The Road to Cuba
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The Road to Cuba

The Opportunities and Risks for US Business, Revised and Updated Edition

Knowledge@Wharton
Wharton Digital Press, 2016
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8

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  • Innovative

Recommendation

Knowledge@Wharton outlines the tantalizing business prospects in Cuba, just across the Florida Straits from the United States. Air lines, cruise lines, hoteliers, farmers, lenders, real estate investors and energy executives all want to do business with the Caribbean’s largest island. Whether the profits will materialize in the wake of President Barack Obama’s visit is the wild card. The Castro regime is notoriously intractable and rigidly opposed to what Washington wants. This astute primer describes the risks and rewards of investing in or trading with Cuba. Its conclusions promise opportunities and warn of perils, much like the island nation itself. getAbstract finds that investors, policy makers, executives and entrepreneurs wondering what normalization will mean for US businesses will gain a great deal from this brief review.

Summary

50-Plus Years of a Deep Freeze

In December 2014, after a Cold War freeze of more than 50 years, President Barack Obama announced plans to thaw US relations with Cuba. In March 2016, he became the first American president to visit Cuba since Calvin Coolidge in 1928. Obama believes ending the US embargo could put Cuba on the path to economic health and political freedom. Yet, in Havana, the regime of Cuban president Raúl Castro continues its pattern of political persecution, censorship and state control of the economy. Still, the loosening of trade restrictions has sparked intense interest from travelers and businesses. American travel to Cuba jumped more than 50% in 2015. In February 2016, Washington and Havana agreed to resume commercial flights between the two countries and possibly to restore direct postal service.

As Obama eased restrictions on Cuba in 2015, he focused on “people-to-people” links in travel, communications and banking. Celebrities such as Paris Hilton and Rihanna trekked to Cuba; so did CEOs and tech executives. Cuba counted 3.5 million foreign visitors in 2015, a new annual record, up from three million in 2014. Yet, “a general ban on American...

About the Author

Knowledge@Wharton is the online business analysis journal of the Wharton School of Business at the University of Pennsylvania.

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