End the Embargo

By Hannah Wallace June 30, 2006

Six years ago, you started a newsletter promoting trade with Cuba. Why? Cuba is growing very fast and has huge potential. It's personal for me, too. I grew up in a divided Berlin. I was there when the wall fell. The fall of the wall was not preceded by an embargo; it was preceded by a huge wave of contact, trade and investment, and hundreds of millions of Westerners visiting East Germany.

Who is your target audience? Businesspeople, large corporations, Fortune 500s, such as Caterpillar and Arthur Daniels Midland. Then we have companies that are doing business with Cuba, exporting food and agricultural commodities; farmers, trade associations, attorneys, customs brokers, activists, trade consultants and congresspeople. And we provide this publication free to Cubans. We're probably the only commercial U.S. publication that has more readers in Cuba than in the United States.

How often do you go to Cuba? I try to go twice a year. We have a correspondent in Havana. And we have several columnists who travel there frequently.

What's happening in the Cuban economy? It's recovering from its terrible crash in the early 1990s when the Soviet Union disappeared. They're investing in the infrastructure that had been obsolete and decaying, rebuilding ports and railroad tracks. The airports have been built up already because of tourism. Cuba is buying 8,000 buses from a Chinese company. These are billion-dollar contracts. They [are buying] 500 railroad wagons from a company in Iran. The Cubans have cash to spend, and they are spending it.

Aren't American businesses eager to jump in? American businesspeople are desperate [to do that] right now. The only thing we can sell to the Cubans is food, agricultural goods and healthcare items. And Florida, the state closest to Cuba, is being harmed most by the wall we have and will potentially benefit the most.

Business interests are pushing hard. The latest newcomer might be the oil industry. It's a mixed blessing to have the oil industry getting involved in foreign policy, but in this case I think it's beneficial. A Spanish-Indian consortium is there, and there is a likelihood that they are going to hit the jackpot. It's on a block about 50 miles from Key West, in Cuban territorial waters. Chinese oil companies are beginning to drill in Cuba onshore right now, but they are probably going to go offshore as well. A Brazilian oil company and a Canadian oil company are trying to get together consortiums. Houston oil companies are extremely concerned about not participating in that piƱata.

What might people find surprising about Cuba? The government has been fairly efficient in maintaining an information flow. There are limited debates within the Communist Party's daily newspaper about deficiencies and problems: "Why doesn't food arrive on time? Why can't I get material to renovate my flat?" Believe it or not, investigative reporters at the official newspapers call officials and try to dig up the real news. Cubans don't hold back their opinions about what's going on in the country. [They are] chock-full of criticism when you talk to them, and they are quite well informed.

Are Cubans ready to embrace the larger world? The Cuban government has been fairly restrictive in letting people travel. You need an exit visa to leave, and Cubans who travel abroad are only allowed to travel in an official function. There is a true thirst for contact outside the island. There are 2 million foreign tourists coming to Cuba every year, but that's not enough. Cubans have the highest levels of education, along with Uruguay and Chile, in Latin America, so they know a lot about the world and they want to exchange what they know with people who know it firsthand.

Is your publication censored? Not in six years [since it was founded].

What are the Chinese doing in Cuba? Almost half of Chinese direct foreign investment in the past five years was in Latin America, and Cuba was a recipient of about $2 billion worth of commitment in direct foreign investment. Cuba could become a manufacturing export platform for Chinese companies to the rest of this hemisphere, not only Latin America but, post-embargo, the United States. Chinese companies have begun to assemble refrigerators, TV sets and PCs in Cuba. They may be assembling buses soon. And since Cuba is too small a market, these goods would have to be exported elsewhere, and Cuba is ideally located in the Caribbean.

One of the biggest Cuban exports is healthcare. Healthcare as a total economic segment of Cuba is in the process of surpassing tourism. They have a fairly developed pharmaceutical and biotech industry and have developed a niche in providing for the healthcare needs of poor people and developing countries. They have thousands of doctors in Honduras, Guatemala, Pakistan after the earthquake, in Africa in the most AIDS-affected area, in Haiti. They provide first-rate pharmaceutical products for diseases. They hate to talk about it in business terms, but it's a huge profit niche.

The Venezuelans and Cubans jointly started a project called Operation Miracle. This is a huge program under which poor Latin Americans get free eye surgery, such as cataract surgery performed by Cuban doctors in Cuba. Last year 300,000 foreigners came to Cuba. Lodging is paid by the Venezuelan government, which is flush with cash because of oil. A first contingent of Americans will be getting cataract surgery in Cuba soon.

Overall, they believe this program could treat 5 million people throughout Latin America. Just imagine if you're a farmer in Bolivia and you were tied to your house because you're blind. You're sent up in a plane, you live in a five- or four-star hotel, then they perform surgery, and suddenly you can see. Imagine what kind of impact this has in terms of how people view Cuba and Venezuela.

The Cubans are now building up eye-surgery clinics in other countries in Latin America. They provide the know-how [and are] training doctors. Potentially, there are billions of dollars the Cubans could earn from that.

When will the embargo be lifted? It should have happened in 1991 when the Soviet Union collapsed. The administration in power in Washington [is] stuck in Cold War times. Their only aim is regime change, not contact. Congress has voted several times in favor of easing the embargo, and I think there would still be a majority if there weren't a Republican leadership in the White House that has repeatedly stated that any easing of the embargo is unacceptable and would be vetoed by the President.

What would be the political cost of lifting the embargo? Maintaining the embargo comes with a high political cost. Bush lost Miami in the last presidential election. Much of it had to do with restrictions he imposed on Cuban Americans traveling to Cuba. Now Cuban Americans can only travel once every three years instead of once every year. One-third of Cuban-American voters in Miami voted for the Democratic candidate, twice as many as voted for the Democratic candidate in 2000. The U.S. policy in Cuba is to wait for Fidel Castro's death and then unleash all means to oust anything that is a reminder of communism and Castro. The problem is that the designated successor of Fidel Castro as head of state is his little brother, who is 74 years old.

The majority of Cubans in Cuba feel they have a lot to lose if interests from the United States would take over. The majority of the population is black. The majority of the Cubans in exile are white. The buildings that Cubans live in today-and own-used to be owned by white people. If the current system of home ownership were abolished, people would come back from exile and reclaim their properties. Suddenly you would have two people hold title to a place. Just imagine the conflict potential.

What is the future of Cuba Trade News?

When we started this six years ago we had to dig for any news that was important in terms of business or economics of Cuba. Today we're having trouble keeping up with news. In the best of all possible worlds, within the United States we could have 3,000 to 5,000 subscribers and another 5,000 [foreign] subscribers. When we have normal relations with Cuba, the big publishing houses will probably become involved. A tiny player like us may be living off its agility. We are years ahead of them in terms of sources and contacts.

But I'm not an economist, I'm a journalist. Plus, I'm not there on the ground all the time. I'm not visiting the shop floor of the manufacturers. But no one is. Let's put it this way: I'm among a handful of people who systematically follow the Cuban economy.

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