As the Donald Trump administration in the United States raises the pressure on Cuba, global corporations are withdrawing from Cuba one after another. Concerns are growing that Cuba's economy will take an additional hit as even the corporations that had supported the tourism industry, a major source of foreign currency for Cuba, announce business reductions and exits.
According to major foreign media on the 7th (local time), the Central Bank of Cuba said in a statement, "The foreign financial institution that processed Visa and Mastercard payments in Cuba notified on the 2nd that it would terminate its transaction with Fincimex."
Until now, international credit card payments in Cuba had been handled through Fincimex, a financial affiliate of the military-industrial complex GAESA. However, as Fincimex was included last month in U.S. sanctions against Cuba, it is believed that Visa and Mastercard halted transactions with the corporations.
The Central Bank of Cuba also explained, "This suspension is directly related to the executive order President Trump released to suppress the Cuban people." Experts estimate that GAESA controls about 40% to 70% of Cuba's economy.
Global hotel chains are also scaling back their Cuba operations one after another. Spain's major hotel chains Iberostar and Melia said they would each give up operating rights for at least 12 or more hotels in Cuba. Canadian hotel operator Royalton Hotel & Resorts has also halted local operations.
The tourism industry, the core pillar of Cuba's foreign currency earnings, is shrinking rapidly along with stronger U.S. sanctions. In Feb., due to a shortage of crude oil following a U.S. cutoff of oil supplies, Cuban authorities halted jet fuel supplies, leading several airlines to stop flights to Cuba. According to Cuba's national statistics office, from Jan. to Apr. this year, 328,608 foreign tourists visited Cuba, down 55.8% from a year earlier.
Not only tourism but also the withdrawal of global corporations that have supported Cuba's economy is accelerating. According to the U.S. political outlet Politico, last month French shipping giant CMA CGM and Germany's Hapag-Lloyd indefinitely suspended routes to and from Cuba. More recently, Canadian mining company Sherritt also began exit procedures, including repatriating local staff in Cuba.
For more than 30 years, Sherritt has been one of Cuba's largest foreign-invested corporations, mining tens of thousands of tons of nickel and cobalt annually at the Moa mine in eastern Cuba and selling them worldwide. For this reason, Sherritt's departure is expected to have a devastating impact on Cuba's economy.
The Wall Street Journal (WSJ) reported, "For decades, foreign corporations have taken on business risks to gain a foothold in Cuba's tourism and mining institutional sector despite the long-standing U.S. embargo," but added, "Now, faced with a deepening economic collapse and the Trump administration's push to increase pressure on Havana, they judge that the risks outweigh the rewards."
There are forecasts that Cuba's economy will fall further into a slump due to the successive exits of foreign corporations. Ricardo Torres, a professor at American University who is from Cuba, called the withdrawal by overseas corporations a "turning point" and said, "It will be a major blow to an already weakened Cuban economy."
Susan Gratius, a researcher at the Autonomous University of Madrid who studies EU–Latin America relations, also told Politico, "Right now in Cuba, the risks of continuing to do business outweigh the expected revenue." She warned that if the current situation persists, Cuba, which is in a severe fiscal crisis, could be pushed into an even more extreme state of "de facto isolation."