Thursday, December 4, 2014

Why isn't the world investing in Cuba?

I've often wondered about something.

Whenever Cuba is described, it's portrayed as a place populated by decrepit cars from the 1950s, a backwards place that hasn't seen any real growth since Batista was kicked out and Fidel Castro took over.

Why is this?

Yes, the U.S. maintains an economic embargo against Cuba, but the rest of the world does not. Why aren't Canadians and Germans and French selling modern cars and other things to Cuba?

As it turns out, this is Cuba's own fault. Cuba is actually begging people to invest - it would like to see over $8.7 billion in investment in nearly 250 potential projects. But Cuba's focus on central planning has resulted in so much inefficiency that it's at cross-purposes with itself.

Chinese executive George Yan said he asked in May for permission to build a $1 million plant at Mariel that would employ 100 Cubans to assemble energy-saving LED lights. Despite receiving initial approval three months later, he has not been shown potential sites for the factory or received other indications the project can proceed.

Note that Yan is Chinese, and China, like Cuba, is a single-party state under control of the Communist Party. So what would happen if Yan were to request such an investment at home?

In China, he said, "this would take 24 hours."

Actually, relaxation of the U.S. embargo would be the worst thing that could happen to Cuba. For decades, Fidel and Raul Castro have been able to blame all of Cuba's problems on the evil Yankees to the north. If the U.S. suddenly relaxed sanctions, what would Cuba do then? Who could they blame? And what would they do with the influx of Americans, with their connected cell phones and their wild capitalist behavior?

It's already bad enough that Italians want to - horrors! - check their email. When one traveler asked about getting a SIM card to check her email during a planned vacation in Cuba, someone provided this response.

The email app has to be added by Etecsa to your phone.. As a tourist you cannot buy a SIM card, only Cubans can and they are only permitted one per person. You can, however, rent a sim card.

My understanding is that, unless you know someone, the email app is now only added to a mobile phone purchased in an Etecsa shop. The only way I managed to get the app on my phone is that I had a friend who knew someone that worked in the Etecsa office.

If enough American tourists show up and start demanding the same things that they can get an any other destination, the Cubans would beg the American government to restart the embargo pronto.
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