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Posted March 12, 2007 by publisher in Business In Cuba

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Blogspot entry with link to full text below.

By now the majority of Cubans have reversed the effects of starvation and other privations of the former government and are on the mend. With full stomachs it is easier to smile and dance in the streets and clock in at work in their new jobs. Havana is filled to capacity with venture capitalists and corporate CEOs scrambling to establish a toe-hold in Cuba for their operations. As Cuba reaches its 30th day of liberty, the transitional government is signing hundreds of contracts with private foreign corporations to mine, broadcast, provide fiber optics cable, satellite, provide power, occupy space in Havana and elsewhere and the list could go on and will when I can get around to it but you get the idea. Besides the fees generated for the Cuban government, those occupying Cuban locations will immediately have to begin paying their site-value tax unless they are under the Economic Victims Compensation Act which grants them a number of years of site-value tax relief.

Probably within one year every inch of business Real Estate in Havana will be GONE! For the most part the people have just stayed in their dilapidated housing but many places on the island are at least presentable now with paint, nails, wood and other supplies flooding into Cuba. Many Cubans begin renting rooms to tourists, offering taxi service, guided tours complete with English/Spanish interpretation and other services that cater to the burgeoning tourist and business demand. In addition, the construction industry is desperate for more man power and has taken to luring the workers from other construction sites with bribes like free worker housing, free meals and healthcare as well as the standard 401K/vacation benefits available at any decent company found in the west. Because Cubans are living on land location worth $0 they pay no tax and therefore begin to accumulate more and more wealth over and above that required to maintain themselves like food, drink, etc. Now corporations are looking for new places to operate since the traditional business district is occupied to capacity. The residential areas on the periphery will be the first Real Estate sold from a Cuban family to business investors. At this point a 1/8 acre plot could range from between � and 1 million dollars instantly making the family very wealthy. They will of course relocate to new development farther outlying that, though not as convenient as closer in, again puts their residence&#xu2;019s site-value tax at or near zero. But the business that just purchased the previous property obviously has a valuable site since they pay big so their site-value tax would be very high. Note that the new Cuban residence itself may be a grand hacienda but because the tax in based on the value of the location site and not the improvements the owners pay little tax. Likewise, the business is free to improve his new site to accommodate the most efficient use of the land but is not taxed for the building &#xu2;013 just the location. So that usually means building up and down if geologically possible to create as much business space as possible.

Read the rest of this realistic fiction at http://tomasestradapalma4today.blogspot.com/2007/03/month-one-cuba-libre.html written by Don Tomás Estrada-Palma, the great grandson of the first President of Cuba (1902-1906)

  1. Follow up post #1 added on March 12, 2007 by publisher with 3905 total posts

    I especially like this line:

    “Havana is filled to capacity with venture capitalists and corporate CEOs scrambling to establish a toe-hold in Cuba for their operations.”



    Cuba consulting services

  2. Follow up post #2 added on March 13, 2007 by J. Perez

    The most realistic word from this piece is “fiction”.

    The most un-realistic word is “starvation”.


  3. Follow up post #3 added on March 13, 2007 by John Saynor with 4 total posts

    It is completely ridiculous and not of word of it resembles 30 days after in post-communism Cuba anymore than it is true of many countries in the former Soviet Union.  Dream on!


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