By Anthony Boadle | Reuters
When ailing Fidel Castro resigned last month, stock prices of U.S. companies that stand to benefit from more business with Cuba rallied.
Six days later, those shares retreated as his brother Raul Castro, Cuba’s first new leader in 49 years, was installed and picked old-guard revolutionaries to help him govern.
That dashed forecasts of a rapid transition from communism to capitalism and the end to the embargo the United States has kept against Cuba since 1962, which bars American investment and travel to the island.
“Anyone who thinks there will a ‘for sale’ sign up by a bankrupt Cuban government is wrong,” said the manager of a Canadian company, who spoke on condition of anonymity because of the sensitivity of doing business in Cuba.
As Raul Castro moves to raise living standards, welcomes new foreign investment in mining, oil, tourism, possibly agriculture and even ethanol, opportunities will open up, said the executive, but only for non-U.S. companies.
European, Latin American, Israeli and Arab investors already have a foot in the door in Cuba in the cigar, rum, citrus and hotel industries. With no American competition to worry about, they are looking at a windfall when U.S. sanctions are eventually lifted.
That day is still far off, even if a Democrat wins the presidential elections in November, say Cuba watchers, who see no action by the U.S. Congress until Havana releases jailed dissidents and reforms its one-party state.
Raul Castro has vowed to maintain Cuba’s socialist system and there are no signs that he intends to follow the free-market path of China and Vietnam.
However, he has already taken some small steps. Within weeks of formally taking office, his government has moved to allow Cubans to buy consumer goods that were banned until now, such as computers and DVD players.
The increased consumption longed for by Cubans will benefit European companies already producing goods in Cuba, such as ice cream and soft drinks by Nestle, beer by the world’s second largest brewer InBev, soap and shampoo by Anglo-Dutch giant Unilever, and cigarettes by Brazil’s Souza Cruz, a subsidiary of the British American Tobacco group.
Allowing Cubans to buy mobile phones and have more access to Internet would boost sales for the state telecom company ETECSA, where Telecom Italia has a 27 percent stake.
Even Austria’s Red Bull GmbH has set up in Cuba, selling its energy drink to young Cubans who can afford the silver cans.