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BEHIND THE HEADLINES: Cuban business opportunities


BEHIND THE HEADLINES: Cuban business opportunities

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OPPORTUNITIES FOR PARTNERSHIPS. And they are in agro-business, energy, tourism, health care and mining. That’s how Donna Forde, Barbados top diplomat in Havana, has assessed Cuba’s changing business landscape as foreign business executives, Bajans among them, descend on the Caribbean’s largest Spanish-speaking state seeking commercial deals in the wake of the diplomatic thaw between Cuba and the United States (US).

“There is a lot of interest in Barbados in doing business in Cuba,” said Forde, Charge’ d’Affaires of Barbados’ Embassy in Havana. “Barbadian companies are seeking to take advantage of the opportunities there.”

Just last month, the US reopened its embassy in Havana after closing it more than 50 years ago. Cuba opened its embassy in Washington D.C. in July. Forde, a multi-lingual career diplomat, was given the job in 2009 of opening her country’s diplomatic outpost in Havana and has remained there ever since. In a telephone conversation from Cuba, she told BARBADOS BUSINESS AUTHORITY in New York that in moving to establish profitable ventures in Cuba, Bajans must remember some facts of life.

“Doing business in Cuba can be complex,” was the way she put it. “Cuba is not a get rich quick country. You have to come in, get to know the people and understand their systems and ways of doing business. They are complex.

“Barbadians should not focus on the fear of a negative economic impact of the opening up of ties by Washington and Cuba but should come to the country and see how it works,” she said. “Don’t operate on the basis of preconceived notions and false expectations. Bajans should come with a view to building partnerships.”

Next is the role of the Cuban state in business and how it can affect Barbadians. Yes, Cuba’s business environment is changing. The normalisation of ties has accelerated the process. Also true, the Barbados mission can and is helping firms and others understand the complexity. But what’s also inescapable is that the Cuban government plays an important role in the life of the private sector.

“The bureaucracy in Cuba can be quite cumbersome,” warned Forde, a graduate of the University of the West Indies, the American University in Washington and the Institut d’Etudes Politiques in Paris. “We can help Barbadians better understand the complexity but there is a lot they must do” on their own.

“Barbadians should be aware, for instance, that the Cuban state runs business. Involvement in some sectors has to be approved by the Council of State,” she explained.

That’s not all. The diplomat, who previously served at Barbados’ mission to the United Nations (UN) in New York and at its embassy in Washington, covering economic, social and commercial issues, insisted that in their rush to do business in Cuba, Barbadians shouldn’t ignore another bit of reality: the US economic embargo that has been in force for half a centure hasn’t be dismantled. And until the US Congress repeals it, many of the hurdles to doing business there will remain.

Barbados and its Caribbean neighbours, especially Jamaica, Guyana, Trinidad and Tobago and Grenada, had for years insisted without success that the embargo be abandoned. Indeed, long before it became the popular thing to do at the UN, CARICOM member states routinely backed a resolution that demanded the lifting of the embargo. Although the Barack Obama administration eventually broke the diplomatic logjam, the White House can’t act on its own to remove the embargo. The Congress dominated by Republicans who are opposed to normalisation isn’t ready to budge.

“The punitive elements of the economic embargo cannot simply be pushed aside,” warned Forde. Barbados, she explained, had anticipated action on the embargo more than a decade ago and established the “architecture” needed to facilitate trade and investment with Cuba. For example, the two countries signed a double taxation agreement and a bilateral investment treaty in the late 1990s, just before the turn of the 21st centure. The goal was to create opportunities for trade and investment between the two countries.

“Cuba has double taxation treaties with few countries and Barbados is among the eight states on the list,” she explained. Interestingly, at least one Canadian company has used both the agreement and the treaty for several years to do business in mining in Cuba, Forde pointed out.

She doesn’t have nightmares that most of the visitors who now flock to Barbados would suddenly switch their interest to Cuba.

“Barbados is at the higher end of the tourism market. We have a different type of tourism product. Cuba appeals right now to visitors who spend less for a vacation that tourists in Barbados. Once we continue to pay attention to the quality of what we are offering visitors, we would maintain our niche of the market,” she said.

“Quality and service are essential. But Barbados must be aware that several hotel projects that would bring thousands of rooms onto the market are being planned and in the long term can affect us.

“The message is that our tourism industry can’t be complacent. It must continue its rfurbishment programme. Indeed, there are opportunities for partnerships in tourism charter services and multiple destination packages that include Havana and Bridgetown, for instance,” she added.

Cuba is planning a trade fair in early November in Havana and Forde thinks Barbadian firms interested in building commercial partnerships with Cuba should explore the feasibility of participating in the interntional exhibition.

“The fair would help Barbadians see for themselves what’s happening in Cuba,” asserted the diplomat.