Associated Press Writer

HAVANA (AP) — Cuba issued a pair of surprising free-market decrees, allowing foreign investors to lease government land for up to 99 years – potentially touching off a golf-course building boom – and loosening state controls on commerce to let islanders grow and sell their own fruit and vegetables.

The moves, published into law in the Official Gazette and effective immediately, are significant steps as President Raul Castro promises to scale back the communist state’s control of the economy while attempting to generate new revenue for a government short on cash.


“These are part of the opening that the government wants to make given the country’s situation,” said Oscar Espinosa Chepe, a state-trained economist who is now an anti-communist dissident.

Cuba said it was modifying its property laws “with the aim of amplifying and facilitating” foreign investment in tourism, and that doing so would provide “better security and guarantees to the foreign investor.”

A small army of investors in Canada, Europe and Asia has been waiting to crack the market for long-term tourism in Cuba, built on drawing well-heeled visitors who could live part-time on the island instead of just hitting the beach for a few days.

It may also help the country embrace golf tourism. Investment firms have for decades proposed building lavish 18-hole courses ringed by luxury housing under long-term government leases. Cuba currently has just two golf courses nationwide, but the Tourism Ministry has said it wants to build at least 10 more.

Endorsing 99-year property agreements might be a first step toward making some golf developments a reality, but also makes it easy to imagine a Cuban coastline dotted with timeshares, luxury villas and other hideaways that could serve as second homes.

“I think this is huge. This is probably one of the most significant moves in recent years relative to attracting foreign investment,” said Robin Conners, CEO of Vancouver-based Leisure Canada, which plans to begin construction next year on a luxury hotel in Havana and also wants to build hotels, villas and two championship golf courses on a stretch of beach in Jibacoa, 40 miles to the east.

Cuba has allowed leases of state land for up to 50 years with the option to extend them for an additional 25 but foreign investors had long pressed tourism officials to endorse 99-year deals to provide additional peace of mind to investors. The longer leases also mean lower interest rates on international banking mortgages.

John Kavulich, a senior policy adviser for the U.S.-Cuba Trade and Economic Council in New York, said Mexico has used similar leaseholds to encourage foreign investment despite restrictions on non-Mexicans owning coastal property – but that the similarities end there.

“I don’t think it’s going to open a floodgate. I think it may turn on a tap so that people know there’s water,” he said. “Certainly it’s an improvement. However … making one change isn’t a panacea to solving the issues that companies have in evaluating their opportunities in Cuba.”

But developers cheered the move, including Andrew Macdonald, CEO of Britain’s Esencia Hotels and Resorts, which is awaiting Cuban government approval to start construction on the Carbonera Country Club, a $300 million beach development outside the resort of Varadero.

“It’s exceedingly good news,” Macdonald said. “It’s been a long road. But having said that, it’s very important for the country that they get each step right and this is a very big step for them.”