Preparing for Cuba

From small South Florida businesses run by Cuban exiles to multinationals with sprawling global operations, many companies have long had a Cuba plan in a drawer or a file somewhere, ready for the day when the U.S. trade embargo is lifted.

Companies are now dusting off those business blueprints as it looks increasingly likely that Fidel Castro's intestinal illness is terminal or may prevent him from returning to power -- paving the way, some speculate, for an economic opening with Cuba, along the lines of China or Vietnam.

Although the nation of 11.3 million people represents a virgin market for all types of products and services, several sectors appear riper for immediate investment than others.

One industry that the Cuban government is already pushing is oil and gas exploration. Cuba boasts untapped reserves of both oil and natural gas, and both commodities could be big revenue earners for the cash-strapped island. But they also require significant capital investment and technical know-how, which foreign companies have.

U.S. Rep. William Delahunt, D-Mass., said Cuban officials were keen to make known their interest in possible energy-sector deals during a December Congressional fact-finding mission to the island.

"I think they would welcome American investment in that, " he said. "It clearly makes commercial sense."

Housing is another sector that is in dire need of investment, both to rehabilitate existing stocks and build new housing. Experts estimate Cubans need some 50,000 new homes.

U.S. tourism operators are also eyeing a brand new market that is physically easy and cheap for Americans to access, especially from South Florida.

If the embargo is lifted at some point and the Cuban economy opens up, some businesses may still be difficult to enter. Among them: the media, which the Cuban government may be reluctant to relinquish to foreign investors, and sectors that rely on a consumer-driven economy, such as advertising.

Some U.S. products have won exemptions from the embargo over the years, and despite frosty relations between Havana and Washington, such trade has been building. Exports of agricultural products and livestock, for example, have been underway for the past five years, and artists have been free to establish commercial relationships with foreigners since the early 1990s.

Delahunt sees the island as an ideal manufacturing base with a skilled workforce and close geographic proximity to the United States.

"I think any legitimate proposal, properly vetted, would be considered, " he said. "My sense is that the Cubans are very open to a commercial relationship."

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