CUBA & IRAN: IS IT TIME TO INVEST?
Double
OR NOTHING
F
ifty years of international sanctions rendered Castro’s Cuba so
far removed from much of the modern world, that the things
which many of us take for granted—Wi-Fi, mobile phones, new cars,
cross-border travel and trade—are emerging as new discoveries for
the island’s 11 million inhabitants. Indeed, since the USA decided to
partially lift its sanctions on Cuba in January 2016, following a similar
step taken by the EU back in June 2008, the country’s prospects have
started to look just a little more attractive—and not just for its local
consumers. Speculation across the global business community is
rife, with one question on everyone’s lips: is now the time to invest
in Cuba?
For José Azel, Cuban exile, author and scholar at the Institute for Cuban
and Cuban-American Studies at the University of Miami, the answer
is a resounding ‘No.’ Moreover, in Azel’s view, the question itself is
fundamentally flawed. “The ‘in’ here is a misleading preposition with
reference to Cuban investments,” he says. “Investing ‘in’ Cuba is a
naive expression that closes the eyes to the ‘with’ character of those
investments.” Unpacking his remarks, Azel explains that investing in
the totalitarian state necessarily requires entering into partnership
with the government, and more specifically, with the Cuban military.
President Raúl Castro and his military government control more than
95% of Cuba’s wealth. As such, according to Azel, foreign investors
will be obliged to share their profits with “the guys with uniforms and
guns” if they want to work in the country.
And making a profit worth sharing in the first place is easier said than
done. According to the World Bank, Cuba’s GDP per capita stands
at just US$6,709, with 45 percent of the population living below the
poverty line and more than half of Cubans unemployed. Of those who
do work, 90 percent make less than 487 pesos (around US$20 a month)
—just enough to buy three kilos of chicken and two kilos of rice.
24 Emerging Markets Business Summer 2016 • Issue No. 1
INVESTING
‘IN’ CUBA
IS A NAIVE
EXPRESSION
THAT CLOSES
THE EYES TO
THE ‘WITH’
CHARACTER
OF THOSE
INVESTMENTS.