HAVANA // As Cuba finally shrugs off the vestiges of Cold War isolation and prepares for its first visit in 88 years from a serving United States president, the potential for long-overdue business expansion becomes increasingly clear.
The Caribbean island is one of the world’s last Communist countries.
But while its president, Raul Castro, insists it will never abandon its core values, he seems determined to shake off the politics of defiance he once pursued as enthusiastically as his better-known brother and predecessor, Fidel, the leader of the revolution that ousted Fulgencio Batista’s regime in 1959.
The thaw in US-Cuban relations is gathering momentum and delivers eye-catching new initiatives almost weekly.
Recent breakthroughs include agreement on 20 daily flights from US airports to the island’s capital, Havana, a ferry link from Florida, further exceptions to the American trade embargo, plans for a US factory to make tractors and Barack Obama’s blueprint, as he prepares to visit Cuba this month, for closing the Guantanamo Bay detention centre for terrorist suspects.
During a visit by Sheikh Abdullah bin Zayed Al Nahyan, the UAE Minister of Foreign Affairs and International Cooperation, the UAE opened an embassy in Havana last October. Agreement was reached on strengthening diplomatic ties and bilateral cooperation amid hopes of Cuba becoming a regional hub for UAE flights.
“I am sure that the next few years will witness the prosperity of our ties,” Sheikh Abdullah said after signing an agreement on air services “between and beyond our territories”.
Cuba is eager to quickly build on the goodwill it earns from foreign visitors charmed by a vibrant culture, the ubiquitous old Cadillacs and Chevrolets and friendly, ethnically mixed people, to reinvent itself as an economic powerhouse of the Caribbean.
But the developing US-Cuban rapprochement, after more than half a century of mutual enmity since rebels swept the Batista dictatorship from power, still has a long way to go.
Republican opponents of the Obama administration are vowing to block the Guantanamo Bay proposal. Even the president stresses lingering concerns about human rights violations.
And, as any visitor readily sees, the island’s infrastructure and services are in staggering need of upgrading. With Cuba exporting an overwhelming majority of the food it produces, and still struggling to manage imports or manufacture consumer goods after decades of reliance on Russia, too many shop shelves remain empty. “Hardly surprising in a country where even a cow is seen as a means of production to be controlled by the state,” as one irreverent Cuban puts it.
But the rate of progress, since the first tentative moves towards diplomatic reconciliation with Washington were made just 15 months ago, would have been unthinkable only a few years ago with Fidel still in office.
Big business is already calculating how to exploit the welcoming new atmosphere in which commercial investment is encouraged more than ever seemed plausible for a state committed to Marxist-Leninism. There are also growing opportunities for small and medium-sized enterprises (SMEs).
Jonathan Showe, one of the most authoritative of US chroniclers of Cuban affairs, says the possibilities for business and entrepreneurship are “mind-boggling”.
“Stand on any street corner in Cuba and 100 possibilities spring to mind,” Mr Showe, the author of Cuba Rising: An American Insider’s Perspective that was published in 2010, recently told the website of the Young Presidents’ Organisation, an international network of young chief executives. “Like other developing countries, Cuba needs capital, technology, jobs, import substitution and export stimulation.”
He lists holiday and retirement home development, IT, agricultural overhaul and the law and accountancy among limitless sources of opportunity as investors seek stakes in the island’s drive to drag itself into the modern world economy.
When the then US president Calvin Coolidge attended a pan-American conference in Cuba in 1928, it was as the head of state of a nation that, in the words of the University of Virginia’s Miller Centre, maintained an important presence in Latin America, its citizens controlling Cuban politics and the Cuban economy.
Mr Showe’s comments on the opportunities are aimed at the American business community. But the commercial attractions of a freer Cuba are open to investors from many other countries.
Germany is among those keenly monitoring progress towards smooth relations between Havana and the rest of the world. Sigmar Gabriel, the vice chancellor and economic affairs minister, called during a visit in January for Cuban SMEs to team up with German counterparts.
Leading names from German industry, including Siemens, Bosch and Mercedes Benz, are already active in Cuba and German business interests are said to be attracted mostly to the agri-food industry, heavy machinery and energy.
But Mr Gabriel, accompanying executives of 60 German companies, said SMEs were best suited to the island’s attempts to update its economic model.
According to the Spanish news agency EFE, he described SMEs – which Cuba pledged to encourage in reforms announced a year ago – as the “backbone” of Germany’s economy.
Tourism to the island is already booming, but there is a catch. Cuba has posted unofficial “we’re full” notices after a year-on-year increase of about 500,000 visitors to 3.5 million in 2015. Millions more are expected to want holidays there as direct travel between the US becomes easier and cheaper.
But hotel accommodation, and services from transport to catering, cannot keep pace with the demand.
There is anecdotal evidence of groups of holidaymakers arriving for pre-booked hotel stays and being told there are no rooms for them, “with Plan B often a very disappointing option” according to one tourism source.
Sanitation is poor, especially outside Havana and, while standards generally are steadily improving, they fall far short of what US visitors are likely to expect.
Despite travel restrictions imposed under the US embargo, rising numbers of Americans have still visited Cuba, either on approved education, sporting and charitable missions or by hopping over the Canadian or Mexican borders for direct flights.
And gaps in quality have not deterred European visitors, wary of the threat of terrorism in such previously popular destinations as Tunisia and Egypt.
To them, Cuba feels immeasurably safer.
“There is no surprise that it is so popular after what has happened in North Africa,” says Sean Titpon, a spokesman for the Association of British Travel Agents (Abta). “There’s also the feeling Cuba should be seen before the improved relations see Americans arriving in huge numbers.”
The consequence of Cuba’s growing appeal is that, according to Abta’s contacts with tour operators, it is currently impossible to book package holidays because accommodation is fully booked, although independent travel remains an option.
No one is quite sure how much time Cuba needs before it can cope with further huge increases in tourism.
The new revolution, aimed at transforming industry and ordinary people’s lives, may take longer still.
But Mr Obama is due in Havana on March 21 for his two-day visit and a further easing of trading relations is bound to be on the agenda when he meets the Cuban president.
European and American pop and rock music, until recently discouraged, is now acceptable enough for the Rolling Stones to be planning a free concert on March 25.
The process of normalisation appears unstoppable.
“Is America ready for Cuba?” one teacher in a 30-strong school party touring Cuba from New York was asked.
“Yes, I think so,” the teacher answered. “It’s time.
“But is Cuba ready for America? It is going to take a seriously amazing job to make it so.”
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