Cuba Businesses Still Struggle Despite Better US Relations
The thaw in United States and Cuba relations is a major step for both countries, but the business landscape is still a work in progress. Both domestic and foreign entrepreneurs are still gauging the opportunities available to them in the country and trying to find their place in the evolving social and economic community.
Domestic Businesses Emerging
Tourism in Cuba has flourished in the wake of the improving relations with the United States. Travel to the country has not only become easier but also cheaper due to the opening of regular aviation services between the two countries.
With the influx of tourists comes a new and upgraded income stream for the local community. However, people are still struggling, with regular state employees merely earning $30 a month and their living standards on the decline.
Also, the Cuban entrepreneurs or "cuentapropistas" are still finding their footing. According to author, sociologist and Baruch College professor Ted Henken, despite the steady rise in start-up companies from 150,000 to 500,000 in the last five years, the average businessmen are still starting to develop gradually because of the Communist suppression. According to Henken, businesses in Cuba remain a "struggle."
Foreign Investments Test the Waters
A host of companies are already eyeing Cuba as a fresh new market, but it is an opportunity that's not without its challenges. While the relations are thawing, the economic blockade is still in place and key Cuban officials are already calling for an end to the decades-old embargo to be lifted to open the door for U.S. businesses in their country.
"The blockade doesn't allow American companies to come freely to Cuba to make business; that's a problem," Rodrigo Malmierca Díaz, Cuba's minister of foreign trade and investment, explained during a conference at the U.S. Chamber of Commerce in Washington, according to Voice of America. He also added that American businesses are welcome in Cuba.
Mike Gonzalez, a senior fellow at research institution Heritage Foundation, pointed out that Cuba's shaky credit history as a "bad borrower" will likely make American entrepreneurs think twice about operating in the country.
Aside from this, the Cuban government has been "bureaucratic." The officials are being apprehensive of the different businesses eager to enter its market and possibly affecting the political system in the country.
Co-chairman of the business consulting firm Albright Stonebridge Group Carlos M. Gutierrez, who is Cuban-born, explained that the administration is still gauging what the intentions of the United States are, as well as determining "whether U.S. policy is designed to help the Cuban people or whether it is something more like a Trojan horse."