Foreign Investors and Cuba’s New “Self-Employed Match-Makers”
HAVANA TIMES — A European newspaper reports that a new breed of “self-employed match-maker” has emerged in Cuba, offering “services to first-time, impatient investors.” These individuals promise entrepreneurs that they will guide them in this process, all the way down to the “approval or rejection of hotel projects in keys, golf courses in Trinidad, cranes in Matanzas, toilets in Havana and turbines in Ciego de Avila.”
The paper adds that “the generosity or cheapness of the hasty entrepreneur is expressed by the quality and quantity of the feasts and tips advanced to the charlatan, it is a measure of the latter’s eloquence.” The article concludes that this is “the blossoming scam of the Cuban facilitator.”
We have to acknowledge these con artists are very good at what they do. They play in the big leagues, conning seasoned businesspeople. Some manage to “suckle at the teat” of these companies for as long as a year before the foreign investor realizes what’s going on.
Generally, these people were once involved in politics, were State Security agents or even members of People’s Power Committees. These positions allowed them to meet or learn of important figures in the country.
Contacts are a tool that, properly used, can earn one a lot of money. “I met the son of so-and-so and he mentioned they’re studying the possibility of making investments in your sector, and he can guarantee your name is at the top of the list.”
Of course, “the son of so-and-so is asking for money in exchange for this, and it can’t be a small amount, because he has to share with the Minister of this-and-that, who has to sign the document.” Entrepreneurs are wary of handing anything over before a contract is signed, but, if they don’t, they are told that “the competition is going to get the cake.”
On occasion, the son of so-and-so doesn’t even know they’re using his name or that of his father, but, no few times, they are also part of the scam. Their family ties with powerful men and women allows them to develop a profitable and bourgeoning “influences” business.
It’s hard to determine whether they act as intermediaries for their parents, in order to improve the family’s finances, or whether they do it “on their own,” but the fact of the matter is that there are more “pampered children” involved in dealings with foreign businesspeople than is recommendable in terms of preventing corruption.
No one offers any precise information: they speak without mentioning names, with half-sentences and codes, giving the foreigner the impression that they have to be careful and that asking too much could be dangerous for everyone. “Do you know how many people have been busted?”
Many of these “match-makers” are the contemporaries of the children of Cuban leaders, sometimes even the grandchildren. They’ve gone to school or military academy together and actually do know many of them personally, such that they can greet them in public.
These spoiled rich kids move in the same “circles” foreign businesspeople do, such that making contact with them is easy. Nothing reassures the victim more than seeing his “intermediary” get up from the table at a posh restaurant and go over to say hello to the son of so-and-so, who is dining at another table.
They may in fact be partners in the deal but, even if they’ve only just said hello, the match-maker will return with the news that “the son of so-and-so agreed to present your offer, but there can’t be any direct contact, for obvious reasons.”
The lack of transparency in the economy makes it difficult to know what the normal procedures are, who are responsible for approving contracts and projects, or why a bid is ultimately lost. As it happens, the government is in no obligation to inform the entrepreneur why their operational permits are cancelled.
To make matters worse, foreign companies are barred from any direct contact with the Cuban client. All contact is made through an import company that acts as intermediary, even if this company has never even heard of the product being sold.
Knowing the officials who work in these import companies is worth gold, literally. This is also fertile ground for the “match-maker,” who will always pocket part of the bribes, even when the deal isn’t sealed because the “another company gave my partner’s boss more money.”
This way, the leave the door open for an even bigger bribe next time around, “as the boss also has to get a cut.” Some businesspeople desist the first time, others continue to bet and to lose their money.
The one who always wins is the “match-maker,” even if this means the Cuban economy is denied good business, corruption spreads and, what’s worse, the false impression that Cuba is a “banana republic” is given foreigners.
3 thoughts on “Foreign Investors and Cuba’s New “Self-Employed Match-Makers””
This guy can’t be happy with either Capitalism of State or Capitalism. Go back to Uruguay.
I know what you mean Fernando, that is why I made a trip to Cuba over the Christmas holiday just to see for myself what investment opportunities are really viable. These “Match Makers” operate at every level and in every country and it is always a game of making money for them…but life is not a game, it is a test. My advice is to spend some time in Cuba, with Cubans who are growing the private sector in the industry that you have interest in. Restaurant owners, Casa Particular, taxi operators or whatever your business interest are. But no matter how far South you go in Florida, or how many people you know there, remember that you are not in Cuba and this sort of business research has to be done by people who are willing to spend some time in Cuba. Look at businesses that will constitute the infrastructure that foreign companies will need to have in place so that they can operate in Cuba and find Cubans that will be good honest partners. The Cuban people are the strength of Cuban and no individual, not even at the highest level will be able to put the fix in and guarente a good outcome for an investment there. A good early (over the next 3 to 5 years) investment is something that the foreigners going to Cuba will need or want and are willing to pay for since those foreign companies will be each other’s early customers, much the same way tourist will be the customers for Cubans in the growth sector for the next few years. Tourists and foreign business people need a place to sleep and work, transportation on the ground, communications within Cuba and a way to communicate with people back home and remember that the Cuban people have their own ideas about how they want to live and what their values are and never forget that and also remember that every pot of honey comes with its own bear.
Fernando, such is the way of life in any business venture. In the US, restaurants, which my family has been involved in for decades, we’ve had good deals and bad ones. One in particular lost our investment group over a million dollars but others more than made up for the loss. It’s part of the game and survival of the fitness is how it works. Buyer beware!!
Comments are closed.