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Open for Business

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Open for Business

Building the New Cuban Economy

Brookings Institution Press,

15 min read
10 take-aways
Audio & text

What's inside?

What does Cuba’s mix of promise and uncertainty portend for its fate now that the embargo is over?

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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

US airlines, cruise lines and hoteliers now can do business across the Florida Straits in Cuba. They shouldn’t expect easy profits, argues Brookings Institution fellow Richard E. Feinberg in this clear-eyed look at the opportunities and challenges that Cuba poses. The Cuban government is notoriously difficult to work with and slow to make decisions. Wage controls mean that Cuban workers may resist the usual motivations. Feinberg doesn’t offer advice for navigating Cuban commerce, but he provides useful insight into the advantages and disadvantages of investing there. getAbstract recommends Feinberg’s study to investors, entrepreneurs, consultants and established firms considering doing business in and with Cuba.

Summary

Embargo

In the 1950s, US companies provided electricity and financial services to Cuba and owned property there. Tourists came to Havana by plane or boat, and prominent Americans embraced Cuba. Ernest Hemingway lived there. John F. Kennedy and Frank Sinatra visited. American mob bosses and crime figures such as Meyer Lansky owned hotels. Then came the 1959 revolution. Fired up by Fidel Castro’s anti-American rhetoric, Cuba expropriated American-owned assets.

The Cuban missile crisis of 1962 became “the most dangerous moment in the Cold War.” Once-warm US-Cuba relations froze. For decades, the US economic embargo shut down nearly all trade with Cuba aside from small-scale travel and humanitarian aid. In the 1990s, candidates could win or lose presidential elections based on the Cuban-American vote in south Florida. Cuban expats wanted to maintain the blockade, so Bill Clinton and his predecessors kept the embargo in place. By 2014, though, a poll found that more than two-thirds of Miami’s Cuban-Americans supported having normal relations with Cuba.

A New Openness

In 2015, Secretary of State John Kerry formally reopened the US Embassy in Havana. In March...

About the Author

Former special assistant to President Bill Clinton Richard E. Feinberg is a nonresident senior fellow in the Latin America Initiative at The Brookings Institution and a professor at the University of California-San Diego.

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