The United States government has approved the construction of a $5 to $10 million dollar heavy equipment factory in Cuba’s Mariel port and special economic zone located 30 miles west of the Cuban capital of Havana. This announcement comes merely 15 months after the United States and Cuba announced plans to normalize relations. The Oggun Tractor Plant, as it is to be named, marks the first significant American business investment in the small island nation since the rise of Fidel Castro in 1959, when $1.8 billion dollars (estimated present day value of $7 billion) worth of American corporate and private property was nationalized.
The company’s initial focus will be on producing low-cost, durable tractors for private farmers in Cuba. These tractors are much needed in an ailing Cuban agriculture industry, which suffers from low productivity that is attributed to the excessive control and gross inefficiencies of the nation’s centrally planned state bureaucracy. The tractors will initially be assembled in Cuba from American exported components, with the eventual goal of manufacturing these components in Cuba. The American manufacturing company also hopes to take advantage of much of Latin America’s low tariffs on Cuban imports, by exporting their tractors at competitive prices all across the region. Following up on their anticipated success of the tractors, the company plans to move into producing other highly demanded heavy equipment to help Cubans deal with their deteriorating infrastructure.
Moving forward, all signs point to a commitment from both countries to re-establish and strengthen their economic ties. It appears likely that the Oggun Tractor Plant will be the first of many investments from an American company into the Cuban economy.