On Sunday Feb 24th 2013, the long awaited news was finally published. Raul Castro, current “president” of Cuba, and brother of Fidel Castro, the “leader” of the opportunistic revolution that overthrew the previous dictator Fulgencio Batista in 1959; announced his retirement by 2018. If it happens as announced, the Castro’s would have ruled their kingdom for almost 60 years non stop, potentially the modern world longest running dictatorship in the last 200 years or so.
Leaving the politics aside because nobody can really speculate what may happen in the near future, the news should not surprise anyone. Raul hinted that he was interested in modifying the status quo almost from the moment he took over, starting with reducing the previously day long labor day, new years, revolution anniversary and other official holidays, to a more manageable couple of hours events; breaking with his attention grabbing brother (Fidel) habits of publicly rambling for hours to the dismay of even his most arduous supporters. He also from the beginning started programs that allowed Cubans for the first time to open small business in the island, and to experiment with new travel policies that allow Cubans to freely travel outside the country breaking the classical tradition of requiring a governmental permit to leave the country
Castro’s Last Term. What does it means for the international community:
For Canadians, Europeans, Asians, Middle Eastern, and Latin America countries, it does not changes barely anything. They have been able to visit, trade, and take advantage of the natural wonders of Cuba without restrictions. They have enjoyed Cuban cigars, drink cuban rum, and frolicked in cuban beaches, to the dismay of their U.S. citizens who were the only ones actually banned from visiting the country 90 miles away from Key West.
For U.S citizens and it’s government, it primarily signals the end of the excuses used for the last 50 years to carry out an embargo that has only affected the cuban people, and has not actually accomplished anything. For the U.S. companies, it will be an opportunity to explore the only country in the world where they have not been able to conduct business in over 50 years. Because of the perils of investing in a country under communist rules, and with a government that has bailed out on their international financial obligations, that has nationalized foreign investments when convenient, and that it has heavily managed any potential business investments in the country, the country economic development has barely improved in the last 50 years. Cuba it is basically the undiscovered country, and for many companies may represent the last opportunity to invest in an almost virgin territory.
What does it means for your business?
With barely five years until the end of the current regime in the island, organizations need to start preparing themselves for conducting business in a country that has the potential to surpass Taiwan and Singapore in the future. It’s natural place near the United States and Latin America, combined with a highly educated workforce makes it a natural place to outsource for companies in the U.S. and other countries attempting to conduct business in the Americas.
Some companies and industries will be more at risk than others. Cuba has historically be an agricultural country, with extensive sugar cane, oranges, tobacco, and coffee plantations, which could substantially affect those industries in the southeastern U.S., and primarily in Florida. In addition Cuba is internationally recognized by it’s natural beauty, and while classical Caribbean tourist destinations already know the potential risk, other locations such as Hawaii, and even Asia could see a decrease in their tourist trade if suddenly 300 million americans decide to take their winter vacations closer to home in a place they have never been. Also the potential access to a workforce with over five million educated workers may open opportunities for the outsourcing and/or offshoring of high end manufacturing of products, from furniture to electronics, putting at risk outsourcing operations in China, Mexico, and other countries.
These and other similar opportunities and challenges need to be carefully considered by organizations and companies in Cuba, the U.S. and other countries, since many of them may start to see the impact if the recently announced changes are followed by other measures opening the country to more foreign direct investment. Many companies already have or are making plans to at least increase their understanding of the current events, and to start planning how to address the future potential changes.
If are interested in learning more about Cuba, the business opportunities in the country, and/or to explore the future of doing business in cuba this may be the time to start the process.
You can contact us for additional information or if you are interested in learning more about current and future business opportunities in Cuba.
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