Category: The PT Law Blog

Jacobson further explained that the President was being courteous when he shook hands with the Cuban leader. She wished that people focused on the President’s speech especially the line of those nations who were in “solidarity with Mandela, but would not tolerate the same dissent in their country.” She said that the President did have the Cuban government in mind when he made that statement.

She also noted the sad irony that 20 Ladies in White were arrested in Cuba along with others Cuban dissidents in the island, while the Cuban government was remembering Mandela’s struggle for freedom against apartheid. She also noted how average Americans through various cultural exchange, religious institutions, and etc.. are visiting Cuba.

She stressed numerous times that the White House has been clear with regard to Cuba, but disappointed when Cuba takes a step back in terms of freedom for the Cuban people. Noting that this year marks the 5th anniversary of Alan Gross imprisonment in Cuba, Jacboson stated that no new relations with Cuba could be discussed until Mr. Gross is released.

Brazil: An Evolving Relationship

The next question dealt with Brazil. She discussed that the Pacific Alliance will eventually change from a geographic organization to something different. She reiterated Secretary Kerry’s concern for a regulated internet, in wake of the NSA spy scandal, given the fact that the internet is an engine of innovation despite some of the problems. The third question dealt with the issues of emerging democracies. She did state that just because she did not mentioned it in her speech, that does not represents that this issue was not a priority in the administration. She cited the most recent elections in Honduras. But she also explained that democracies are not just about elections, it is about governing as well.

Venezuela: Productive Relationship Desired, But Rough Road Ahead

The final question dealt with Venezuela. She explained that the US wants to have a productive relationship with Venezuela, but that Venezuela is the one responsible for placing the obstacles in the relationship. She expressed the U.S. commitment to meet with all people-government, opposition, labor, etc.

All and all, it was an interesting and informative session. These issues are of great interest in South Florida, a gateway city and financial hub for the Western Hemisphere and Latin America. Because political and economic developments in Latin America can greatly impact our area, our clients are always asking us for updates on these matters.

 If you factor in the billions of dollars Cuba owes foreign lenders, as well as the confiscated property and related U.S.-Cuba claims, Cuba will have no choice but to work with foreign investors to start digging out of this problem. No matter the faction, all of them understand that a key element of success will require foreign economic assistance of various forms. This will be needed for many reasons, but most importantly, foreign capital will be needed to stabilize the Cuban economy.

While tourism and commodity exports are likely to represent the prominent source of Cuba’s monetary earnings during the early stages of an economic transformation, a major acceleration in economic growth and trade will require large inflows of foreign direct investment and services. Of course, American companies will have to wait until the economic embargo is lifted before they can participate in this process.

Cuba’s current and future leaders understand that their main economic support will come ninety miles to the north. Once a transition government is recognized under U.S. law, significant economic investment from the U.S. will most likely occur when investors are convinced of Cuba’s commitment to a more open society consistent with U.S. law and policy, free markets, the rule of law, as well as the protection of property rights and the enforcement of commercial contracts. These are just a few of the current underlying preclusions to the United State’s involvement with Cuban economic growth.

Investing in Cuba’s infrastructure will provide many lucrative investment and business opportunities. For example, Cuba does not have enough hotel rooms to accommodate tourists. New hotels will have to be built and so will the infrastructure to support that line of business in order to accommodate the expected large influx of new tourists that will visit the island. 

The island’s transportation system is in shambles, the electrical grid system is very outdated, roads and bridges are old, most of the country’s water supply is lost by leaks along its aged pipes, and the railway system is almost non-existent. The airports and seaports are also in need of repair and modernization. The list of critical infrastructure updates and repairs that need to occur to support a vibrant economy is much longer and more extensive.

One thing Cuba has in its favor is a very high literacy rate compared to most other countries in Latin America. This fact can and will make it very attractive for business looking to outsource work to send business to the island in many fields. The Cuban people are also extremely resourceful and hard-working. With the economic and political freedom, the transition process from a closed to open economy in Cuba should provide a fertile foundation for exponential growth that will surpass the successes of similar transition economies of Eastern Europe after the Cold War. 

At Poblete Tamargo, we are very well-prepared to help your company — no matter how big or small — to start developing a strategic plan for your business whether you seek improvements on the inner workings of your business or are looking to upgrade your company’s way of or potential interfacing with Cuba and its economy. We can also advise you on current U.S. law and regulations, as well as how Washington will play a pivotal role in Cuba transition matters.

Our understanding of the political, economic and social climate on Cuba in particular gives us the added advantage of improving your position for the future when US Cuba relations resume. The time to plan for this future is now. Give us a call so we can discuss your interests and start preparing your plan with you to enter the future free and democratic Cuban marketplace.