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EDITORIAL - Cuba's Head Start On Logistics Hub
Published: Tuesday | October 1, 2013
For those old enough to know, the name Mariel is likely to conjure up television images from 33 years ago of people being crammed into small boats in Cuba for the 90-mile run to Miami. An estimated 150,000 people left Cuba for the USA under the Mariel boat lift.
These days, the small town of 43,000 people, 28 miles west of Havana, is having international attention for a different, less dramatic, but globally important reason.
Last week, Cuba's President Raúl Castro signed a special tax law, to come into force next month, to provide tax concessions to firms that will operate at a 180-square-mile free zone in Mariel. The Cuban government hopes to attract a wide rage of foreign companies to the zone.
In fact, the free zone is part of a US$900-million project, two-thirds of which is being financed by Brazil, that will include more than 6,500 feet of new docks at the Mariel port capable of accommodating Post-Panamax-size vessels. The first 700 feet or so of those docks will completed by year end.
The facility will be managed by PSA Panama International, a subsidiary of the Port of Singapore Authority, which owns one of the development Post-Panamax facilities in the Panama Canal Zone.
Developments in Mariel should concentrate the minds in Jamaica.
That project, on which the Cubans are already well out of the blocks, is similar to what is being proposed by China Harbour Engineering Company (CHEC) for the Goat Islands off Jamaica's south coast, but which is mired in controversy. The aim of the Cuba-Brazil joint venture is to transform Cuba into a logistics hub for the Americas.
In the case of Jamaica, the debate has ranged from dark predictions about the ecological impact of developing the Goat Islands to an almost xenophobic resentment of additional Chinese capital to the country in the face of previous Chinese investments in sugar, roads, and other infrastructure.
Money maker
It will be several months before CHEC makes a final decision on its project, the only concrete one on the table, with money on its back, despite much talk by government officials about plans for a raft of logistics-related facilities.
The point: Chinese investors, or any others who wish to invest in port or logistics operations in this area to take advantage of the expansion of the Panama Canal, have options.
At around 560 or so nautical miles slightly northeast of the Panama Canal, Jamaica is in an excellent geographic location to be a hemispheric logistics hub. It is perhaps 300 nautical miles closer to the canal than Cuba.
But in all economic ventures, there are trade-offs. People will put their money where they can expect good returns and where the environment is more welcoming. In that case, a few hundred nautical miles may not be decisive, especially if there is also the additional benefit of lower costs and a highly educated workforce.
In any event, Cuba is ready to enter the drive phase of a race in which Jamaica is stuck in the blocks.
Published: Tuesday | October 1, 2013
For those old enough to know, the name Mariel is likely to conjure up television images from 33 years ago of people being crammed into small boats in Cuba for the 90-mile run to Miami. An estimated 150,000 people left Cuba for the USA under the Mariel boat lift.
These days, the small town of 43,000 people, 28 miles west of Havana, is having international attention for a different, less dramatic, but globally important reason.
Last week, Cuba's President Raúl Castro signed a special tax law, to come into force next month, to provide tax concessions to firms that will operate at a 180-square-mile free zone in Mariel. The Cuban government hopes to attract a wide rage of foreign companies to the zone.
In fact, the free zone is part of a US$900-million project, two-thirds of which is being financed by Brazil, that will include more than 6,500 feet of new docks at the Mariel port capable of accommodating Post-Panamax-size vessels. The first 700 feet or so of those docks will completed by year end.
The facility will be managed by PSA Panama International, a subsidiary of the Port of Singapore Authority, which owns one of the development Post-Panamax facilities in the Panama Canal Zone.
Developments in Mariel should concentrate the minds in Jamaica.
That project, on which the Cubans are already well out of the blocks, is similar to what is being proposed by China Harbour Engineering Company (CHEC) for the Goat Islands off Jamaica's south coast, but which is mired in controversy. The aim of the Cuba-Brazil joint venture is to transform Cuba into a logistics hub for the Americas.
In the case of Jamaica, the debate has ranged from dark predictions about the ecological impact of developing the Goat Islands to an almost xenophobic resentment of additional Chinese capital to the country in the face of previous Chinese investments in sugar, roads, and other infrastructure.
Money maker
It will be several months before CHEC makes a final decision on its project, the only concrete one on the table, with money on its back, despite much talk by government officials about plans for a raft of logistics-related facilities.
The point: Chinese investors, or any others who wish to invest in port or logistics operations in this area to take advantage of the expansion of the Panama Canal, have options.
At around 560 or so nautical miles slightly northeast of the Panama Canal, Jamaica is in an excellent geographic location to be a hemispheric logistics hub. It is perhaps 300 nautical miles closer to the canal than Cuba.
But in all economic ventures, there are trade-offs. People will put their money where they can expect good returns and where the environment is more welcoming. In that case, a few hundred nautical miles may not be decisive, especially if there is also the additional benefit of lower costs and a highly educated workforce.
In any event, Cuba is ready to enter the drive phase of a race in which Jamaica is stuck in the blocks.
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