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HavanaJournal.com: Cuba Business

Prof says Cuba embargo bad for business

Posted May 27, 2003 by publisher in Cuba Business.
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By David Goll | East Bay Business Times

In Roy Allen’s opinion, business as usual between the United States and Cuba isn’t good business.

That view was strengthened by Allen’s participation in a trip to the Caribbean nation last month as part of a 33-member delegation of East Bay residents led by Rep. Barbara Lee, D-Oakland. During the week-long sojourn to the Western Hemisphere’s only remaining socialist nation, the dean of the School of Economics and Business Administration at Saint Mary’s College of California in Moraga met with 76-year-old President Fidel Castro.

      “California business is missing out,” Allen said. “And for Cuba, which is developing its tourism industry, the fact that American tourists can’t travel there makes a huge difference in its economy.”

Castro, who has led the country since 1959 and through 41 years of a U.S. economic embargo based on political differences between the two nations, met with members of the Lee contingent, as he does periodically with groups of Americans. U.S. citizens are only legally able to visit the nation as part of cultural or educational exchange programs.

      The East Bay group, which also delivered medical supplies for the needy, was an attractive one for Castro, Allen said, because of Lee’s highly visible progressive politics and membership on the House of Representatives’ Cuba Working Group.

      Allen, an international business authority who wrote the book “Financial Crises and Recession in Global Economy” in 1999, is one of a growing number of U.S. academicians and business people who view Cuba as a potentially profitable market for American companies - especially food, medical and technology companies. Because they have no curbs on trade with Cuba, businesses in Canada, Mexico, South America and Europe have stepped into the breach, to some extent. Cuba has diplomatic relations with 165 nations, although not the United States.

      While relations between the two nations have softened from time to time, the Bush administration has taken a hard line against the Communist nation, contending that increased trade and cultural exchanges give legitimacy to a dictatorship that has brutally suppressed dissent. Republicans also get a great deal of political and financial support from members of the large Cuban exile community in South Florida.

      However, one of Bush’s own party members, Rep. Denny Rehberg, R-Montana, plans to submit a bill in the House of Representatives to lift the embargo, arguing his state could greatly benefit by selling farm products to Cuba. Another Montana representative, Sen. Max Baucus, a Democrat, plans to sponsor a similar bill in the Senate.

      Some Bay Area businesses - especially the struggling tech sector - could get a boost if the embargo was lifted. According to Allen, Castro told the East Bay group he has a long-term goal of putting at least one computer, along with peripheral hardware such as printers, in every Cuban classroom.

      Allen said the American embargo unquestionably has stunted the Cuban economy, cutting off a nearby source of goods and services and restricting a potentially lucrative tourist trade. The embargo also denies Cuba access to a huge market for its main products, including sugar, tobacco and citrus. In 2000, Cubans had a per capita annual income of $1,700, according to the U.S. State Department. Housing and medical care is free, however, for Cuban citizens.

      During a brief one-on-one meeting at a government building, Allen says he and Castro discussed the role of the U.S. dollar in the Cuban economy. American currency is legal tender along with the Cuban peso on the island.

      “I asked him if he was confident the dollar base could be managed properly, given what happened to the economies of Argentina and Mexico when they circulated the U.S. dollar,” Allen said, adding that Castro, responding in his characteristically long-winded fashion, essentially said Cuba would learn from mistakes made by its Latin American neighbors and manage the situation more effectively. “I was impressed with his knowledge of business and economics.”

      Castro also queried Allen and other members of the delegation about the economy of California, the fifth largest in the world, and of the city of Oakland.

      “He was very interested in the size of the city budget and how much it spent on city services,” Allen said. “He wanted to compare the level of spending on social services between the Bay Area and Cuba.”

      Following the private conversations Castro had with members of the delegation, they joined him for a three-hour luncheon at which Allen said he sat directly across the table from Castro. The Cuban leader did most of the talking, Allen said.

      The delegation also met with other Cuban government officials, who engaged them in conversations on topics ranging from business to politics to comparisons between the two societies.

      “(Government officials) claim every child has access to day care and an education,” Allen said. “They appear to have a pretty good social safety net.

      “There are a lot of substandard buildings around the city and countryside, but we saw no evidence of abject poverty,” Allen said. He said he and other delegation members were free to roam about Havana and Playa Veradero, Cuba’s largest resort.

      If the embargo of Cuba was lifted, Allen envisions dramatic benefits in a short time. “Right now, there is a single chartered flight a day from Los Angeles to Havana, so if trade and tourism were allowed, there would be dozens of flights daily from all over California,” he said. “I think there would be strong interest (in Cuba) from our agricultural industry and from real estate development interests here in California. And, since Cuba is renowned as having the best medical practices in Latin America, I believe our local health care community could benefit tremendously from exchanges between the two countries.”

      Allen fears, however, that the situation is moving in exactly the opposite direction, with the Bush administration threatening to cut off all remaining cultural exchanges between the two nations.

      “We have a group of Saint Mary’s students scheduled to go there in January with one of our history professors, and that trip may now be threatened,” he said. “As an educator interested in international cooperation, I think these exchanges are so important. Our U.S. policy, which seems to be based on Cold War realities, is just a little out of date.”

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