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Posted October 13, 2005 by mattlawrence in Business In Cuba

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A survey shows many executives plan to do business in a post-Castro Cuba. Media consultant Jose Cancela wants to buy into Cuban media.

INVESTING

BY DOUGLAS HANKS III | Miami Herald

Jose Cancela wants to turn Cuba’s state-run media into a profit-making enterprise.

The Miami-based Hispanic media consultant said he has lined up about $1 billion in pledges from potential investors to buy into Cuban television and radio markets once Fidel Castro leaves power and a democratic government takes over.

‘‘We believe it is an area that will develop very quickly,’’ Cancela, president of Hispanic USA, told an audience gathered in Coral Gables to hear the results on a new poll about South Florida investment in a post-Castro Cuba.

The survey, commissioned by South Florida CEO magazine, found most business executives in the area planned to invest in a democratic Cuba. Almost 65 percent of the 417 executives polled said they were likely to do business in a post-Castro Cuba, a consensus the poll’s architect said was particularly noteworthy since most of the respondents were non-Hispanic.

‘‘There has been a consensus over the last 25 years that only Cuban Americans care about Cuba. This may very well be one of these issues that unites this community,’’ said Sergio Bendixen, president of Bendixen & Associates, the Coral Gables pollster that conducted the survey.

The poll found some trepidation about the island of 11 million people just 87 miles from Key West coming into its own economically. Of those polled, 72 percent industry would be ‘‘negatively impacted’’ by a democratic Cuba, and 32 percent thought real estate would be hurt too, and 22 percent said local agriculture would suffer.

Still, 61 percent of those surveyed thought a democratic Cuba would impact their industry positively; only 11 percent thought it would hurt their own business.

BUILDER INTERESTED

Sergio Pino, a leading home builder in South Florida, said he was ready to expand his operations into Cuba once Castro was gone. He said his company, Century Homebuilders, and Lennar, a national builder based in Miami, are even helping draft building codes that could go into place once Cuba becomes an open market.

‘‘I dream about the moment when I can go back and help my Cuban family and help my Cuban brothers rebuild Cuba,’’ the Cuban-born Pino said.

But American investors, barred by U.S. law by doing business in Cuba, would face competition there from foreign companies already operating there, particularly those from Canada and Europe. Asked by an audience member what effect that competition would have on U.S. businesses, Pino said he hoped a post-Castro government would punish those doing business with the old regime.

‘‘Those Europeans and Canadians invested in a country that doesn’t care about their people,’’ he said.

Philip Peters, who studies Cuba for the Lexington Institute think tank, doubted current Cuban investors would lose their foothold once Castro departs.

‘‘I’ve spent a lot in time in Cuba, but I’ve never detected hostility toward foreign investors,’’ said Peters, noting that Cubans working in foreign-backed businesses generally earn more than other Cuban workers.

Jumping into the Cuban media business might let the Cuban-born Cancela avoid one of the thorniest issues likely to confront other American investors—property rights, said Florida International University economics professor Jorge Salazar-Carrillo.

While Cuban exiles expect a thicket of legal complications over claims of farmland and homes currently occupied by Cuban citizens, the government still owns the country’s television and radio stations. Salazar-Carrillo said a new government would probably auction off at least some of the stations to raise money.

‘‘I think it’s one of the easiest sectors to get into,’’ he said.

Cancela said he recently formed a company for the would-be media venture, Sunrise Communications, which would probably seek to purchase broadcast stations there or buy some other access to the airwaves.

INFRASTRUCTURE THERE

He said Castro controls an impressive broadcast empire: The country has four island-wide television networks, 16 regional television stations, and between 70 and 90 radio stations.

‘‘The infrastructure is in place,’’ said Cancela, a former Univision and Telemundo executive who was also president of Radio Unica when it went bankrupt in 2003. He predicted that within seven years, Cuban media could grow into a $900 million industry.

But Peters, the Lexington Institute analyst, said Cuban media holdings may not be the cash cow Cancela expects.

‘‘In that business, you’re blazing a trail because there’s no paid advertising in Cuba right now,’’ Peters said. ``Is there enough purchasing power in the market to support that?’‘

  1. Follow up post #1 added on October 13, 2005 by publisher with 3905 total posts

    “He said his company, Century Homebuilders, and Lennar, a national builder based in Miami, are even helping draft building codes that could go into place once Cuba becomes an open market.”

    I’m sure the new Cuban government will welcome all Cuban-Americans back with open arms and let them rebuild Cuba. NOT

    I’m always amazed how exiles, out of Cuba for decades expect to fly back the day after Fidel’ funeral and take over.

    Do you think the Canadians and Europeans are going to leave the island and their influence on Cuban government so you can step in and start rebuilding the country?

    Waterfront timeshares, Starbucks and Walmart…now that’ the REAL Cuba!

    Question to readers: Will the arrogance of Cuban exiles returning to Cuba lead to a civil war?



    Cuba consulting services

  2. Follow up post #2 added on October 13, 2005 by I-Harrlaw with 4 total posts

    The impression I was left with, after several trips to Cuba, is that Cubans of all walks of life are quite aware of the potential for economic development to be had if the island should suddenly be opened to free market forces.  While they seem to have no pronounced resentment toward current foreign operators, Canadian, French, German, etc. they bristle at the idea that Cuban-Americans will simply return and take over.  While that is a “family dispute” I do not want to get involved in, I am very interested to see how this will play out.  This antagonism seems to be come to a head when the issue of ownership of real estate in a possible post-socialist state is discussed.  The idea that someone who left the still beautiful homes in Miramar, or their heirs, will simply show up one day and say thanks, now get out, is not going to be welcomed there. 


  3. Follow up post #3 added on October 13, 2005 by abh with 244 total posts

    Interesting question about a civil war.  I think that while many of the Miami exhiles’ daydreams are way off and I don’t expect a “Democratic Transition” manipulated by the US to be anything like these guys are predicting, I can imagine that there will be some amount of violence if the old cubanos really try to take their old places.
    I just picture a much more gradual and less predictable change cuando cae el jefe.


  4. Follow up post #4 added on October 13, 2005 by jesusp with 246 total posts

    I believe there are enough bright minds in Cuba lined up to take over when Fidel passes and the changes will come gradually, the exile community will no doubt have some effect on the changes that take place, but its role will be limited to the economic field, socio-political decisions will remain with the leadership of the government. No civil war.


  5. Follow up post #5 added on October 13, 2005 by Dana Garrett with 252 total posts

    So the business execs are licking their chops at the prospect of vast investment in Cuba after Castroís demise.  It is absolutely incredible that so many people still believe that Cuba will fling open its borders to a USA economic invasion after Fidel is buried. 

    What are these people thinking?  That the presence of one 77(?)-year-old man is the only obstacle that keeps the USA at bay in Cuba?  These people are living in gaga land.

    But there is another factor that is driving these business execs fantasies: the prospect of employing a highly educated work force at subsistence wages.  Mucho profit there.  The only problem is that the people of Cuba would never stand for letting themselves be used and exploited by the USA again.


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