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US-Cuba Business Outlook and Overview – Part Four

fihav, business, cigar display
Surveying the cigars, Cuba's most popular brands at the FIHAV 2017. Photo by Sue Ashdown.

This is the final article in a series of articles on the US-Cuba Business Outlook by Sue Ashdown.  Ms Ashdown is Founder and President of IcarusCuba, a consulting firm in Havana.

Overcoming the trap of negative thinking

Moving forward, we believe that US companies and legislators should not capitulate to defeatist attitudes. They should insist on viewing Cuba as an opportunity, not a problem, and continue their legal travel to Cuba to learn where they fit in, or don’t – even if the US Embassy is unable to meet with them due to short staffing. (We’re quite sure that when push comes to shove, staff will be found, but if not, Cuban managers are not in short supply.) A business visa can still be obtained from this side of the water (Havana), and foreign business visits are important to demonstrate that fear and intimidation will not force the horse back into the barn.

Purely on a business level, a regulatory freeze opens the possibility of a calmer environment that allows US companies with foresight to move ahead of their more fearful competitors by completing their market research and ticking off the unglamorous requirements in the Cuban process, as demonstrated by John Deere. While it is true that OFAC will for the moment not be granting the kinds of licenses that were granted to Marriott and GE, an OFAC license is not a magic panacea. The embargo is still the real problem, and no president can change that. In the meantime it’s important not to ignore the possibility of getting other ducks in a row, and one of those is certification, another is market research.

For that, businesses should keep in mind that truly useful fact finding missions are not the ones promoted by tour operators selling the chance to make “valuable contacts” for the future. Not only are those contacts constantly changing, business approval in Cuba is never a matter of convincing one or two highly placed people. (Beware the consultant who claims some personal connection to Miguel Diaz Canel.) The Cuban system doesn’t work that way. It’s collective, not individual, and business is no exception. Decisions start at the ground level, through committees, before traveling higher up the food chain.

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The great informational divide

Information is always a challenge to obtain in Cuba, even for consultants who are based here. Probably the most damaging thing about the terrible US/Cuban relationship is the lack of trust, on both sides. This presents particular problems when it comes to moving beyond the thin layer of information offered in the Ministry of Foreign Investment’s glossy portfolio.

As he presented that portfolio this year, Foreign Investment Minister Rodrigo Malmierca spoke openly of Cuba’s need to improve its efficiency in the investment approval process and we heartily agree, but the problem is greater than that. Consideration should be given to senseless barricades that exist from the outset, especially in non-strategic sectors. Investors and their representatives cannot eternally be dealt with on an eyes-only basis, where simple questions are only answered once the investor obtains a business visa and touches Cuban soil. It’s the equivalent of demanding that a potential investor obtain a marriage license and a honeymoon suite for a first date. It wastes resources and generates ill-will; two luxuries that Cuba can ill afford.

For now, ordinary information gathering is a matter of patience and persistence. It’s critical to have someone on the ground who is skilled at breaking through artificial barriers – a deep understanding of Cuban culture is essential for the task.

Many people in Miami have a deep understanding of Cuban culture, but it’s important not to conflate Miami and Havana. Miami’s view of Cuba is predominantly negative, whether it comes from the old guard, eternally resentful about their losses, or the new guard who doesn’t have the same axe to grind but still starts from the premise that Cuba would be so much better if it was just a little more like the United States. This is particularly unhelpful when it comes to business, which demands a more objective focus, and it’s absolutely disastrous when it comes to honest, unbiased market research.

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We recommend getting out of the sandbox. Havana is the gateway to Cuba, not Miami. We urge clients to seek assistance from people who grasp that: people with a sincere interest in seeing both sides prosper, without impositions or preconditions.

The recent setbacks in relations are real, but they are temporary. They ought not to be granted more importance than they deserve.

Read the other articles you may have missed in this series, “US-Cuba Outlook and Overview,” by Sue Ashdown:  Part I, Part II, Part III.

Ms Ashdown also writes for her own blog Cuba Reality Check – life in Cuba.

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