CUBA-USA/ECONOMY-ENTREPRENEURS Cuban entrepreneurs survey changing landscape amid normalisation of ties with U.S.

Record ID: 149194

  • Title: CUBA-USA/ECONOMY-ENTREPRENEURS Cuban entrepreneurs survey changing landscape amid normalisation of ties with U.S.
  • Date: 18th July 2015
  • Summary: HAVANA, CUBA (JULY 14, 2015) (REUTERS) VARIOUS OF CUBAN ECONOMIST AT CUBAN CENTRE FOR ECONOMIC STUDIES, OMAR EVERLENY, WORKING ON HIS COMPUTER
  • Embargoed: 2nd August 2015 13:00
  • Keywords:
  • Location: Cuba
  • Country: Cuba
  • Topics: General
  • Reuters ID: LVAAN2U30F7L2XU4ZO0Z9QHA7VMQ
  • Aspect Ratio: 16:9
  • Story Text: The coming normalization of ties between Cuba and the United States promises to permanently alter the Cuban economy, and in speaking to Reuters, entrepreneurs on the Caribbean island see the moment as both a once-in-a-lifetime opportunity and challenge they will have to meet.
    On Monday (July 20), the Cuban flag will be raised over its mission in Washington for the first time in 54 years. While the U.S. embassy in Havana will also be automatically reopened, no American flag will fly there until Kerry visits to preside over a ceremony, U.S. officials said on Friday. He is expected to travel there in August.
    The developing normalization - the U.S. economic embargo still stands - that began in December has been accompanied by the easing of U.S. travel restrictions to the island. Preceding the joint historic announcement in December, Cuban-Americans, Church groups and students gained greater access to Cuba, and U.S. airports were allowed to provide more service to the island. Additionally, alongside the normalization, Washington has opened up exports of telecommunications, agricultural and construction equipment, permitted more travel by Americans to the island and opened banking relations.
    But general tourism is still banned. Nevertheless, the era of change has already resulted in historic tourism numbers in Cuba. According to the Cuban tourism ministry, 2014 saw a high of 3 million tourists to Cuba, a five percent increase on the prior year.
    And according to Omar Everleny, an economist at the Centre for Economic Studies in Havana, the uptick creates an opening for Cuban business.
    "Cuba has to get ready. I think that we aren't prepared because tourism has mostly been developed outside of the capital (Havana.) Tourists from the United States don't just come for beach and sun, and so this is to be a great challenge. Cities people like to visit, like Havana, has very little to offer hotel-wise, and so there's an opening there for the private sector. And in fact, the statistics show that around 18,000 U.S. tourists come and stay private homes. That creates a challenge; American tourists prefer to stay in hotels," he told Reuters.
    Cuban President Raul Castro has said Cuba is ready to peacefully coexist with United States, but he has made it clear that Havana does not intend to abandon single-party rule or the state-controlled economy.
    Nevertheless, since taking the reins of power, Raul Castro has proven less bellicose toward America than his brother, Fidel. He has also given more autonomy to state-run companies, slashed state payrolls and subsidies and reduced the state's role in agriculture and retail in favor of a growing "non-state sector".
    And business owners, like Remy Dou Marchin, the owner of the "Garden" restaurant in Havana, see great potential for growth.
    "A tourism sector as the one from the United States that is to come and go in the country (promises to create change), and it's a population that has a great desire to get to know this country, and this isn't just the United States, but the whole world. But regarding the U.S., it's just 30 minutes away by plane, 30, 45 minutes, and you're there. So it's a lot of tourism that will come and could be very beneficial, not just for the private sector but also the state sector, the hotel industry. Everyone is going to benefit," he told Reuters.
    Cuba's history has long been intertwined with that of the United States. The two countries are only separated by 90 miles (145 km.) of sea, and the island nation is already seeing a landmark incoming of Americans.
    "The stats tell it plainly. In the first six months of this year, tourism from the United States, or the visitors from the United States, they aren't just tourists, as a whole has grown by 50 percent. If that trend continues through the end of the year, we are thinking there really could be a noteworthy uptick (in tourism)," Everleny, the economist, said.
    Cuban workers, like Ivan Iglesias of the Havana restaurant, "El Litoral," don't downplay the challenge that lays ahead for the Cuban population, which roughly totals 12 million.
    "A more dramatic opening (of ties) challenges us to be ready for the great influx we know is coming. Everyone from the United States is going to come to get to know (Cuba), to visit and get to know it. And we have to be prepared for that," he told Reuters.
    While Obama is using executive powers to poke holes in trade barriers, Republicans who control Congress have made clear they will not let him entirely dismantle the embargo. Washington imposed economic sanctions as Fidel Castro steered the island along a socialist path that made it a close ally of the Soviet Union, and severed diplomatic ties with Cuba in 1961.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2015. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: Video restrictions: parts of this video may require additional clearances. Please see ‘Business Notes’ for more information.
Register