In the Jan. 29 Other Views article written by Frank Calzon, he mentioned that the Greater Miami Chamber of Commerce had an important meeting. I learned since then that the portion of the program regarding investment in Cuba at the event was coordinated by Cuban-American businessman Carlos Saladrigas.
If any of the participants in the Summit also wants to purchase the Seven Mile Bridge, a segment of the Tamiami Trail, or any other prime real estate in the Everglades, I am sure that they will find many sellers from among the best and brightest in South Florida.
John Suarez, Miami
EDITOR”S NOTE: Here’s Mr. Saladrigas’ speech:
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Spotlight on Cuba: What changes may mean for
From its early consolidation in the early 60s until the collapse of the Berlin wall in 1989, Cuba remained a closed society, self isolated from outside influences.
Its totally centralized command economy was heavily dependent on Soviet subsidies and insensitive to global competitiveness. While the Soviet Union undertook glasnost and perestroika, Fidel’s Cuba remained unchanged.
Several U.S. presidents sought to improve relations with Cuba only to be shunned and embarrassed by Cuba’s actions. Isolation, reinforced by US policy was all too convenient an alibi for its massive economic failures.
Repression hit its peak during these periods of isolation. Political executions were routine, and long prison sentences were handed out even for mild expressions of dissent. Political prisoners numbered in the thousands.
When the Soviet subsidies disappeared nearly overnight in the early nineties, the unproductive and inefficient Cuban economy dropped nearly 35%.
Economic conditions throughout the island worsened significantly, and very few observers thought Cuba’s system could survive. I clearly remember the slogan in Miami: “En los noventa Fidel revienta”.
He didn’t, and after a slight and brief economic opening, little changed. Cuba could have embraced the markets at the time, and chose not to do it, evidencing how much they feared an economic opening.
When Obama assumed the presidency in 2009 he became the first US president to confront a changing Cuba, and quickly reversed Bush era restrictions on travel and remittances.
In 2008 after a very serious illness, Fidel Castro gave up Cuba’s leadership and anointed his younger brother as successor.
Notwithstanding Venezuelan largesse, Cuba’s economy continued to deteriorate. Moved primarily by pragmatism, Raul Castro launched Cuba on a timid course of reforms.
Repression subsided in lethality, most political prisoners have been released, the Cuban people spoke out more boldly; a new class of small entrepreneurs and self-employed individuals emerged; dissidents multiplied and became much more outspoken, and Cubans were able to freely travel for the first time since the mid 60s.
Much has changed here too. Over 350,000 Cuban-Americans travel to Cuba each year. Visits by Cuba’s opposition members are commonplace occurrences, and poll after poll, showed major shifts in Cuban-American perceptions and attitudes towards Cuba and US policy.
Out of sight for many of us, Miami and Havana acquired border town characteristics with a thriving trade and commerce developing.
Scores of retailers owe the majority of their sales to Cuba. Their merchandising reflects the needs, tastes and preferences of consumers in Cuba. Even Cuba’s school uniforms are routinely sold in Miami.
Uninsured Cuban-Americans often travel to Cuba for their medical care, and thousands get their dental work done in Cuba.
Large numbers of Cuban Americans have bought homes in Cuba, have provided the seed capital for thousands of small enterprises on the Island, and have sent goods ranging from household appliances, to auto parts to restaurant equipment.
In the end it’s people doing what people do. Moving faster than their two respective governments, Cubans on both shores have long ago begun a process of normalization, normalizing human connectivity and family solidarity. During our very own economic crisis, I even learned of remittance flowing backwards!
It is no surprise that on Dec. 17, when President Obama announced historic sweeping changes in the U.S. relationship with Cuba, that there were more Cuban-Americans waiting to board planes to Cuba than there were protesting in front of Versailles.
It is not my purpose today to argue for the merits of the policy shift, but to outline some of the opportunities and challenges it presents to our business community and to raise some of the strategic questions that it poses.
In many ways, what’s done is done, and the changes effected are most likely irreversible. In fact, there is a good probability that these changes may have opened the door to an accelerated process of changes both here and there.
Notwithstanding, we must realize that Cuba is far from becoming and investment paradise. Much needs to change. The US embargo is still in place and Cuba’s economic reforms have been too little, too slow.
Embracing the markets is like providing electricity to an outlet. You can electrify the outlet, but to benefit from it, Cuba needs to plug in. So far they have shown serious hesitation and fear to do so, because it implies a loss of control.
Yet, reality strikes. Cuba’s economic system has run its course. For Cuban leaders, the political calculus of weighing the cost of changing vs. the cost of postponing change is beginning to clearly favor changing sooner rather than later.
When you realize that President Maduro is your most important business partner, you shudder!
And growing expectations for change in Cuba’s populations and younger members of the ruling elites, fueled by the US policy shift and continued economic decay, are building significant internal pressures for change.
Clearly, how Cuba reacts and what it does over the short term will determine whether a clear economic opening will begin to emerge or not.
However, we cannot afford to cross our arms and simply watch and wait. While even under the best of circumstances the Cuban economy will be a drop in the bucket to the US economy, for Florida businesses and especially for South Florida it could become an economic paradigm shift.
Services, software and technology, construction and real estate development, tourism, recreational boating, infrastructure and trade, are the most likely industries to lead Cuba’s economic take-off and are, at the same time, Miami’s core competencies.
As we talk this morning, businesspeople from Europe, Asia and our own hemisphere are lining up to explore business possibilities in Cuba.
It takes time to understand a market and develop the necessary contacts to do business. US cities with ports like Tampa, Mobile and New Orleans want to get a heads up over South Florida.
Are we willing to easily lose first-comer advantage or see this potential opportunity get away from us?
Three things are fueling the rush. The new measures have the potential to create a wide range of interesting trade and commercial opportunities with Cuba’s burgeoning private sector; the expectation that Cuba will further its economic reforms; and that all of this combined, will lead to the elimination of what remains of the US embargo.
The new measures will allow Cuba’s growing small enterprise sector to import from and export to the U.S. American businesses will be able to contract independent Cubans for services, such as computer programming, web design, architectural drawing, and back-office work.
According to Proyecto Cuba Emprende, an entrepreneurial training program and business incubator run by Cuba’s Catholic Church, the majority of its graduates open IT related and other service businesses, not restaurants, as most people would think.
On the Cuban side, it is believed that Cuba may this year finally get it right with its foreign investment law; allow Cuban-Americans to purchase residential real estate; and update its migration laws to remove the more obvious contradictions facing Cuban-Americans who wish to travel back and forth. If true, these will be significant changes.
We are indeed living through a historic time. Cuba has always been relevant to Miami, and Miami has been relevant to Cuba.
Most of the new measures announced by the president will require changes in Cuba’s economic system and laws. In other words, Cuba will need to insert the plug into the electric outlet.
Whether that will happen, or how soon, remains to be seen. However, if history is a guide, we know that Cuba’s system has to change, if for no other reason than it simply does not work.
While this process of change unfolds before our very eyes, each of us has to ponder what role, if any, do we want to play.
Deep in our hearts we have to find answers to many difficult questions. We are not in control of the events, but our actions can collectively sway the course of Cuba’s future history. We have to seriously assess the following questions:
*Will a greater opening to Cuba better or worsen the prospects for improved human rights?
· Will an opening facilitate change or make it more difficult?
· Is it ethical to do business with a country like Cuba?
· Is hurting Cuba’s economy an effective way to bring about desired political changes?
· Can we sequence Cuba’s transition?
· Do we keep insisting on a 55 year-old policy or do we take a risk to change it?
· Is it better to stand by and see others engage?
· Which policy approach is better for the Cuban people and helps strengthen a civil society?
The answer to each of these questions will be different and unique to each of us. History and economics may help us with the answers. Francis Fukuyama would warn us that it is futile to attempt to sequence a transition and that all doors to change must be opened far and wise. Voltaire, the Enlightment philosopher, told us that “economic activity that enriches the people, makes them free”.
One thing we know. As we dig for answers keep in mind that time is of the essence.