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Cuba moves to attract investors

Changes could spark boom in golf courses.

HAVANA - Cuba has 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 on Thursday and Friday 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 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 anticommunist dissident.

Cuba said that 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 from Canada, Europe, and Asia have 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 has just two golf courses, and 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.

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 lease deals.

"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.

But John Kavulich, a senior policy adviser for the U.S.-Cuba Trade and Economic Council in New York, said: "I don't think it's going to open a floodgate."

The decree allowing expanded sale of farm products, meanwhile, could have far greater impact on ordinary Cubans. It authorizes them to produce their own agricultural goods - from melons to milk, on a small scale - and sell them from home or special kiosks on their property.