Island for Sale – Looking for a Sugar Daddy
By S.E. Lewinski
HAVANA TIMES – Considering my experience in real estate, property sales, and business ventures…let’s take a look at who would want to purchase Cuba. Being in Cuba multiple times, I will apply my first-hand knowledge to assess the property:
• 60 years of antiquated government management driving the economy into shambles
• Little water, electricity, food, money, medical care, and gasoline
• Infrastructure dilapidated maintenance including utilities, streets, and buildings
• Natural resources are available but mismanaged into worthless assets
• Human resources highly educated but no jobs available besides being a taxi driver
• Island living on life support for oil, food, and money from other countries
• 500,000 human resources escaping the island between 2021-2023
• Multiple over-built resorts with limited or no return on investment
Assessment of Property: Distressed Property Sale
“A distressed sale transaction can occur in a business that is showing losses consistently or is on the verge of insolvency. The business owner sells his/her business at a substantially lower price than the real value to liquidate the residual earnings from the investments.”
________________________________________
Potential Country Buyers:
China: Already has a foothold in more prosperous countries in South America. The primary interest of China is making money and access to resources and any potential political advantage. China currently has its eyes on Taiwan, which has electronics, materials, and industrial manufacturing, which, of course, Cuba has none of these items.
Russia: Once the major sugar daddy for Cuba, has lost interest as a political ally. Cuba in the past possible military strategic location, but with high technology weapons maintaining a presence has zero economic value. The island also reneged on its financial payments including: “President Vladimir Putin forgave over 90% of the debt owed to Russia by Cuba. The forgiveness totaled $32 billion.”
Mexico: Stocks have performed well and currencies, including the Mexican peso, remain strong. All this due to prudent fiscal and monetary policies, balance in external accounts, important remittances, higher interest rates than elsewhere, less volatility of the peso and a relatively good macroeconomic position. There is the element of the Mexican Cartels, and Cuba is not an attractive market for foreign criminal groups due to its poor economy.
Venezuela: Currently has its eyes on Guyana as a territorial dispute, but everyone knows it’s all about the oil. For sure Venezuela could foot the bill to purchase Cuba and extend its compatible socialism to a larger landmass. For the people of Cuba, they would be trading one totalitarian government for another.
Spain: Historical globalization and funded Christopher Colombus to discover Cuba in 1492 and claimed the island for Spain. Then in 1511, Diego Velázquez de Cuéllar set out from Hispaniola to form the first Spanish settlement in Cuba, with orders from Spain to conquer the island. During the last 27 years the exports of Cuba to Spain have increased at an annualized rate of 1.5%, from $92.7M in 1995 to $139M in 2022. In 2022, Spain exported $812M to Cuba. Spain’s primary issue is capital to finance a purchase considering at the end-2023 public debt-to-GDP stood at a historically high level of 108%,
USA: Is the wild card buyer who has the resources to develop Cuba back to a state of higher valuation. With an estimated 2.4 million Cubans currently in USA, the exchange of resources would be an advantage including entrepreneurial repatriation and economics. Cuba could be redeveloped into a proximity country versus. resources in Asia which are subject to political, environmental, and distant supply chain logistics.
Israel: The nation could do a slow migration of their population from the Middle East and forget about angry neighbors, incoming missiles, and political needs to wage wars. The increase in land area would be 5X over the current state. Compatible social, religious, and prior culture of turmoil so Israelis should assimilate quickly into the island life. In addition, resolves island relationships with the USA, and becomes a global ally in Latin America.
________________________________________
Property Classification: D
• This class is called the “war zone.” The neighborhood is older or in a serious stage of neglect.
• Repair costs and other expenses very high. No capital preservation with this class of asset.
• No decent access to good amenities, schools, industries, or jobs.
• Crime is high and often violent. The tenant mixture is approaching 75 to 100 percent with very low pride of ownership. Even law enforcement will hesitate to visit these areas.
________________________________________
Property Valuation:
Cuba is a property that is well-positioned for re-development, industrial growth, and human resources utilization. The GDP (gross domestic product) in Cuba is forecast to amount to €85.65B (100B USD) in 2024. General government gross debt in Cuba is expected to be 54.16% of GDP in 2024. The major issue is that the infrastructure requires extensive investment to modernize for the local population as well as industrialization. Cuba is a strategic purchase as a distressed property that can be developed into a world-class country under proper management and economic planning.
Toss out the current thugs in power. Bring in democracy, invest in agriculture, infrastructure and bring to life this beautiful nation once again.
The article written by S.E. Lewinsky about CUBA could be considered as harsh, directly critical and analitically manipulative. This article does not entice anyone to do any future business if ever intended. What does the writer foresees? An impending total collapse of Cuba ?
Is well known to political pundits and readers that Cuba is a country whose poorly managed economy traverses its greatest socio-economical XXI Century crisis. It is somehow interesting to read and critically analyze it without biases.
To a Cuban national, Cuba is not a “Decaying Real State Property for any Realtor or Salesman to appraise, advertise and sell as an ” Opportunity” or a “Commodity”. It is s country with an interesting rich socio-economical history, worthy to read and consider meticulously, if one truly wants to seriously write about it. Something that I think Mr.Lewinsky didn’t do.
It is True that the country’s economical administration has been, regrettably, so poorly managed that the country has never been so close to be a truthful ” Shamble “. But thanks to this, impending circunstancial reality, the country’s government and Cuba’s Communist Party leadership are actually being forced, like never before, to re-steer the country’s economy and its administration from grass roots level all the way up to the very top. It is a “Live or Die” situation.
Cuba main Industry was the Sugar Industry. The so called “Álvaro Reinoso” rationalization undertaken a few years ago, contrary to what Castro’s government had initially planned, was a total disaster leading to the industry collapse and demise. Out of some 256 Sugar Mills, there is only a fistful of Mills still operating.
Cuba, which as average used to produce 5 to 6 million tons of exportable Raw Sugar per year, is incredibly importing Sugar because the output of the last three harvest has been historically low. The last of such Harvests much below to what the domestic market requires for itself (Cuba’s last harvest production fell to just 350,000 tons of raw sugar !! )
What to do now ?
To Surrender the Country to outside Buyers ? To give it away to Israel ? No way Jose !!
How to address the issue of the Reconstruction of Cuba ?
1- I will beging by suggesting that admitting past mistakes is insufficient. Only by rebuilding the Sugar Mills and Refineries and all complete Agroindustrial infra-estructures, CUBA could be bouncing back to become what it once was; A Modern Agroindustrial Country and one of the main Raw Sugar exporters of the World.
Of course, Strong Investments will be needed. Unless a major political change is due, the USA is unlikely to participate due to the self imposed limitations the “Trade Embargo on Cuba” which are enforced on American entrepreneurs. Nevertheless, Other countries such as China and India, both BRICS members, could financially and technically help the Cubans to rebuild its Sugar Industries. Why. These countries produce Sugar out of Sugars Cane too. Even Brazil and Vietnam. Australia, and Mexico will be up for participation. You can name many other possible participants too.
2- Cuba’s Electricity production is paramount and it is another key element to consider when analisying the actual Economical Crisis this Island nation suffers.
The aging electrical Russian developed National Electrical Grid ( 9 major Power Plants + Major Auxiliary Key Power Plants acquired at a later date ) are in poor technical conditions and the country does not have the Finances to import necessary Spare Parts nor New Power Plants to replace the obsolete ones. Russia’s Government can provide both. Although it is a “Big Dream” to come true, Russia’s official “ROSATOM” can move on to help Cuba with new feasibility projects to continue with the construction of the Juragua Nuclear Power Plant of Cienfuegos or temporarily provide Cuba with floating Nuclear Power Plants to help Cuba to provide the necessary power that Cuba demands now. Russia is a key element of BRICS and has been a generous undisputable friend and “Ally” of Cuba during troublesome times. Providing Cuba with Power Plants is critically important. Without energy, there is no development.
And last but not least, Cuba needs a complete overhaul of the Island industries and Services permitting both local Cuban Private companies and Foreign Entrepreneurs to invest in such development. A drastic political reformative action is therefore needed.
The Cuban Government blames the US Trade Embargo on Cuba for most of the current socio-economic problems the country faces nowadays. Is important to acknowledge that the “USA Trade Embargo on Cuba ” is indeed an Economic War that has long lasting damaging effects and impacts on Cuba’s economical development and that is very noticeable but many issues having to do with Cuba’s actual Socio-Economic Crisis are indeed self inflicted and these do have negative social impact conducting to Political Capital Loss. Cubans today do not need lengthy speeches nor Statements charged with Slogans nor eloquent words no more. They are tired of that. All Cubans need is Good Government Administration leading to curtail hiper-inflation and the betterment of Life Quality for all Cubans.
Cubans do not deny the past achievements of the Cuban Revolution led by its late leader Fidel Castro but they do not ignore its mistakes neither. it is time to move on and change and greatly reform from within while there is still time for changing and reforming. Otherwise, the Revolution will inevitably implode otherwise the USA will “softly” take over Cuba without having to fight a shot in a Hot War.
Cuba’s legislation must accommodate to new needs and realities permitting both Foreign and Domestic Private and Cooperative Ownership. The nation must speed up such process getting rid of obstacles that slow down the country’s development.
And finally, as an explanatory appendix to this short answer to Mr. Lewinsky, it is a must to clarify that Cubans have nothing against the jewish people but otherwise. Every entrepreneur from any nation would be welcome to participate in Cuba’s reconstruction including Israelis but the Jewish Nation as such belongs to the Middle East since pre- Christian times. Suggesting to relocate Israel to the Caribbean to be away from its enemies is not utterly Ridiculous but totally Stupid.
Miguel. A. Martínez.
Habana.Cuba.
Where is that beautiful house that is bring foreclosed on in the article. I’d love to restore it.
I agree with Greg Jones % President Obama came to Cuba and witnessed firsthand the beautiful people of Cuba, even going to a baseball game at Latino Americano…Trump has undone the work and destroyed the steps President Obama took to bring us all closer…
Canada would also interested but only with a change in the economic model
Also would want the gov to free all protesters and improve the treatment of health care workers that work for a foreign country.
Revolt will only come from within and America’s Business community should be prepared to help the Cuban people when they want it. Leave anything to the government to solve and it will never be solved. Business should be ready to help the Cuban people and ask for forgiveness later form either the Castro’s or Congress. But we need to keep the lights on and the people property fed, clothed, employed and educated.
JUst because they are allowing the country to fail is no reason to punish the Cuban people. Let’s teach them to fish for a lifetime rather than give them handouts let’s give them a hand up as they say so they can preserve their own culture with is colorful.
I guess Mr Jones doesn’t care about humans ‘rights,, freedom of association and assembly, free press and elementary human dignity as longer the Cuban dictatorship do better economically.
Mr Jones the fact that Cuban government has to buy Sugar to Brazil has nothing to do with any USA policies and more with they dictatorship’s inefficiency.
I don’t understand why a clothing manufacturer isn’t utilizing the available labour in cuba.
2nd thought why wasn’t canada on this list. Canada could benefit from an island nation.
Greg, The internal programs, policies, budget, etc. are set by the unelected Cuban government, 65 years in power, not by the United States. The fact that despite the many billions in gifts from the Soviet Union, Venezuela and many others, the fact that Cuba is not even producing close to half of its basic food needs is not the fault of Donald Trump or Biden. And don’t forget, that golden Obama era you mention was stopped cold by Fidel Castro and all those that followed his words as if he were God. If you don’t believe me read this: https://havanatimes.org/news/fidel-castro-breaks-silence-chides-obama/
Cuba was seeing considerable growth and investment 10 years ago. Entrepreneurs were taking their savings and opening new enterprises. Tourism was booming. The Americans were coming back. Obama had removed so many silly restrictions. And then came the POS named Donald Trump. He labeled the island a terrorist nation and grouped it with Syria, Iran and North Korea. His ignorance is so profound and he continues to demonstrate that daily. Nonetheless it caused young people to leave by the hundreds of thousands. They gave up on a future in Cuba and many of the people who are there now and have the ability to go are planning to do just that. Unless the US removes all sanctions and labels with restrictions the island will continue to deteriorate. The US is responsible for this destruction of a beautiful culture and it should be responsible for rebuilding it.
Too far gone.
Let it collapse and start all over.