting lists that companies have sought alternative solutions?

Other observers say any lack of foreign investment in Cuba is as much the result of Cuban design as it is of US policy. "We encourage investment in Cuba; we believe it will help bring Cuba out of its hole," says one European diplomat. "But it's also true that the Cubans don't want any more foreign investment than they think they need" to survive.

Cuba insists it has never opposed compensation for nationalized properties - agricultural land or factories taken over by the state, but officials say "abandoned properties" left behind by fleeing families are a different story. "If you left the country, you lost [your property] and that's it," says Mr. Lpez. "Especially when many of those people are now acting against the revolution."

With Helms-Burton, the US is assuming responsibility for those families, something Cuban officials say has never happened before. If the US insists on that position, Cuba will insist on compensation for the damages those exiled families have caused through "terrorist actions" and support of the US embargo. "In our view," says Mr. Fernandez de Cossio, "our position is a natural answer to an irrational law."

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