Why ignore Cuba’s welcome mat?

Why ignore Cuba’s welcome mat?

By Sir Ronald Sanders 

Havana Cuba

Havana Cuba

CARICOM businesses could be a real part of a bustling Cuban market of 11 million people in the future says Sir Ronald Sanders

BRIDGETOWN, Barbados, Thursday December 13, 2012 – Cuba has long been an economic, trade and investment opportunity that has been neglected by the 15-nation Caribbean Community (CARICOM) countries.  This neglect could become a matter of grave regret as Cuba continues to open up its economy to other countries and groups of countries, for by the time businesses in the CARICOM countries wake up to the opportunities Cuba offers, companies from Europe, Canada and Latin America might already have filled the space.   

European and Canadian companies are already in Cuba and more are entering the market.  Whenever the US embargo is lifted on Cuba, the space for investment and trade will become even smaller and more highly competitive as US companies (especially those owned by Cuban-Americans) enter the fray.

To the government of Cuba’s credit, it has continuously sought to encourage CARICOM governments to establish machinery that would promote trade and other economic relations between them.   In 2000, Cuba and CARICOM signed a Trade and Economic Cooperation Agreement, but in the 12 years that have elapsed there has been little investment of any significance by any Caribbean companies, except one hotelier from Jamaica.  What is more, despite a request from Cuba to expand the coverage of the Agreement, it has lain dormant.

Under the same 2000 Agreement, CARICOM countries had committed to negotiate a Free Trade Agreement (FTA) with Cuba to be brought into effect in 2001, but nothing was done.  Since then CARICOM countries have each signed an Economic Partnership Agreement with the European Union that would make the terms of any FTA they might now conclude with Cuba less advantageous than it could have been.

This situation has not stopped Cuba from contributing meaningfully to CARICOM countries.  Scholarships given by Cuba have increased the number of persons trained in a range of areas including health, engineering, agriculture, sports and culture.  Additionally, the establishment of clinics and the provision of medical personnel by Cuba have allowed for the delivery of health services many of these countries would not have been able to afford.

As CARICOM’s current Chairman, St Lucia Prime Minister Kenny Anthony has observed,  “what is most striking about the solidarity displayed by Cuba with CARICOM is the quantum and diversity of the assistance that Cuba provides despite the constraints placed on its own economic development by the United States economic, commercial and financial embargo”.

Cuba has continued its assistance to CARICOM countries because the Cuban government recognises the courage it took 40 years ago – on 8 December 1972  – for the newly independent Caribbean countries – Barbados, Guyana, Jamaica and Trinidad and Tobago  – to defy the wishes of the United States government by establishing diplomatic relations with Cuba.  When they did so, Cuba was isolated in the Western Hemisphere except for Canada.  By risking the wrath of the US, that single act by four small CARICOM countries opened the way for other countries to similarly recognise Cuba.

The Cuban government has continuously pushed for the implementation of trade and investment as set out in 2000 Economic and Trade Agreement.  Part of its proposals is that the 6 independent countries of the Organisation of Eastern Caribbean States would not have to grant preferential duty access to Cuban goods, and Cuba would seek preferential access to the markets of Barbados, Guyana, Jamaica and Trinidad and Tobago for an additional 167 products (over those named in the 2000 Agreement) while, in return, it would give these four countries preferential access to the Cuban market for 227 additional products.

There are of course difficulties in transacting commercial arrangements with Cuba.  An important consideration would be the means of being paid and of repatriating profits.  But, Canadian and European companies are doing it.  Further, at least two Trinidad and Tobago banks are operating in Cuba to facilitate trade between the two countries.  So, the means of overcoming these hurdles exist, particularly as Caribbean banks have correspondent relationship with banks in Canada and Europe through which transactions can be handled.

Cuba and CARICOM have had a Joint Commission since 1993 – even before the 2000 Economic and Trade Agreements was signed.  It is supposed to meet every year, but it has met infrequently.   Nonetheless, if it were to meet, it could iron out any practical difficulties so as to make the terms of the 2000 Agreement work.

One of the clauses of the 2000 Agreement provides for the establishment of a CARICOM-Cuba Business Council to review business opportunities, furnish information and promote trade.  So, if it is that the CARICOM business community needs to interact with Cuban companies to explore areas of investment and trade, why not initiate the Business Council to provide that opportunity?

Often when Cuba is discussed in the context of the US government lifting its embargo, it is said that an “opened-up” Cuba will pose a real threat to those CARICOM countries that are dependent on tourism.  There is no doubt that Cuba – without the US embargo – will provide even greater competition than it does now, and in more than just tourism.  But, apart from speculating on that competition, very little is being done to counter it even though another article of the 2000 Agreement specifically encourages cooperation in tourism covering multi-destination travel, training, language exchange and passenger transport.

CARICOM’s business community should insist now on the launching of the CARICOM-Cuba Business Council and they should take advantage of a recent Memorandum of Understanding between the agency, Caribbean Export, and the Cuba Chamber of Commerce to do business.  If this does not happen soon and meaningfully, the Cuban economy will be occupied by others who are taking advantage of it to the exclusion of CARICOM.

CARICOM businesses could be a real part of a bustling Cuban market of 11 million people in the future, if they and CARICOM governments take advantage of what is on offer by the Cuban government today.

Cuba has laid out a welcome mat for CARICOM trade and investment – why ignore it?

The opinions expressed in this commentary are solely those of Sir Ronald Sanders. Sir Ronald Sanders is a Consultant and former Caribbean diplomat.

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Comments

  • Cyril Balkaran  On December 16, 2012 at 10:51 am

    Caricom is a spineless group and they ignore not only Cuba but many opportunities in the past. They are also unable to deal with the trade and agriculture opportunities among themselves and have Guyana’s 83,000 sq mls
    undeveloped. Their unemployed population go by agreement to the North to pick apples and grapes and cannot make a similar decision to go to a CARICOM nation to develop agriculture and explore all potentials that may exist for the region! The same is true for thr Regonial Carrier and Air Transport. Why bother a sleeping CARICOM that has outlived its usefulness. They lack cohesion and brilliant leadership and they have now become a defunct Organization.

    • Thinker  On December 17, 2012 at 7:08 am

      Just a few questions. Does the Guyana Government want unemployed Caribbean citizens to come to Guyana to develop Agriculture. What evidence? Can you expand a bit on the Air transportation issue?

  • Thinker  On December 17, 2012 at 6:58 am

    Sir Ronald is being a bit disingenuous. He needs to be a little more precise in telling us what Cuba has to offer RIGHT NOW, not “in the future” when, we suppose, there will be free trade unions. U.S. food and farm products, medical supplies and some telecommunications equipment are not affected by the embargo; it’s just that the Cubans have to pay cash to the US which is now cuba’s leading supplier for these products. The Cuban government even sends delegations on “buying missions,” hunting for specific American products in third countries for resale back home (usually for the tourism sector). However, if the average monthly pay is still around $15, few Cubans can afford U.S. or Caribbean goods, despite the fact that it is now legal to possess foreign currency. Furthermore, the goods they will pay for are the knockoff Nike, Jordache and other products that proliferate in Havana (through Mexico?).

    Sandals is in Cuba because of the Tourist market, not because Cubans can increase hotel occupancy. Cuba needs investments in its petroleum industry, infrastructure, transportation, and biotechnology. Can the Caribbean be of any help?

  • Wentworth Lionel Carrega  On December 17, 2012 at 3:46 pm

    It is frightening to continue to read over the years-43- the shallow analysis of CARICOM countries and, once again, presented here by Sir Ronald Saunders. Like numerous writers and commentators whose affinity remains trapped in the colonial experience and transcended into the post colonial period, the economic analysis always seen to infer ,as always, that the United States and all colonial powers are to be blamed for the mismanagement and misallocation of resources within the regions. This argument is old, stale, and dislocated from the real world of finances and quickness with which information can be accessed, processed,and implemented on realistic goals, not the rehashing of the “blaming” game.

    Sir Saunders seems not to understand the nature and complexity of functioning and conducting business in a mixed economic environment dictated by a realism of the market place of creative ideas fueled by incentives and motivation. In Cuba there is nothing to motivate the people but appeals in philosophical terms.Take a quick look at sugar production in yr. 2010- 40% below the government’s goal- coupled with Cuba’s inability to produce a staple like rice with production at also 40%. And, most shocking, the private farmers, and there are only a handful, produce 70% of the island’s food.

    Let’s not kid ourselves, Cuba’s economy which is dominated by central planning is inefficient, weak, and inhospitable to private investment. What Sir Saunders needs to understand is that Cuba is totally subsidized, and now specifically by Venezuela and previously by the USSR.In 2010, Venezuela accounted for 40% of Cuba’s overall trade and this has accounted for 22% of Cuba’s annual economic output. Ending the assistance from Venezuela, which provides 105,000 cut-rate barrels of oil daily, and cash payments with US dollars for doctors- $135,000 a year per doctor- which is 27 times the salary of the average Venezuelan doctor- sports trainers and teachers, as per the World Bank; Carmelo Mesa-Lago; Cuban government- “could be a disaster”. In 2011, Venezuela signed deals with Cuba worth $11 billion, and a percentage of this deal would inevitably fuel the fires of propaganda assistance with medical personnel, teachers, and engineers.

    How can he talk about trade with Cuba, by the group of countries in the CARICOM region, without talking about financial solvency of each country, coupled with a banking system that is in line with internationally accepted methods of conducting business,in a changing world. Cuba cannot survive independently nor with the CARICOM participation, unless, as in the 1990s crisis, which forced Cuba to adopt limited free-market reforms to survive, life would continue in the regions to be redundant and void of motivation.

    It is a fallacy to infer or suggest that Cuba is providing assistance to CARICOM countries when indeed Cuba uses subsidized funds to project its image abroad.

    Sir Saunders is stuck in the analysis of a bygone era.

  • Cyril Balkaran  On December 20, 2012 at 11:32 am

    Cuba has been ignored by this CARICOM region since 1962. Guyana traded with Cuba during those perilous years. We sold rice to Cuba and in exchange we brought in Russian Flour in the days of the 80 day General Strike. The US Embargo assisted Cuba to stand on its own and they did stand tall in areas of Medical Research. They provided Nurses and Doctors to many nations in need in Africa and in Guyana during the Burnham era when our own nationals abandoned
    our people and fled from Burnham’s Democratic Socialism. The cubans also provided their Military support to friendly Communist States. It is true the Trade Embargo if lifted now will do us in the region better perhaps, but the big countries have ignored the USA and have been long trading and aiding the Cuban Economy. UK, France, EU, Canada have long supported this Nation. Economic Stagnation is the Political Price you pay for Political Freedom or the lack of the same in this Communist Island of Cuba. Fidel Castro is a great world leader whether the USA likes it or not. The aim of the Trade Embargo was to bring Cuba to their knees but this did not happen and Cuba stands tall in spite of the lack of economic support from Russia.

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