Trump’s Biggest Cuba Deal

 

Cargo unloading at Mariel, Cuba. Photo: Dennis Arce López

Sue Ashdown

Back in the early years of the publicly available internet I used to spend a lot of time fighting telecom companies. Starting at my own state capitol and then moving on to Washington DC, I spent so much time at the FCC that I might have qualified for a rapid entry pass, if there were such a thing. This was back when net neutrality meant something besides giant oligopolies fighting amongst themselves to create the ultimate walled garden. The thousands of small entrepreneurs who first brought Americans online were the first casualty of Washington’s policy neglect and indifference in that era and it is still painful for me to contemplate their losses. Continue reading “Trump’s Biggest Cuba Deal”

Investment in Cuba: the US Investor’s Forbidden Fruit

 

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David Urra

When Adam shared the apple with Eve, he must have thought it a good investment, though both were expelled from paradise as a result. In the end, it’s clear that they came out the better for it, since afterwards they had access to earthly pleasures as well as difficulties. As a matter of fact, paradise was not perfect – it had plenty of restrictions.

Right now, for U.S. companies wanting to do business in Cuba, something similar is happening. Cuba exists, just not for them. Thanks to a supreme power, they are unable to invest in Cuba because this might “damage” the Made-in-USA franchise. Continue reading “Investment in Cuba: the US Investor’s Forbidden Fruit”

The Irrationality in U.S./Cuban Relations

 

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David Urra

Fifty-five years of confrontation, misunderstandings, entrenched positions and distrust have turned relations between Cuba and the United States into an irrational nightmare that leaves all logic in human relations behind.

It’s very difficult these days to take a balanced approach when it comes to relations between Cubans and Americans. This is even more evident at the highest official levels on both sides.

For some time, I’ve found myself at the center of this problem. In my work as a business consultant, I’ve always believed that the most rational approach is to refrain from identifying with either side, the better to assist both. It’s impossible to produce any kind of useful analysis if it is only performed from a one-sided perspective. It’s not that an analyst won’t have perceptions that might tend to favor or disadvantage one of the parties, but it’s a matter of being intellectually honest and understanding that both sides need support. Continue reading “The Irrationality in U.S./Cuban Relations”

Successes & Failures by Foreign Investors in Cuba: A Primer

 

arrumbadoressxx1_0Prior to the 1990’s, the Cuban economy was completely integrated in the world’s socialist bloc with nearly ninety percent of its trade and investment coming from the member countries in that bloc, via the Council for Mutual Economic Assistance (CMEA). The Soviet Union was the largest participant in the group and relations were based on complementary economics.

Within this context, the benchmark currency was the convertible ruble and the hallmark of the system was its extensive Economic Plan that was initially designed for a strategic 5 year period, with yearly updates thereafter.

Notwithstanding its CMEA agreements, Cuba also engaged in a small amount of trade with capitalist countries where it operated under the rules of international commerce at the time.

With the disintegration of the Soviet Union and the socialist camp, Cuba was left practically without access to the majority of the markets with which it had previously traded and found itself obliged to insert itself completely in the complicated world of commercial capitalist relations, with the aggravating factor that this sector was heavily restricted by the U.S. embargo against the island, and international trade was subordinate to the United States as a consequence of its status as world leader. Continue reading “Successes & Failures by Foreign Investors in Cuba: A Primer”

American Airlines’ In-House Saboteurs

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Sue Ashdown

Just when you thought you’d seen it all. Now the Miami Herald is complaining (again) about discrimination against Cuban Americans.  This time their target is not Carnival Cruise Line but American Airlines.  The reason?  A Cuban-born pilot flying for American arrived in Cuba without a Cuban passport and Cuba refused him entry.  The Herald is urging the airline to join its anti-Cuban offensive and “negotiate harder” with Cuba.

First of all, discrimination is a rich word coming from the Cuban Americans who’ve been its unique beneficiaries for so many years. When they were the only US citizens/residents granted legal cover to visit Cuba, the discrimination against their fellow (non-Cuban) Americans who were intimidated, harassed, prosecuted, and fined for doing the same was utterly uninteresting to them. Cuban Americans are still the only immigrants given a red carpet treatment and path to citizenship when they arrive in the US illegally. Where is the outrage? Continue reading “American Airlines’ In-House Saboteurs”

Doing Business in Cuba – Myth vs. Reality

Over the past year and a half, as American business executives, journalists, and government officials have set off for Cuba in search of future business deals, we’ve had the opportunity to meet with a good many of them in Havana, while observing the comments of others from a distance. A common denominator appears to be their mental frame of reference. Like hermit crabs shuttling their habitats on their shoulders, it’s evident that more than half a century of missing information or misinformation has taken its toll, and the American view of Cuba has come to be largely governed by social myths.

The problem for any company considering future opportunities in this market just 90 miles south of Florida, is that social myths make the worst kind of compass. Business executives wandering distractedly in the fog of social myth become easy prey for grifters looking to take advantage of their confusion. Their international competitors can rest a little easier, knowing that Americans are so far behind the curve that even a lifted embargo will not be an immediate game changer.

Here are some of the misperceptions we hear expressed most often:

Myth #1: Recent changes in U.S. regulations have freed American companies to do business in Cuba. Continue reading “Doing Business in Cuba – Myth vs. Reality”

Basic banking math

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As we also pointed out yesterday:

“The measure regarding the use of the dollar still does not mean that banking relations between Cuba and the U.S. have normalized.  Cuban banks are still not allowed to have correspondent accounts in U.S. banks, which means that we must continue to operate via third parties, which increases operating and procedural costs…

“The prohibition on U.S. imports of Cuban products remains in place. The only thing that was modified was the absurd prohibition on U.S. citizens’ consumption of Cuban products and services in third countries.”

– Cuban Foreign Minister Bruno Rodríguez, Press Conference, Havana, March 17, 2016

Department of Embarrassing Revelations

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Interesting to see how the press are reporting the latest changes to U.S. Commerce and Treasury regulations concerning Cuba.

The new rules open international banking to Cuba and to commerce with dollars.” (L.A. Times)

Well, kind of.  The dollar still can only be presented indirectly by Cuban financial institutions for payment through third country financial institutions.  Common sense tells you that direct transfers are always less costly than transfers that make multiple stops along the way, so for Cuba the costs remain elevated, but at least non-Cuban banks can stop fretting about the possibility of being fined.

But why is nobody reporting this embarrassing bit?

Americans traveling in Europe [may now] purchase and consume Cuban origin alcohol and tobacco products while abroad…

So that Cohiba you smoked in London last month?  Hope you didn’t video it on your cellphone.

 

 

Hilton: Nothing to Claim

Ciro Bianchi Ross – Juventud Rebelde

Translation: IcarusCuba LLC – credit requested for redistribution

The media frenzy over Paris Hilton’s recent visit to Cuba for the Cigar Festival was pretty predictable. The heiress to one of the world’s largest hotel chains didn’t limit herself to visiting Havana, but traveled to Soroa and Cayo Largo as well, and everywhere she went, people who came in contact with her were impressed by her down-to-earth, easygoing nature. When she visited Varadero, she stole the show at the International Hotel’s cabaret, where she went on stage, grabbed a congo, and accompanied the orchestra before dancing along with the entertainers. Continue reading “Hilton: Nothing to Claim”

Pictures speak volumes

Havana’s international fair (FIHAV) is a great unknown for the vast majority of American businesses.  But not all.

American businesses do attend the fair.  They are not listed anywhere in the exhibitors catalog, nor are they shown anywhere on the exhibitors map.  Tucked away in a quiet, remote pavilion, they mainly include a variety of agricultural producers, ports and shippers, quietly attending the fair under the shelter of licenses granted by OFAC.

Some snapshots from FIHAV 2014:

Exhibit for ONE Cuban rum company

 

ONE Cuban tobacco company (right) and one stand for meat products (left)

Cuba is much more than just rum and tobacco but those stands are the evident showstoppers.

Moscow had a huge presence
Tatarstan was not far behind
Nor was Argentina
Mexico had its own pavilion
So did Italy
Spain had two
Portugal only had a stand, not a pavilion, but still…

And now, the American exhibits, on opening day.  (Most American visitors did not arrive until the second or third day.)   Compare and contrast.