Reports

CUBA: A NEW PARTNER FOR ECONOMIC GROWTH
WEDNESDAY, DECEMBER 6
2:00 – 4:30 PM

Moderators: Jorge Arrizurieta, Akerman Senterfitt

Discussants: Andy Gomez, Institute for Cuba-American Studies University of Miami; Jorge Piñon, Institute for Cuba-American Studies University of Miami

The Context:
As Cuba prepares for a succession in leadership, there are many scenarios being played out and much speculation as to whether Raul Castillo will continue along the same path set by his brother, Fidel Castro, over half a century ago.

Challenge:
Will the Cuban economy begin to open up to the rest of the world and what impacts will this have on the economies of the Caribbean Basin? What are the opportunities, risks and challenges of doing business in a “new” Cuba? Who will be the key players in the new government? What roles will the United States and Latin America play?

Points and comments brought up in the session –

• Cuba is entering a stage of transition.
• In today’s Cuba, leadership groups can be categorized into the following:
  • Fidel Castro: “Historicos”
  • Raul Castro: “Raulistas”
  • Cuban Military
  • Civilian Leadership: Carlos Lage (VP Council of State and Executive Secretary, Council of Ministers); Ricardo Alarcon (President, National Assembly), and Felipe Perez-Roque (Foreign Minister).
  • Internal Opposition
  • Indifferent/Simulators
• For Raul Castro to maintain his power once Fidel is out of the picture, Raul will have to provide more food, better healthcare, and readily accessible education to the Cuban people.
• There is a challenge by the international community to remove the travel ban as well as the U.S. Cuba Embargo. The U.S. Democratic Party, given its recent majority representation in the U.S. Congress, will most likely attempt to lift the Embargo.
• Still, there are risks associated with doing business in Cuba if and when the Embargo is lifted.
• Despite the various hindrances to trade, Cuba has successes in the following areas: 1) quality oil supply, 2) high quality hotels (Spanish investment), 3) Nikel (investment in joint venture with Canadians), and 4) good telecommunications.
• Post Castro Economic Challenges: U.S. Trade and Economic policies, role of Cuban Military in the economy, resolution of outstanding property claims, creation of free market economic enablers, capitalization of state enterprises, ethics/attitudes.
• Post Castro Economic Progress will occur in any of the following areas: infrastructure reconstruction, agriculture and natural resources, tourism, housing and real estate development, healthcare and biotechnology, information technology and communication, consumer products and services, and maquila manufacturing operations.

Questions and Answers brought up in the session:

• What are the opportunities for small and medium enterprises (SMEs) operating in Cuba?
  • Cubans are an educated population and many want to be entrepreneurs.
  • Cuban-based SMEs need training. Most Cubans are used to “wheeling and dealing” in Cuba’s black market.
• Does Cuba have good infrastructure?
  • The Cuban population does not adequately recognize the importance of logistics. As a result, Cuban leaders do not have the mindset to invest in infrastructure.
  • Poor management of port: lack of security and logistics.
  • Experts estimate that to rebuild Havana the cost will be approximately US$8 billion.

Recommendations made:

• Cuba’s government must implement a growth strategy for the economy.
  
• Opportunities in Cuba exist, but there is a tradeoff between safety risks and lower costs.
  
  • Such is the case with the possibility of establishing a retirement community in Cuba. Good healthcare professionals exist at lower labor costs, but there are higher safety risks involved.
• No significant changes will occur until both Fidel and Raul Castro are no longer in power.

For more information on the UM Institute for Cuban and Cuban-American Studies (ICCAS), please visit www.miami.edu/iccas

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