Hang onto your hat. The door to investment in Cuba has just been opened. On Thursday and Friday of this past week, the Cuban government announced the passage of two important pieces of legislation.
The first allows foreign investors to lease government-owned land for up to 99 years. This is a real sea change in the economics of the country and a clear step away from communism. It is likely that this will result in the development of resort properties and golf courses all over the island. Because the new law establishes a lease for years, it is viewed by the Cuban government as being a more secure arrangement for foreign investors, while maintaining ultimate control (at the end of the term) in the hands of the government.
With the bent of the exile community in Miami, one can also anticipate that there will be a flood of new investment by Miami Cubans. The risk in this, of course, is that, in their zeal to influence the politics of the country, they end up getting themselves into trouble with the government and losing their investment. On the other hand, if they are judicious in what they do, they will have a tremendous opportunity to influence the people and the government over a period of time, particularly as their economic contribution to the country grows. As we all know, money talks.
The other change that was announced last week was that Cubans can now grow and resell their own fruit and produce, which is effectively the introduction of permission to be a capitalist. This is a remarkable departure from previous government policy, and it may well indicate that the government is preparing to introduce other economic reforms.
Cuba's economy is such a disaster that it needs all the financial help it can get, but these two changes in policy indicate that Cuban economists have realized that the infusion of investment capital is a far better way to go than trying to borrow their way out of poverty and economic collapse.
For those of us on the mainland, this also represents a good investment opportunity, as those companies that intend to take advantage of the changes move business operations into Cuba. Those that are there early and identify clearly the markets they wish to serve and how best to serve them will profit in a very big way from this early move toward capitalism on the island.
Now, we need to see how the Obama administration and Congress are going to respond to this opening in Cuba's heretofore impenetrable armor against capitalism. With enabling legislation by Congress, this can be a major windfall for American business and a creator of jobs and taxes.
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ONLY IN THE ABSURD WORLD OF CASTROFACISM WILL THIS HAPPEN! The foreigners can own/lease land and can build all they want, BUT the CUBAN PEOPLE CANNOT? As that famous Cuban Philosopher Ricky Ricard said! CAN YOU SPLAIN THAT TO ME?
My advice is to see it before it gets too commercialized. It is fascinating and the people are VERY nice. If they incorporate a free market system to fund their socialistic policies, such as health care, education, housing, feeding poor people, etc., they will do very well in the future.
They will find that it is not in their best interest to continue the hard line policies of the past. They could also pay for reparations to those who lost out when their businesses and property were seized after their civil war, which would be a very important thing to do.
Ahh, poor writer. He doesn't know anything about Cuba and the Cuban government. I know, because I lived there until last week. I believe that the Cuban government might lease the lands, but it will do so only to foreigners of NO Cuban origin. And for the rest, the business that these gentlemen set in Cuba will employ Cubans using a government "Employer Office", so that employees will get their usual wage of 15 USD/MONTH and the rest will cleanly go to the murky hands of the state... Generations will have to pass before the economic disaster created by the current Cuban miss-government can be cleaned.
the Cubans don't want to work. All they want to do is "take" the tourist for all the money they can. They love the tourist's money, but don't like the tourist. The Cuban men hate the tourist men because they come in and "date" the Cuban women. The Cuban women don't like the Cuban men because the men are lazy, drink a lot, and are adulterers. Castro has ruined the country with his economic policies. The adult population age 16-50 are a sorry bunch. All they want to do is party, have sex, drink, dance. That is why there is no revolution. Castro was smart in two ways. He confiscated all the guns and he doesn't interfere with the partying of the people. He almost had a revolution when he raised the price of the local beer from .65 cents to 1.00 dollar. He learned a quick lesson on that one.
the Cubans don't want to work. All they want to do is "take" the tourist for all the money they can. They love the tourist's money, but don't like the tourist. The Cuban men hate the tourist men because they come in and "date" the Cuban women. The Cuban women don't like the Cuban men because the men are lazy, drink a lot, and are adulterers. Castro has ruined the country with his economic policies. The adult population age 16-50 are a sorry bunch. All they want to do is party, have sex, drink, dance. That is why there is no revolution. Castro was smart in two ways. He confiscated all the guns and he doesn't interfere with the partying of the people. He almost had a revolution when he raised the price of the local beer from .65 cents to 1.00 dollar. He learned a quick lesson on that one.
This is, indeed, interesting and should inch the issue of the expropriated properties towards the spotlight. At the core of Cuba's dismal economy has been no property rights and protections. Expropriation of property from Americans, Cuban-Americans and Cubans in Cuba has created a situation where there is no clear title to property, which creates significant and often overwhelming risk for investment. It is the white elephant in the room and Cuba is doomed until it is addressed.
In response to several of you, let me say that:
a.) I was a part of the Cuban community in Miami for years, and b.) I have been to Cuba several times. To say that I don't know anything about Cuba is clearly wrong.
As to the comments that Cubans don't want to work and that all they want to do is party, have sex, drink and dance is also incorrect. I have met very few Cubans, either in the states or in Cuba, who were not willing to work. Having a party is a Cuban thing, as is Havana Club rum, just as much as a good Cuban cigar. People who like to party are not lazy by definition.
You are correct that there is some resentment that the women like to date the tourists, as well as wanting the tourist dollar. Who can blame them? That's true in any vacation paradise. That's why there are so many service businesses and businesses that cater to tourists in Florida. Ever hear of Disney World?
One of the three principle accomplishments of the Castro regime was land reform (universal health care and universal education being the other two). Now, rather than peasants being squatters and subject to being run out of their homes by the big land owner, they own their own land sufficient for growing crops and having a dwelling. It may not be the BEST land reform, but it is better than what existed before. Cuba may eventually be able and choose to pay for expropriated property of foreign land owners, but it is unlikely and impractical to consider reimbursing those members of the exile community for the lands they lost when they fled the country.
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