US Citizens Losing Out on Emerging Cuban Market

Graham Sowa

HAVANA TIMES — This month a 2.5 billion dollar a year tourist market opened within a hundred kilometers of the United States, but US citizens shouldn’t expect to reap any economic rewards.

In October the Cuban Government continued its slow march toward economic decentralization by allowing private contractors to bid for jobs in the tourist sector.

The newly liberated economic activities range from septic tank cleaning and refrigeration equipment maintenance to building construction and restoration.

State operated tourist agencies such as Havana Tur and San Cristobal are now allowed to take package group tours to private restaurants and on excursions arranged by foreign companies.

A Canadian outfit, Canyoning Quebec, already runs canyoning excursions in the Escambray montains.

It probably won’t be too long until private companies are offering climbing trips to Valle de Vinales and deep sea fishing charters that have something about Hemmingway in their name.

Sadly, if you are from the United States, the embargo/blockade of Cuba by our government effectively closes the newly opened tourist market to US based providers of goods and services.

On the Cuban side of the Straits of Florida there is still the immense problem that the Cuban government maintains a near monopoly on imports to the island.

Materials procurement will continue to remain a headache and maybe even a deal breaker for many start-ups.

However, the new Port of Mariel will begin functioning next year.  The plan at that point will probably be to hand over more and more importing power to the private sector.

Government involvement will shift from central economic planning to regulation enforcement and revenue generation through fines, fees, and taxes.

Basically opening Cuba to outside investment and imports will parallel the slow opening of the private domestic market over the past few years.

Private domestic business started out with grandpa opening a lemonade stand.

Now there are restaurants, 3D movie houses, video game salons, and even paintball arenas in Havana.  Plumbers, electricians, construction crews and taxi drivers are working as private contractors.

However, even this minor economic tinkering in the domestic Cuban market has been hampered by the US embargo/blockade.

More than a few Cubans I know work in computer programming, translation, and other services that they provide remotely via the internet.

Internet access is notoriously expensive in Cuba, but it does exist, and some Cubans use it to do business.

But even with their crappy internet access they can’t accept Paypal, or any other online payment provider that even have a server hosted in the United States.

The impact is that the largest online payment services in the western hemisphere are prohibited from facilitating business not only between Cuba and the United States, but Cuba and any country in the world.

So an hour of internet costs more than a beef cheeseburger and the U.S. government prohibits even the most basic forms of internet entrepreneurship on the island.  Cubans get screwed from both ends and their good ideas die.

Aside from limiting U.S. participation in the Cuban economy and stifling local Cuban entrepreneurs the U.S. embargo/blockade causes direct economic losses to the U.S. economy; to the tune of 500 million dollars in cash money.

In 2008 Cuba bought 700 million USD worth of goods, mostly exempted food and medical items, from the United States.  In 2011 that number has dropped to 200 million.

The decrease of U.S.-Cuba imports came about because Cuba, having a more capitalist mentality than many would like to admit, has started importing more from Brazil, China and Vietnam.  You can see that evidence at any Di-TuPollo stand or TRD Shop in Havana.

Take note that the U.S. Treasury regulation mandates that payment from Cuba to U.S. companies must be made in cash, so that loss was in hard currency.  Ouch.

13 thoughts on “US Citizens Losing Out on Emerging Cuban Market

  • The necessity in the relationship CUBA – US is one way. Cuba needs the US, specially now that they are betting everything on Mariel. What can the US get from Cuba economically? Zit.

  • Isn’t that where former U.S. Secretary of Defense Donald Rumsfeld is holed up in retirement these days? A rather creative Al Jazeera investigative reporter recently showed up at his front door. As I recall, “Rummy” (now Rheumy) was rather inhospitable!

  • Quoting Graham; “Now there are restaurants, 3D movie houses, video game salons,”….

    Not anymore for the 3D movie houses and video game salons, as the Castro regime can quickly take away any openings it allows since that is what totalitarian dictators do. So much for all these economic openings and reforms for they will only last as long as they are expedient for those in power to retain that power…

  • Does Mass Canosa own this little boutique anti-castro media outlet, or is there another reason for the censoring of free thought which someone with a legitimate in Cuban people and their future, might wish to submit?

  • As long as the United States holds up it’s unilateral cruel obnoxious view, that somehow on one hand they can overstay at Guantanamo, Cuba with weaponry pointed at the Cuban people, and on the other hand impose a inhumane cruel illegal embargo now entitled Helms Bruton, which serves tomake Cuban people suffer and nothing else, they why in hell or on earth would you think that the USA should be free to engage it’s traditional Rape, Plunder and Exploit policy they have engaged since time immortal against every Latin American country? Help me understand this, ok?

  • hahaha…I LOVE Aussieguy’s way of expressing his valid point!
    Good on ya mate! Kudos from Canada, eh?

  • Graham speculated that the development of the port of Mariel will open up importation to the Cuban private sector. That does not seem likely. The Cuban government controls all imports and exports, which provide an lucrative source of hard currency income. Why would they willingly give up their monopoly?

    All the US is missing out on is the chance to run up a line of credit to their Cuban partners, the Cuban government, and then to be blackmailed into forgiving the debt. This has been the standard practice for decades as the Cuban government has stiffed their Russian, European and now Mexican creditors.

  • Funny headline! Unthinkably bizarre! Why should the Cuban government worry about disenfranchising yankees from participating in their growing economy and plateful of opportunities? C’mon! Helms Burton…the ” illegal” embargo condemned by 99% of United Nations membership nations, an embargo that serves only attempts to disallow Cubans access to world goods…that’s world goods, not just yankee goods, friend. Three years ago the Cubans ordered $60,000,000 worth of image servicing equipment for it’s internal medical use…CT Scans, MRI equipment and Angiography settups. These they purchased with a six million dollar deposit from Phillips in Amsterdam. Six weeks later the Cubans were informed that they could not buy the equipment, because if they did, the Dutch plant could never again ship to the USA, and they would be sued for infringement or violation of the poisoned, evil legislation. And you think yankees are being “disadvantaged”…held back from an opportunity in Cuba? That is EXACTLY the problem with the USA. The yankee Latin Americas policy has been consistent, and you continue to express it in that subtle yet masked way. What is the traditional policy of the USA government towards all latin AMErican countries? Read, learn, but most (of all) importantly…go there. LIsten. Learn. It has been RAPE< PLUNDER< STEAL AND ABUSE from Guatemela through El Salvador and Nicaragua, Panama (who got their canal back thank goodness) Venezuela (classic example) and little places like Ecuador or Bolivia. But the same sort of attitude is visible historically in Vietnam and Iraq, where US economics-inspired wars killed milliions. Yet in the USA, while poor people can't get comprehensive health care or an education, they can look at their neighbors, Canada and Cuba, and reasonably ask what the yankee government did with all that money, that pushed them to the point where their foreign debt is unthinkably unsurmountable, their cities and society rots, as people hide in their homes at night with guns and dogs and electronic alarm systems, to avoid the overwhelming violence and drug culture they foster. Cubans overwhelm them in both literacy rates and overall university graduate numbers, and per capita doctor provisions. And you think Americans are missing an opportunity in Cuba? hahahaha! Americans are missing an opportunity in the USA. They need an American president who can heal the oozing damaged soul of the most sacred part of the country….the people….the children….the future. So, the advice and hope from the rest of the world regarding yankees and Cuba, is …"please…just leave Cuba alone." You see, they have friends, one of which is the one who owns the USA economy now…and that would be China. Then there is Canada…if we could do it we would make Cuba a Province with special electoral powers to control their own resources, but with access to goods and services here, free. As for "owning" property….well, it is really just about use of it. I believe nobody but Cubans should own property there, but that foreigners should be able to lease it. Probably too fair a concept for a guy like you to get!
    Viva Cuba…Para Siempre…Viva la Gente Cubana…Viva su Futuro Genial!

  • Don’t forget the charm of the village of St. Michael inMaryland!

  • Reread the post. Graham asserts that
    Americans are “losing” a business opportunity to engage in the
    tourism trade in Cuba. Yes, even Maryland, as a business opportunity, is a
    better business risk with a greater likelihood for success. Besides, have you visited
    the Eastern Shore area of the Chesapeake Bay? Have you visited the Baltimore
    Harbor or Camden Yards? Maybe not so exotic but these destinations have their
    charms and overall more people visit Maryland than visit Cuba. That says

  • Come on Moses, are you seriously suggesting that Maryland is valid as an alternative tourism destination to Cuba? What an exotic choice that would be! Quite frankly, I’d rather take a tour of a hole in the ground.

  • Okay, before we get all weepy over missed opportunities in Cuba, let’s get a little perspective. The ENTIRE national spending budget of Cuba is estimated at $60 billion for 2012. Of course, it is hard to know for sure because of all the weird accounting due to the double money system. It is clear that after unification the national spending numbers will decrease. Anyway, missing out on doing business in Cuba for Americans is like missing out on the State of Maryland where spending last year was $60.3 billion according to GAAP. Given the uncertainty and risks associated with doing business in Cuba and the Castros track record of not paying creditors and putting foreign businessmen in jail, I would rather take my chances in Maryland. By the way, Maryland will do about $5 billion dollars in tourism business this year.

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