THE PUERTO RICO CONNECTION: BEST BRIDGE TO CUBA?
The Magazine for Trade & Investment in Cuba
Cuba’s private high tech
sector begins to emerge
DEAL MAKING, HAVANA STYLE
An exclusive ex-pat interview
FUTURE CASH FLOWS
Will the remittance bubble burst?
CUBANS OPEN THEIR DOORS
The Private B-and-B Building Boom
PENNSYLVANIA’S RUM RUN
State officials challenge the embargo
Jono Matusky of the Innovadores Foundation in front of the
El Capitolio or National Capitol Building in Havana
Inside Cuba’s urban farms
Tampa to Havana!
We are proud to annouce new cruise itineraries including
April 30, 2017!
1101 Channelside drive, tampa, Florida 33602
www.porttb.C om | 800-741-2297
10 IDEAS + INNOVATION
For U.S. companies exploring opportunities
in Cuba, look to biotechnology
Rose Petroleum hopes for an exclusive
deal in Cuba to mine gypsum, an ‘essential
input’ for construction supplies.
WE GROW TRADE ®
Even in the new trade environment
being championed by President Donald
Trump, U.S. companies will need
Cuba has shown the international
community that it’s willing to repay
its foreign debt. Will its current recession
put that ability at risk?
How a California-Cuban couple
started a café in Havana
86 CUBAN ART
The latest exhibition of post-revolution
Cuban art on display at
Houston’s Museum of Fine Arts is a
testimony to time and displacement
CELEBRATING 10 YEARS OF TAKING THE BEST OF ARKANSAS TO THE WORLD
Pennsylvania legislators flew to Havana
with a simple idea for getting
around the 55-year-old embargo
against Cuba: Trade agricultural
products for rum
Deals, events and transactions of note
for trade and investment
22 WASHINGTON REPORT
Can ‘dealmaker’ Trump resolve the
decades-old Cuba claim problem?
An Interview with Argelia Balboa
Monzón from Cuba’s Ministry of
Energy and Mines
Cubans are embracing soccer, despite
the country’s fondness for baseball—
and its unusual political history with
the beautiful game
90 REPORTERS NOTEBOOK
A veteran Cuba watcher revisits the
city and province of Holguín after a
20-year absence to discover that much
94 BOOK REVIEW
Mark Kurlansky’s Havana:
A Subtropical Delirum offers an intimate
look into what makes Havana a
city like no other
American Airlines opens the first ticket
office in Havana for any regularly
scheduled U.S. airline
96 IN CLOSING
Want to make America first? Then lift
26 CUBA BRAND
Cuba’s iconic cigars see a rise in
worldwide sales as U.S. market grows
In suburban Havana, Cuba’s organic
farming sector thrives
6 CUBATRADE APRIL 2017
“WE GROW TRADE” is a registered trademark of the World Trade Centers Association.
48 RISE OF THE PROGRAMMERS
Cuba's skilled programmers have sought overseas
opportunities for decades. Now, some young entrepreneurs
are choosing to stay and develop onshore
56 CUBA OPENS ITS DOORS
Entrepreneurs are taking the reins on hospitality,
and it’s paying off.
64 BACK TO THE FUTURE
When it comes to servicing the cars of yesteryear, few
Cuban enterprises can beat Nostalgicar.
68 A NEW ERA FOR REMITTANCES?
Despite setting a new record in 2016, remittances to
Cuba may be slowing down in the wake of the U.S.
decision to end the wet-foot, dry-foot policy.
74 GETTING THE DEAL DONE
These are the insights of a veteran who has guided
multinationals through the maze of the island’s
intricate business culture for 25 years. His most
important advice: Don’t wait.
78 THE PUERTO RICO-CUBA CONNECTION
When it comes to doing business with Cuba, Puerto
Rico offers powerful advantages.
ON THE COVER
Jono Matusky of the
Innovadores Foundation in
front of El Capitolio
Your vision will serve you well
Our Cuba Task Force attorneys are uniquely
positioned to assist clients with the legal
and business opportunities following the
changes in U.S. public policy toward Cuba.
Established in 1910, Shutts & Bowen has witnessed
and participated in almost every major event in
Cuba’s history since the beginning of the 20th century.
No other law firm in South Florida has this experience.
Photo by Jon Braeley
as you continue to forge ahead
in this worthwhile endeavor.
“U.S. business owners need to understand
the process and meet the requirements of
U.S. and Cuban laws. We are happy to help
them navigate through these new waters.”
—Aliette DelPozo Rodz, Cuba Task Force Chair
Editor’s Note: In our Jan-Feb issue we ran a story by art critic Ariana H.
Requant entitled “Miami in Havana’s Rear View: Cubans take the stage
at Art Basel.” In that story, the editors inserted a paragraph on the fact that
the Cuban graffiti artist known as El Sexto was unable to attend Miami
Art Week due to his arrest in Cuba. It was not the intention of the author to
include this information, nor did she authorize it.
8 CUBATRADE APRIL 2017
Shutts & Bowen LLP
200 South Biscayne Boulevard | Suite 4100
Miami, Florida 33131
FORT LAUDERDALE | MIAMI | ORLANDO | SARASOTA | TALLAHASSEE | TAMPA | WEST PALM BEACH
from the Opening
Anyone who says that U.S. engagement
since 2014 has not benefitted the people of
Cuba need only take a trip to the island
One of our tasks at Cuba Trade is to track the daily media reports
from around the country about Cuba. By and large, they tend
to favor engagement; most are about the positive feedback from
educational, cultural or business missions to the island; many are
about the benefits of opening Cuban markets to U.S. products;
others describe the experiences of ordinary citizens visiting Cuba
from cities across the U.S.
There remains, however, a strident minority of publications
and journalists who believe that we should not engage with
Cuba. Among their assertions is that the opening, as such, has
only served to put more money into government coffers, and
that the average Cuban has not benefitted in any way from the
rapprochement with America.
The authors of these stories have clearly not traveled to
Cuba. If they had done so, they would have seen the phenomenon
of an emerging world of small, private businesses. These
include the half million licensed cuentapropistas who can create
their own businesses in everything from a barber shop to a bakery
to a computer repair outlet.
If you visit Havana and other cities in Cuba, you can witness
the emergence of this fledgling entrepreneurial class. Shopkeepers.
Tour guides. Software companies. Bed-and-breakfasts. And if
you inquire as to where these small businesses go for funding, you
will find that many are being financed by Cuban Americans who
can now send or bring cash to their friends and relatives, thanks
to the openings.
Many of the stories in this issue reflect this new reality. In a
story by economist Emilio Morales, you can see how President
Obama’s relaxation on limits for remittances of cash and goods
has resulted in record influxes, cash and goods being used to build
Also in our feature well, we take a look at several types of
emerging small businesses. The first is about how private programmers
are starting to blossom. Next, we have a feature about
how ordinary citizens are turning their homes into accommodations
for visitors, many of them Americans,
When I started to edit this publication, a veteran Cuba
watcher told me that the reason anti-engagement Congressmen
opposed regular flights to Cuba was because then people would
see what the reality was all about. At the time, I thought that was
absurd. Now I think differently. H
J.P. Faber. Editor-in-Chief
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Cuba Trade Magazine is published each month by Third Circle Publishing, LLC,
at 2 S. Biscayne Blvd., Suite 2450, Miami, FL USA 33131. Telephone: (786)
206.8254. Copyright 2016 by Third Circle Publishing LLC. All rights reserved.
Reproduction in whole or part of any text, photograph or illustration without prior
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10 CUBATRADE APRIL 2017
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IDEAS + INNOVATION
For U.S. companies exploring opportunities
in Cuba, look to biotechnology and energy
By Anya Landau French
Photo supplied by Akin Gump
How do we move food
from Hastings to Havana?
Break down barriers.
Recently, Akin Gump had the pleasure of
hosting Cuba’s Ambassador to the United
States, Dr. José Ramón Cabañas Rodríguez,
at our Washington offices to discuss
bilateral trade and investment opportunities
in Cuba with our clients and partners.
I asked Ambassador Cabañas: Are there a
couple of high-potential sectors in Cuba
that U.S. investors haven’t yet tapped into?
Yes, he said, energy and biotechnology.
His response was consistent with priorities
that Cuba has reiterated throughout
its increasing engagement with the United
States over several years now. Cuba’s
well-funded biopharmaceutical sector has
generated interest—and business—around
the globe, including in the United States,
for over two decades now. Cuban scientists
developed the world’s first meningitis B
vaccine, an important cattle tick vaccine,
a highly anticipated cancer vaccine, and
a promising therapy to treat and close
diabetic foot ulcers, to name a few.
Until just last year, U.S. regulatory
barriers deterred all but a handful of
intrepid Americans from pursuing such
unique opportunities in Cuba. While the
Cuban biotechnology industry long welcomed
U.S. scientists and companies, those
companies couldn’t move forward without
approval from U.S. regulators who, more
than once, approved the R&D without the
crucial approval for commercialization that
would make any such venture viable.
But in October 2016, the Treasury
Department issued a general license to
allow U.S. research and investment in
Cuba’s biopharmaceutical sector. And with
"With new rules facilitating professional research travel, it’s a now
easier for U.S. companies to travel to see the research ongoing in
Cuban biopharmaceutical centers"
new rules facilitating professional research
travel, it’s a now easier for U.S. companies
to travel to see the research ongoing in
Cuban biopharmaceutical centers, discuss
opportunities with dozens of companies
under the BioCubaFarma umbrella, and
proceed with negotiations to ink new
deals in this sector.
In the case of energy, a range of opportunities
are available. One hundred and
ten energy-related investment projects are
listed in the Cuban government’s foreign
investment portfolio for 2017. With a
population of 11 million and nearly 4 million
visitors in 2016, Cuba needs energy,
and lots of it. The outdated electrical grid
is still powered by heavy crude oil extracted
from onshore wells in a joint venture
with Canada’s Sherritt International. The
entire grid needs to be updated.
While Cuba’s own crude oil is used
for about half of Cuba’s electricity generation,
to meet the rest of its energy needs
Cuba had been importing up to 100,000
barrels of oil a day from Venezuela,
exchanged for Cuban doctors deployed to
underserved Venezuelan communities. As
the price of oil has fallen and Venezuela
has become less economically stable, Cuba
has begun to look elsewhere for its oil imports,
such as Angola or Algeria. Wherever
Cuba goes for oil, it won’t find as good a
deal as it had with Venezuela. Cuba might
find good prices much closer to home, but
with no U.S. license explicitly allowing oil
exports to Cuba, a U.S. oil company with
good prospects to make sales to Cuba will
need to blaze a trail and make the case to
U.S. regulators for how this business will
advance U.S. interests.
Other energy sector opportunities
to explore include renewables, such as
wind, hydro, biomass, and solar power. The
Cuban government plans to spend $3.5
billion over the next decade developing renewable
energy, with the hope of obtaining
nearly a quarter of Cuba’s energy from
renewable sources by 2030. Right now the
figure stands at less than 5 percent. To get
all the way there, Cuba is going to need
With no established path for U.S.
regulators to follow in licensing for U.S. participation
in such innovative projects, there
is a potential premium on the table for U.S.
companies that recognize business opportunities
in Cuba’s energy sector to get down to
Havana to start the conversation. H
Anya Landau French is a Senior Policy
Advisor with Akin Gump’s firmwide Cuba
When America farmers are able to freely
export their crops to other countries, it
nourishes the people who need them
most. Opening new markets for US
agriculture boosts food production, spurs
job creation and puts food on more tables
across the globe. That’s why we champion
open trade flows – to raise incomes for
all and build local economies that thrive.
Learn more at cargill.com/food-security.
12 CUBATRADE APRIL 2017
Cargill is committed to helping the world thrive.
© 2016 Cargill, Incorporated
Even in the new trade
environment being championed
by President Donald
Trump, U.S. companies will
need offshore capabilities
By Melvin Torres
Can Cuba become the new China if trade
is normalized with the U.S.?
With trade policy changes being
discussed by Congress and the President,
the sourcing of materials needed to manufacture
products in the U.S. has become a
topic of great interest.
U.S. companies, including those in
my home state of Arkansas, must import
essential components for manufacturing
that are nearly impossible to produce in
the U.S. without driving up the cost of the
final manufactured goods.
The challenge is that Congress is
proposing import duties to make up for
anticipated tax cuts to corporations that
could reduce their rates from 39 percent to
20 percent. The proposed Border Adjustment
Tax of 20 percent, for example,
would apply to imports from any country.
Another proposal the President is
contemplating is a Border Tax of 35 percent
on any imported products from companies
that move their factories outside
the United States. Finally, a 20 percent
“Wall Tax” on imports from Mexico is
being proposed to pay for the border wall.
Although it is unclear whether all
three taxes will be combined—or if any
14 CUBATRADE APRIL 2017
will be passed by Congress—the potential
increases range from 20 percent to 55 percent
on all imports. In the case of goods
imported from Mexico, the additional 20
percent Wall Tax would effectively push
the total tax to at least 40 percent and as
high as 75 percent.
Could this dramatic tax revamp
reposition Cuba as a new China? When
the embargo is finally lifted, Cuba may
very well become the preferred country
from which to import goods too costly to
produce in the United States.
With an average monthly wage of
$28 per month, depending on the industry,
Cuba has one of the lowest labor wage
rates in the world—the average monthly
salary in China, by comparison, is $327,
and in Mexico $322. Cuba’s monthly wages
meanwhile translate to $0.93 per day
or $0.11 per hour for an eight-hour work
day. Furthermore, Cuban labor is one of
the most efficient globally.
In addition to low cost, high-quality
labor, the shipping advantages of Cuba
are dramatic—sea shipping times of 11
hours or less compared to a few days by
land from Mexico and up to 28 days from
China. Located 93 miles from the United
States and 130 from Mexico, the island is
also strategically positioned to send and
receive shipments through its new deep
sea Port of Mariel to the rest of the world.
Once labor and production efficiencies,
proximity to the U.S, current infrastructure
improvements, and the special
economic development zone of Mariel are
all factored in, Cuba looks highly attractive
to U.S. companies that want to invest
there. In addition to the sourcing of manufacturing
components, the U.S. would
also benefit from off-season imports of
products such as tropical fruits and vegetables
that are all organically grown in Cuba
by necessity due to the lack of pesticides
and chemical fertilizers.
For companies looking to navigate
the newly proposed import taxes, Cuba
could be the answer to keeping U.S.
manufacturers competitive and their doors
open for business. H
Melvin Torres is the Director of Latin American
Trade for the World Trade Center Arkansas.
Angela Marshall Hofmann of World Strategies,
LLC and Sam Cushman of the WTC Arkansas
contributed to this article.
Annual supply of oil by Venezuela to
Cuba and the average price on the
international market 2014-2016
Cuba has shown the international community
that it’s willing to repay its foreign debt. Will its
current recession put that ability at risk?
By Emilio Morales
CUBA'S MAIN CREDITORS
Forgiven and pending debt
(billions of dollars)
For the past several years, Cuba has been
negotiating debt payment and forgiveness
deals with its global creditors. In December
2015, for example, Cuba signed an
agreement with 14 Paris Club member
countries to forgive $8.5 billion of its
$11.1 billion in outstanding debt. The remaining
$2.6 billion was structured to be
paid over 18 years, and the first payment
of about $40 million was made in October
2016. The deal also allowed Paris Club
members to establish bilateral restructuring
agreements with Cuba to set money
aside for development projects.
debt, the Cuba also spent four years successfully
restructuring its commercial debt
with creditors from Japan, Mexico, China,
and Uruguay. The result was forgiveness of
81.6 percent of the $42 billion face value
of that debt, leaving the country with outstanding
obligations of about $9.5 billion.
It is important to note that these
agreements didn’t include debt with
private creditors, which in 2010 was
estimated at $11.3 billion for Venezuela
and $350 million for Brazil. The Brazilian
debt also does not include nearly $700
million that Brazil lent for infrastructure
work in the Mariel Special Economic
The restructuring deals were intended
Source: The Havana Consulting Group
and Tech based on international press
reports and financial institutions.
Source: The Havana Consulting Group and Tech from
information from various sources
to send signals that Cuba is committed to
paying its debts, which could pave the way
for work with international financial institutions.
Now, Cuba faces the challenge of
fulfilling its payment commitments—an
uphill battle considering the country is
facing economic recession.
The Cuban GDP fell 0.9 percent in
2016 despite increases in tourism revenues
(12.3 percent) and remittances (2.7 percent).
Although some government officials
say upcoming economic reforms will boost
the country’s GDP, most experts agree the
economic situation will worsen in 2017.
The main factor triggering this recession
was a drop in Venezuela’s oil supply
and plummeting global oil prices. In
2013, the price of crude oil on the world
market averaged $108.60 per barrel. By
2016 it fell to $42.62 per barrel—causing
Cuba an income loss of about $4.18 billion
that year. Decreased nickel and sugar
exports also worsened the economic situation,
as did a drop in the production of
domestic crude oil and gas––which forced
Cuba to buy from countries besides Venezuela,
and at world market prices without
Cuba’s deposits in international banks
(international reserves) have also fallen in
recent years. Since the Cuban government
does not issue official information on the
reserves held by the Central Bank, it is
difficult to know its true value. However,
information published by the Bank for
International Settlements in Basel makes
it possible to estimate the value of Cuba’s
The value of these reserves fell sharply
from about $4.1 billion in December
2011, to about $2.7 billion in December
2012, to about $2.2 billion in September
Oil refinery located near to Havana
2013—a nearly 48 percent drop over the
Cuba’s international reserves fell
partly because they were used to repay
debts with some of its most important
creditors. They were also used to purchase
food, which was necessary given a rise in
global food prices and the country’s failure
to boost domestic production.
The combination of these challenges
will make it difficult for Cuba to fulfill
its debt commitments. The most practical
strategy for Cuba is to open its economy
to the free market, release its productive
forces, and deepen the opening with the
U.S. regardless of how the Trump administration
steers policy towards the island.H
Emilio Morales is the CEO of the Havana
16 CUBATRADE APRIL 2017 Source: The Havana Consulting Group and Tech based on international press reports and financial institutions.
APRIL 2017 CUBATRADE
Arkansas: Outfront on Cuba Trade
Arkansas is leading the U.S. in economic and agricultural collaboration with Cuba. And because
Arkansas is the nation’s number one producer of rice as well as a national leader in poultry, we’re
a natural for sprinting to the front of the pack when it comes to food-source trade with Cuba.
In Arkansas, we’re proud to help our neighbors to the south by sharing our resources and our
expertise — which in the end will help both economies to grow and prosper.
of note for trade
Cigar sales soar
Legendary cigar manufacturer Habanos
SA opened its annual festival by announcing
that Cuban cigar sales rose by
5 percent in 2016. Sales were worth $445
million last year, bucking sluggish luxury
goods sales in the global market. Habanos
makes cigars for iconic brands such as
Cohiba, Monte Cristo, Romeo y Julieta,
among others. While American travelers
are allowed to bring an unlimited supply
of cigars in-hand back home, U.S. sales
are still banned under embargo rules.
Keeping drugs in check
The U.S. State Department concluded in
its annual narcotics report that Cuba is
not a major consumer, producer, or transit
point for illegal narcotics, the Miami
Herald reported. The report also said that
drug consumption in Cuba is relatively
low. In recent years, Cuba and the U.S.
have deepened their cooperative efforts to
combat drug trafficking.
A push to end the embargo
Sen. Jerry Moran (R-Kansas) introduced
the Cuba Trade Act of 2017 to
the Senate in late February. The bill aims
to end the trade embargo on Cuba. The
bill is supported by several agriculture
groups hoping to sell products to Cuba.
“At a time when we need more markets
as badly as ever, lifting the embargo and
opening up Cuba for American agricultural
commodities would help increase
exports, create new jobs and boost the
U.S. economy,” Moran said in a press
Lettuce bikinis and vegan advocacy
Animal advocacy group PETA sent a
group of women dressed in lettuce-leaf bikinis
to Cuba to promote vegan diets. The
ladies spent several days delivering veterinary
supplies, handing out vegan food kits,
and feeding stray dogs. The trip drew some
criticism from those who pointed out that
fresh vegetables are generally scarce and
expensive in Cuba.
An exchange of ideas
A collection of Cuban tech entrepreneurs
visited accelerators in places such as Silicon
Valley and Boulder, Colo. thanks to a
competition they won that aims to showcase
Cuban startups to the world. The
10x10kCuba competition introduced the
entrepreneurs to experts who collaborated
with them to improve their businesses.
The Cuban entrepreneurs also shared their
expertise with their American peers on
how to be innovative in the face of limited
Bolivian leader goes to Cuba for treatment
Bolivian President Evo Morales traveled
to Cuba to treat a nodule on his vocal
cords. He was visited by President Raúl
Castro and Foreign Minister Bruno Rodriguez
during his stay in a Havana hospital.
Morales was set to return to Cuba in
early April for a small surgical operation.
Ballplayer smuggling trial ends with
Sports agent Bart Hernandez and trainer
Julio Estrada were found guilty by a
Miami jury of illegally smuggling Cuban
baseball players into the U.S. and helping
them sign giant contracts with MLB
teams. The jury found that the duo used
falsified documents to smuggle the players
to the U.S. One of the most striking
moments of the trial came when Chicago
White Sox player Jose Abreu testified to
eating a page of his own fake passport
during a flight to Haiti.
Castro disses slew of Trump policies
Cuban President Raúl Castro blasted U.S.
President Donald Trump’s immigration
and trade policies, among others, in front
of a summit of leftist leaders in Venezuela.
According to a Reuters report, he
called Trump’s trade policies “egotistical”
and his plan for a southern border wall
“irrational.” The Trump administration
did not respond to Castro’s comments,
but previously promised a full-review of
U.S. policy towards Cuba.
Cuban telecommunications monopoly
ETECSA has launched a promotion that
will slash telephone call prices. According
to 14yMedio, the Plan Amigos service will
lower the rate of phone calls from 0.35
CUC per minute to 0.20 CUC per minute
for up to three registered cellphones or
fixed lines. Those prices do not include
activation and monthly maintenance fees.
Crashing out at the World Baseball Classic
Cuba had a disappointing exit at the
2017 World Baseball Classic after going
winless in the second round. The team was
eliminated after they were defeated by the
Netherlands 14-1 in seven innings.
Poll: Cubans want better relations
A Cuban public opinion poll shows that
55 percent of Cubans support normalized
relations with the U.S., the Associated
Press reported. The poll also showed that a
large majority of Cubans support expanded
tourism and private sector business
ownership. The poll of 840 people was
conducted late last year by the independent
research group NORC at the
University of Chicago.
Frontier, Silver Airways suspend Cuba
Following cutbacks from other airlines,
Silver Airways and Frontier announced
they will cancel routes to Cuba. Fort
Lauderdale’s Silver Airways will drop its
service on April 22 because it says, “other
airlines continue to service this market
with too many flights and oversized
aircraft.” Denver-based Frontier will end
its Miami-Havana route on June 4. The
airline said the route was more expensive
than anticipated and that there is more
capacity than demand.
Five proposals approved for Mariel
Cuba said it approved five businesses to set
up shop in the Mariel Special Economic
Development Zone. According to Reuters,
the approved businesses include a Portuguese
firm that will offer engineering and
construction services, and a Cuban-Spanish
tourism services joint venture. Reuters
also reported in early March that Nestlé
was close to reaching a deal to build a $50
million to $60 million factory in Mariel.
Havana Club sees green
Havana Club, the iconic Cuban rum made
in a joint partnership between state-enterprise
Ron Cuba and France’s Pernod
Ricard, says it made more than $118 million
in profit in 2016. News service EFE
reported that Havana Club sold about
4.2 million boxes of rum, with about 28
percent of those boxes remaining in Cuba.
FedEx gets extension
The US Department of Transportation
granted FedEx a six-month extension to
start its Cuba services. It now has until Oct.
15 to kick off its five-times-a-week service
between Miami and Varadero. FedEx said
in its application that it needed more time
because it encountered several obstacles
including “Cuban regulatory complexities.”
Med school scholarships for a peace deal
Cuba offered the Colombian government
1,000 medical school scholarships in
exchange for its support for a peace accord
that hopes to end the decades-long conflict
with the Revolutionary Armed Forces of
Colombia (FARC). Colombia’s Cuban ambassador
says most of the scholarships will
go to FARC members and those who have
been affected by the conflict. Cuba hosted
the peace discussions between the Colombian
government and FARC members.
Home internet services kicks off
About 360 families have signed up for
home internet service that started on
March 1 in Old Havana, according to a
Fox News report. The signups follow a
two-month pilot program that installed
home internet service in up to 2,000
homes. High prices and slow connection
speeds have discouraged more Cubans
from signing up for the service. H
20 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
MIAMI: Trade and Logistics Hub
of the Americas
AMERICAS TRADE SHOWS:
The World Trade Center Miami manages two hemispheric trade shows which draw more
than 17,000 buyers to Miami. Upcoming shows include the 21st annual Americas Food
& Beverage Show and the 14th Biennial Air Cargo/Sea Cargo Americas Trade Show and
Conference. Reported sales at these shows exceed US$239 million.
The World Trade Center Miami assists other global trade shows and organizations to
access the Americas marketplace by providing sales assistance overseas and by
bringing foreign buyer missions to trade shows.
Trade Assistance Center Services
n Agent/ Distributor Services
n Red Carpet /VIP Meetings
n Trade Missions
n Trade Show Assistance
PRODUCT AND MARKET ASSESSMENTS:
n Product Competitiveness Assessments
n Market Research Reports
n Product Sourcing
n Customized Training Services
CHARLOTTE GALLOGLY, President
1007 North America Way, #500, Miami, FL 33132 n 305-871-7910 n firstname.lastname@example.org
22 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
Photo by xxxxxxxxxxxxx
That Thorny Issue
Can ‘dealmaker’ Trump resolve the decades-old Cuba claim problem?
Washington-based attorney Robert Muse: There are a variety
of solutions. Left: Office Max holds $267 million in claims.
By Ana Redelat
When it comes to rapprochement between
Washington and Havana, few issues are as
contentious as U.S. property claims against
Cuba. Starting in 1959, the Cuban government
nationalized virtually all property
owned by Americans on the island—from
hotels and sugar plantations to power
companies and factories. The resolution of
those claims remains a stumbling block to
fully normalized relations today.
The Obama administration held
several meetings with Havana on those
claims but made little or no progress.
Now, with a new president in the White
House, some hope a deal may be in the
offing. “This is a fresh slate and a new day,”
says Robert Muse, a Washington-based
attorney who specializes in international
law and claims issues.
Those claims now tally $8 billion, a
calculation based on applying 6 percent
simple interest to the original claims,
which were valued at $1.8 billion. In
total, the U.S. Foreign Claims Settlement
Commission (FCSC) has certified 5,913
claims. About 900 belong to U.S. corpo-
rations; the rest are claims by private U.S.
citizens and their descendants. The FCSC
recognizes no claims by individuals who
were Cuban citizens at the time.
Holders of the corporate chits include
Fortune 500 firms like Coca-Cola, Exxon,
Colgate Palmolive, General Electric, General
Motors, and Starwood Hotels. Many
of these giants acquired their claims from
other companies via mergers or acquisitions.
The Cuban Electric claim—at $267
million the largest claim of all—is now
owned by Office Max.
While no one is sure where the
Trump administration stands on these
settlements, Muse says the claims could be
settled “in a variety of methods.”
Many corporations, he said, would
“swap out” their claims for an opportunity
to invest on the island. Individual claims
could be settled by pro-rata distribution of
money the Cuban government could raise
by imposing new export duties. Another
method would be to give shares to claimants
for any investment projects that use
their property or land.
In the meantime, Cuba has muddied
the waters with a counter-claim against
the United States for more than $300
billion in economic damage from the
embargo. Muse said the U.S. should reject
Cuba’s insistence on tying embargo damages
to the expropriations, because those
alleged damages occurred separately. “It
is not helpful to conflate certified claims
with Cuban claims,” he said.
Former FCSC Chairman Mauricio
Tamargo and his law partner Jason Poblete
represent more than 20 individuals
with certified claims. Tamargo says he had
claimant clients before December 2014—
when President Obama announced he
would normalize relations with Cuba—
but “that interest accelerated after Obama
made his announcement.” Now, he says, a
similar sort of anticipation is in the air.
“President Trump has already indicated
that he’s a very good dealmaker, so my
clients are hoping he puts those skills into
settling their certified claims,” Tamargo
said. “We need to get the claims negotiated
and settled.” H
24 CUBATRADE APRIL 2017
Photo courtesy of American Airlines
growers stand ready
to meet demand
It’s time to end
AN OUTPOST IN HAVANA
American Airlines opens the first ticket office in
Havana for any regularly scheduled U.S. airline
The Ribbon Cutting (from left): Christine Valls, director
of Florida and Caribbean sales; Lorena Sandoval, regional
operations manager; and Galo Berltron, country manager
By Doreen Hemlock
In the United States, it’s common for
travelers to book their flights online and
pay by credit card. Not so in Cuba, where
internet access is limited and few people
have credit cards. That helps explain the
excitement over the debut of American
Airlines’ new ticket service center in Cuba,
the first opened by a scheduled U.S. airline
on the island in more than half a century.
Passengers can visit the office weekdays
and on Saturday mornings to get information
or buy tickets in cash.
Havana resident Onelio Ortueta
visited on a recent Saturday to pick up a
ticket to fly to Miami that same afternoon.
The price: about $224 round-trip, paid in
Cuban convertible pesos called CUCs.
“This is marvelous,” said the 58-yearold
who works in tourism and found
the Saturday hours convenient. “And the
ticket is so cheap. Three months ago, when
there were only charter flights to Miami, it
cost me nearly $600.”
American Airlines has three Cubans
working at the new ticket center in the
Miramar Business Center, where other
travel companies also have offices. The
workers are not direct American Airlines
employees. “As per Cuban law, all foreign
corporations licensed to do business in
the country are required to hire employees
through a government employment agency,”
said Lorena Sandoval, who heads up
American’s ticket service centers in Latin
America and the Caribbean from Miami.
The office accepts cash only, paid in
CUC. Unlike offices in the United States
or in other parts of Latin America, customers
can’t check-in or receive a boarding
pass; the self-service machine is not operational;
and frequent-flyer program reservations
and inquiries are limited—at least for
now, Sandoval said by email: “However, we
are working to resolve these issues.”
American opened the office Feb.
1, a bit later than anticipated. It waited
until December holidays finished before
providing four weeks of training to the
contract workers, Sandoval said.
It’s no surprise that American is the
first U.S. airline to open a free-standing
ticket office in Cuba. The Texas-based
carrier has flown charters to the island for
more than 25 years and now offers the
most scheduled service to Cuba of any
U.S. airline: 10 daily flights to six destinations.
Despite the recent announcement
that both Silver and Frontier airlines were
cancelling their scheduled flights to Cuba,
American remains committed. It started
scheduled service to five Cuban cities in
September and added Havana on Nov. 28.
To open the ticket office, American
first needed to obtain a business license
from the Cuba Chamber of Commerce.
That license lets it enter into commercial
arrangements with firms in Cuba—to
lease space, for example—as well as hire
Tourism worker Ortueta gushed over
the new convenience as he left American’s
office, ticket in hand. “Please tell your
President,” he told this Cuba Trade reporter,
“not to even think about taking away
these flights!” H
26 CUBATRADE APRIL 2017
THE CUBA BRAND
Collaborative Action for
Improved Trade Relations
Cuba’s iconic cigars see
rise in worldwide sales
as U.S. market grows
By Suzette Laboy
The U.S. market is the world’s biggest for hand-rolled cigars
For cigar aficionado Jonathan Barbeau,
Havana was the place to be in March.
“I knew it would be great, but it
turned out to be phenomenal,” Barbeau
said of the 19th Festival del Habano
(Habano Festival) that attracted some
2,000 cigar enthusiasts and distributors to
Cuba. “I found the festival to be the single
greatest cigar event that I’ve ever gone to.”
This was the first time Barbeau,
general manager of New Hampshire’s
Two Guys Smoke Shop and host of the
Cigar Authority Radio Show attended the
annual festival held by state-run manufacturer
Habanos SA. Each year, it attracts
cigar lovers to Havana from more than
50 countries for seminars, tastings and
tours of the Habanos tobacco plantation
in Pinar del Río province’s Vuelta Abajo
as well as the H. Upmann and La Corona
factories. The Habanos company markets
27 hand-rolled brands, including the
iconic Cohiba, Partagas, Montecristo and
Romeo y Julieta. Habanos cigars are sold
in over 150 countries.
“We are very satisfied with our
business evolution in 2016,” said Luis
Sanchez-Harguindey, co-president of
Habanos, during the festival. And for
good reason. Worldwide sales in 2016
came to $445 million, a 5 percent increase
from 2015, despite a “challenging marketing
environment” that included inclement
weather affecting Cuba’s tobacco crop for
the last few years. “We have a very solid
base to face 2017 with great optimism.”
Added festival attendee René Castaneda,
head of North American operations
for Swiss cigar manufacturer Villiger: “The
brand loyalty to Habanos is impressive.
In the U.S. market, loyalty to a brand is
limited, and the loyalty to a country of origin
is almost nonexistent. [But] smokers
of Cuban cigars are for the most part
convinced that Habanos are the best cigars
in the world.”
Although the U.S. market is the
world’s biggest for hand-rolled cigars, for
more than half a century the embargo
prevented Americans from purchasing
Cuban cigars. Even as of October 2016,
Americans who visited Cuba could only
bring back up to $100 in rum and cigars.
That changed under the Obama administration’s
last policy adjustment, which
allows U.S. travelers to return with as
many Cuban cigars as they want. Castaneda
and other industry leaders say that’s
already having an effect—even though
it’s still illegal to sell Cuban cigars in the
Barbeau said he hopes he’ll soon be
able to purchase Cuban cigars back in
New Hampshire, and that Cuban tobacco
will be taken to a new level. “You don’t
have the opportunity to be truly great if
you are just using one ingredient,” he explained.
“When and if the embargo lifts, I
would love to see Cuban tobacco blended
with other cigars, like Venezuelan and
The Habanos festival concluded
March 3 with an auction of seven cigar
humidors, raising $1.34 million for the
Cuban public health system. H
Developing and Managing Equity Projects in Cuba
We work closely with the business and political community to
improve the understanding between the U.S. and Cuba with
the aim of creating stable and synergistic consensus, trade,
and foreign direct investment partnerships.
28 CUBATRADE APRIL 2017
Getting Ready for the
Rose Petroleum hopes for an exclusive deal in Cuba
to mine gypsum, an ‘essential input’ for construction
supplies. Next: oil and gas licenses
STILL THE ONLY CUBE OF ITS KIND.
By Oscar Musibay
Long-Standing Brands that Set the Standard
With tourism-driven construction set to
boom in Cuba, British oil, gas, and mining
giant Rose Petroleum PLC is negotiating
to become Cuba’s exclusive producer of
gypsum. A soft mineral found in abundance
on the island, gypsum is used to
manufacture wallboard, cement, and
plaster of Paris.
Rose CEO Matt Idiens says his firm,
through its wholly owned subsidiary, Rose
Gypsum Ltd., won a competitive process
after the Cuban government issued its
requirements for a bid. Gypsum assembled
a technical presentation that involved
working with Italian and German
engineering companies, besting four other
applicants—though Rose still needs to
complete negotiations. Idiens told Cuba
Trade that it was in “an ongoing process”
with state entity Empressa Materiales de
Rose Gypsum was selected thanks
to its technical and professional expertise,
said Idiens, following talks with EMC
and the Cuban Ministry of Construction.
Rose Gypsum is negotiating to become
the project’s joint operator, distributor and
manufacturer. If the deal goes through,
Rose Gypsum would become the sole
manufacturer of gypsum-related products
in Cuba—in particular wallboard.
For Rose Petroleum, which also
mines for oil and gold in Mexico and
shale in the United States, the processing
of gypsum would be a shot in the arm; low
world prices for oil and gas have kept that
division of the company in the doldrums.
“It’s a huge opportunity in a very
strong, growing market,” Idiens told
Proactive Investors media last summer.
“I’m sure everyone is aware that Cuba is
one of the few places in the world where
growth is exponential at the moment and
will continue so, in my view. Tourism is
growing there. It’s just leaps and bounds
[and] the construction industry itself, if
they don’t fulfill the requirements, then
tourism is going to struggle because there
simply won’t be enough hotel rooms.”
(LON:ROSE) began bidding for the
mining concession in March 2016, characterizing
the multiple requirements as an
Rose Petroleum expects to mine gypsum
from Cuba quaries like the one above in
Chile; it will be used to create wallboard
for home and office construction
“extremely challenging process.” Although
Idiens declined to tell Cuba Trade the
cost of the plant, he confirmed that his
company would employ locals for mining
In a January press release, Rose also
fleshed out its on-island progress in oil
and gas, noting that “good relationships”
with Cuba were yielding ancillary opportunities;
Rose has been in early stage
discussions regarding licenses with Cuban
national oil company CUPET. Energy
experts believe Cuba has more than one
billion barrels of recoverable oil.
Meanwhile, the demand for wallboard
must be met. Idiens said once his
company signs a contract with the Cuban
government, it will take 12 months to
begin producing construction materials. H
30 CUBATRADE APRIL 2017
Having Trouble Finding
a Hotel In Havana?
By Doreen Hemlock
How a California-Cuban couple started a café in Havana
Shona Baum and Paver Core Broche, owners of the California Café in Havana
When American social worker Shona
Baum took a trip to Cuba seven years ago,
she never imagined she’d be running a
restaurant in Havana offering food from
her beloved California.
But Baum’s chance encounter on Havana’s
famous Malecon sea wall has taken
her on an unexpected journey. She fell in
love with a Cuban, Paver Core Broche.
They got married and lived for years in
Fate intervened again when the
Spanish-speaking couple was considering
opening a restaurant in Mexico—and
Cuba liberalized its rules for self-employed
ventures. So, she and Paver teamed
up with Paver’s brother Ibrahim, bought
a small locale near the landmark Hotel
Nacional in Havana’s Vedado district, and
opened their bohemian California Café in
Fusing California and Cuba has
not always been easy, but the couple has
pooled its respective native insights to
navigate the cultural differences that affect
their business. This includes training a
Cuban staff to understand American attitudes,
especially the American idea that
“time is money.”
In Cuba for example, said Baum,
employees folding napkins might notice
U.S. tourists by the door and figure, “I’m
working. They can wait.” Her five-page
training guide tells them to drop the napkins
and greet the guests. “If Americans
stand there 20 seconds without help, they
are going to leave,” Baum instructs the
crew, all self-taught in English and eager
to meet foreign visitors.
Finding supplies also can present
challenges. The restaurant offers California
specialties such as veggie burgers and fish
tacos (and its dishes contain less sugar
and more vegetables than typical Cuban
eateries do.) “Apart from chicken [which
is imported into Cuba from the U.S.],
we try to serve everything that is locally
sourced,” Baum said. But with no wholesale
stores and irregular supplies at many
Cuban markets, items such as spices are
sometimes hard to obtain.
Katie Smith, a 25-year-old living
in Brooklyn, N.Y, wasn’t thinking about
those concerns as she enjoyed lunch at
the cozy 24-seat café one recent weekday.
She’d heard about the restaurant from
friends and found the idea of California-Cuban
California’s zest to what she considers
usually blander Cuban fare. “This is very
flavorful,” she said, munching on a Cuban
sandwich offered with the café’s homemade
“The place reminds me of a little hut
restaurant you’d find in the Caribbean,
and it’s a connection to home, because I’m
from California,” Smith said. She and a
pal sat on a covered terrace near a painting
of a bear, California’s state animal, dressed
in a Cuban guayabera shirt and smoking a
The intimate café appeals both to visitors
looking for a real “people-to-people”
experience and to Cuba’s emerging middle
class—including many young people
working in tourism—who can afford what
by U.S. standards is modest pricing, said
husband Paver Core.
Next up for the enterprising couple:
An inn on Havana’s Guanabo beach. The
likely name: California Hotel. H
Photo by Mario Luis Reyes
Why Not See It Like a Native?
Our apartments are in the Old Plaza (La Plaza
Vieja) in the heart of Old Havana. Here, visitors can
discover and get to know Cuba by walking the
streets of its centuries-old capital—and feeling at
home being taken care of by a friendly Cuban host.
• Accommodations for two, four or six people.
• Reasonable rates. Breakfast included.
Contact Maylu Hernenandez at
email@example.com for availability and rates.
32 CUBATRADE APRIL 2017
Photo by Michael Newsome
Pennsylvania legislators flew to
Havana with a simple idea for
getting around the 55-year-old
embargo against Cuba: Trade
agricultural products for rum
By Brian O’Neill
The first idea Pennsylvania’s delegation
to Cuba had was a simple trade: food for
rum. Two days into their late February
trip to Havana, the plan got even simpler:
Just buy a boatload of rum for state liquor
stores and forget the embargo. Republican
state senate leaders say the 21st
Amendment—which ended Prohibition
30 years before the embargo began—gives
each state absolute control over alcoholic
“You can’t just suspend the federal
constitution,” said state Sen. Chuck McIlhinney,
a Bucks County Republican and
chair of the state Senate Law and Justice
A Pennsylvania play for Cuban rum
would be an extraordinary move at a time
when eased Cuban-American relations
under President Barack Obama have given
way mostly to guesses about President
Donald Trump’s stance. Toss in conservative
Keystone Republicans venturing into
one of the last outposts of socialism—
along with bureaucrats who have their
own spin on the art of the deal—and the
plot gets as thick as Cuban molasses.
If McIlhinney is right, Pennsylvania
may have a winning constitutional argument
to bypass the embargo. The Liquor
Control Board (LCB) is consulting its
lawyers and planning a strategy that could
end with Pennsylvania being the only
place to buy Cuban rums—though likely
not before a court battle.
Federal impoundment of cases of
Cuban rum at the Philadelphia docks
until the case is decided in court wouldn’t
be the worst publicity, either. That surely
would make national news and increase
U.S. appetite for the long-taboo spirits.
It seems more likely Pennsylvania
would seek a declaratory judgment. A
federal judge could issue a legally binding
decision before any rum leaves Cuba.
The irony of the state LCB being a
vehicle for reform is lost on no one in the
state house. Senate President Joe Scarnati
said, albeit with a smile on his face, that this
transaction would be “from one controlled
state to another.” Sen. McIlhinney said that
such a deal would do more to help capitalism
than the embargo ever did. And as
far as dealing with a socialist state, he said,
“The Russians are gone. I didn’t see any.”
If the deal does move forward, the
multi-day talks Pennsylvania state officials
34 CUBATRADE APRIL 2017
Photo by Michael Newsome
At the Table: State Rep. Paul Costa (left) meets with officials of the Food Industry Ministry.
had with a tag team of Cuban government
officials in and around Havana may
come to be seen as one uncommonly quiet
revolution. Three of the four minority
and majority chairs of the Pennsylvania
legislative committees overseeing liquor,
and two of the three LCB board members,
made the stops with other legislators, and
they ran into surprises from the get-go.
At their first meeting with Rafael
Suarez Rivacoba, director of international
relations for the government sugar group
Azcuba [rum is made from sugar], the
director asked through an interpreter why
all these visitors were even there. When
he heard “rum,” Suarez and his colleagues
“We think we have the rum that an
American citizen deserves to drink,” said
Rodrigo Diaz Sandoval, director of the
group’s division of logistics and exports.
In a joint venture with Pernod Ricard of
France, Cuba currently exports rum to
some 100 countries, but not to the U.S.
When LCB board member Mike
Negra said the Pennsylvanians were seeking
to buy, Suarez broke in with a question
36 CUBATRADE APRIL 2017
that might as well have been translated as,
“So what’s taking you?” He had a meeting
that afternoon with the state rum group,
and said it would be merely a technical
detail to create 750-milliliter bottles for
the U.S. market.
We want to end that
Orlando Hernandez Guillen
The Pennsylvanians later raised the
idea of bartering agricultural products in
exchange for rum. They were told that
in bygone days Cuba sent tons of sugar,
rum, and citrus fruit to socialist countries
in exchange for oil, equipment, and food.
But Cuba is past that now. They like to
be paid in cash. And they want to sell to
“We want to end that blockade,” said
Orlando Hernandez Guillen, president of
the Cuba Chamber of Commerce. Juan B.
Gonzalez Escalona, president of CubaRon,
told the Pennsylvanians that he’s sure
Americans sometimes smell Cuban rum
wafting across the Straits of Florida. He’d
like to end our frustration “for humanitarian
“We’ll all go home and be ambassadors
for Cuba and encourage our government
to end this unjust embargo,” said
Rep. Adam Harris, chair of the House
Ironically, neither the rum nor any
domestic monopoly on its sales would last
long if Pennsylvania gets Cuban rum first.
Seventeen states control wholesale spirits.
If Pennsylvania’s constitutional argument
prevails, McIlhinney expects the entire
embargo to be broken.
“I’m not trying actually to be bootlegger,”
he said. “I would like the question
raised and settled.’’
After the meetings, Mike Diven, a
former state legislator from Brookline who
organized the trip as a combined amateur
boxing exhibition/trade mission, betrayed
no discouragement. “I didn’t hear a solid
no,” Diven said. “I hear it’s complicated.”
In the boxing tournament he organized
for visiting American pugilists, however,
the Cubans took six of the nine bouts. H
As Cuba aggressively courts foreign
investment in its energy sector,
renewable energy is at the top
of the list. Cuba Trade recently sat
down in Havana with Argelia Balboa
Monzón, senior advisor for renewable
energies with Cuba’s Ministry
of Energy and Mines, to get her
take on where the sector is heading
An Interview with
Monzón from Cuba’s
Ministry of Energy
We do not refuse foreign
investment from any source
Argelia Balboa Monzón
Photo by Bahare Khodabande
By Michael Deibert
CT: How would you describe the changes
in energy policy in Cuba over the last
Since 2005 we have had something of a
revolution in seeking greater efficiency,
in trying to reduce our consumption of
fossil fuels, and in seeking to develop new
energy sources... We started to work by
changing thousands of refrigerators, thousands
of televisions, air conditioners and
so on [to allow] a considerable decrease
in fossil fuel consumption. At that time,
a multidisciplinary group was created for
the study of the development of wind
energy at the Universidad Tecnológica de
la Habana José Antonio Echeverría (CU-
JAE). They created a wind map of Cuba.
A factory had already been constructed
to produce photovoltaic solar
panels, but in very small quantities... That
factory nowadays produces 15 megawatt
photovoltaic panels and there has been
an investment to produce 65 megawatt
solar panels... So there has been a positive
shift since 2005, under the direction of
the country, to do this type of work. And
Cuba has also always been of the opinion
that the environment is very important.
In the 1980s, there was a large boom
in the construction of bio-plants, mostly
small producers. In terms of hydroenergy,
we do not have big rivers. We are a narrow,
long island that does not have large bodies
of water. But we have a policy to take advantage
of what we do have, especially in
mountain areas. We now have more than
132 small hydroelectric power stations
that generate electricity.
Where are we today? Today we have a
policy for the development of renewable energy
and increased efficiency, and the country
has several programs: A wind program, a
solar-photovoltaic program, a hydro-energy
program, a biomass program, etc.
CT: The government said it wants to
increase the share of energy produced by
renewable sources from 4 percent now to
24 percent in 2030. What is the mix you
are looking for within this 24 percent in
terms of biomass, solar, hydroelectric,
Biomass is going to be the most important...Today
we still have 57 plants [for
potential use in biomass energy]. Thus, 6
percent of this 24 percent should constitute
biomass... [Eventually] biomass must
contribute 14 percent [of all energy]. Then
there is wind energy and solar energy, as
CT: What are the financial approaches?
Which countries will be the best contributors?
The financing of our development of
renewable energy requires an adequate
combination of both state credits and
foreign investment. We have Law 118
(passed in 2014) which describes all the
FOR YOUR WORLD TRADE CENTER
WHERE: At a Venue in Your City
HOW: By Co-Venturing with World Trade Center Miami
By co-venturing with the World Trade Center Miami and Cuba
Trade Magazine, you can share unique market intelligence
with your membership. Working with economists and officials
from the U.S. Department of Commerce, the U.S. Chamber’s
Cuba Business Council, Engage Cuba and the U.S. Agricultural
Coalition for Cuba, the World Trade Center Miami and Cuba
Trade Magazine have developed half-day and day-long seminars
that will address the following:
• An Overview of the Cuban Economy
• Specific Sector Opportunities
• Cuban and U.S. Rules & Regulations
• The Politics of the Embargo
• Navigating Cuba’s Infrastructure
• Case Studies of U.S. Companies
Call a WTC Miami representative today to see how we can partner in order to bring
your membership a timely seminar on a topic that has attracted attention nationwide.
Charlotte Gallogly, President, World Trade Center Miami at 305.871.7910 or
Richard Roffman, Publisher, Cuba Trade Magazine at 786.206.8254 ext 403
Or send email to: firstname.lastname@example.org
38 CUBATRADE APRIL 2017
BEFORE THE EMBARGO,
Cuba was the top
destination for our rice.
Photo by Matias J. Ocner
Energizing Cuba: The country needs energy investments in order to power its cities
ways we can have foreign investment.
And our main socio-economic partner
is no secret: It is China, which also has
significant experience in the development
of renewable energy, with both solar and
wind technology. But we do not refuse
foreign investment from any source—that
is according to our foreign investment
law. We can talk. Other countries are also
negotiating. We have at this time plans to
build 14 wind parks. Of these 14, eleven
will be built with foreign investment, from
countries that include Spain and Holland,
as well as China.
CT: What measures are being adapted
to facilitate the process of approving and
financing foreign investments?
We have Law 118 regulating all of that—
and it is transparent. We are working in
that direction. We have a portfolio of
investment opportunities that was highlighted
at the Havana International Fair
[which took place in November of last
year]. We have been collecting proposals
for three years—that is, we offer and say
that we want to build such and such parks,
and in such and such provinces. And we
have the special zones of development like
Mariel [a 180-square-mile free trade and
development zone near Havana].
CT: Are there specific geographic areas
for energy investment in Cuba?
In terms of wind energy, for example,
although there is wind elsewhere the
highest velocity from what we have
studied so far is along the north-east
coast, in places like Gibara, Las Tunas,
Holguín, and Maisí, and there are four
park projects already in discussion with
a foreign company. There is very good
wind capacity that can reach factors of
very high indices [of energy production],
a capacity of 36-37 percent [for regional
power requirements], and in times of
winter it can reach up to 40 percent in
the area of Gibara. And in the Punta de
Maisí (in Cuba’s Guantánamo Province),
it is better still because there the
wind blows with great force. It is a zone
privileged by the wind in the country,
you might say.
As for the sun, it strikes Cuba
everywhere more or less with the same
intensity. We have some provinces that
are hit more intensely, however, and that
has been studied by the Instituto de
Meteorología de Cuba (Cuban Meteorology
Institute). There is more sun in
some areas of the provinces of Granma
and Cienfuegos where it is a bit more
intense. But definitely the zone where
we are located, near the equator, receives
something like, on average, 5 kilowatts
per square meter per hour of intensity.
We are going to take advantage of
everything and we intend to continue
studying some sources that can help us
do so. H
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40 CUBATRADE APRIL 2017
TAKE THE NEXT STEP TO DO BUSINESS IN CUBA
Rise in Cuba
Cubans are embracing the beautiful game, despite
the country’s fondness for baseball—and its unusual
political history with the sport
By Nick Swyter
Cuba’s preference for baseball over soccer
is so well known that it once nudged the
world closer to nuclear war.
More than a year after the botched
1961 Bay of Pigs invasion, a CIA analyst
told President John F. Kennedy that he
spotted soccer fields on the coast of Cuba,
which he interpreted as an indication of
a Soviet presence on the island. “Cubans
play baseball, Russians play soccer,” the
analyst reportedly told Kennedy.
That suspicion was one of several
factors that motivated Kennedy to approve
U-2 flights over Cuba to photograph Soviets
installing missiles on the island, setting
in motion the Cuban Missile Crisis.
“The presence of soccer fields was,
indeed, interpreted as an indicator that
a base was for Soviet rather than Cuban
troops, but obviously, it did not signify
missiles,” said William LeoGrande, an
American University professor and author
of Back Channel to Cuba: The Hidden
42 CUBATRADE APRIL 2017
Groups of young men play daily pick-up games on the sidelines of Havana landmarks
History of Negotiations Between Washington
U.S. intelligence once again treated
soccer fields as an indication of a Soviet
presence in 1970. Then-Secretary of State
Henry Kissinger urged the Soviets to halt
construction of a submarine base near
Cienfuegos after U.S. intelligence spotted
soccer fields, says LeoGrande.
Baseball is traditional, but
soccer is what’s happening
More than 25 years after the collapse
of the Soviet Union, soccer fields are still
largely absent in Cuba, and the existing
ones are not well maintained. What isn’t
missing, however, is the island’s growing
enthusiasm for the sport.
Groups of young men play daily
pick-up games on the sidelines of Havana
landmarks such as El Capitolio and the
U.S. Embassy. Younger boys can usually
be spotted practicing their footwork with
tattered balls at Parque de la Fraternidad
or Paseo del Prado. For those who prefer
to watch the game, countless bars and
cafés televise La Liga and Champions
League matches to fans wearing
counterfeit Real Madrid and Barcelona
While Cuba is still by no means a
soccer powerhouse, the game is picking
up popularity in a country that has historically
punched above its weight in sports
such as baseball, boxing and athletics.
“I’m tired of baseball,” said Rodolfo
Hernandez, a young Cuban who practices
with his friends at a crumbling sports
complex next to Havana’s Calixto Garcia
Monument. “Baseball is traditional, but
soccer is what’s happening now.”
Photo by Matias J. Ocner
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The football here is good,
what isn’t good is the
Departures from Miami, Tampa and Key West.
Photo by Matias J. Ocner
Making do: Young men play on a pitch that is more dirt than grass.
Hernandez and his friends play
a very informal style of soccer. No
11-a-side matches on a regulation size
pitch for these men. Instead, they play
seven-a-side matches on a smaller field,
with a tattered ball and sticks wedged
in the ground for goalposts. The result
is a fast-paced game where neither side
controls possession for long.
Part of the appeal of the game, says
Hernandez and his friends, is that the
game is relatively easy to pick up despite
the obstacles. “You just show up and start
playing,” said Fabian Falcon Dominguez,
another Cuban who plays with Hernandez
and his friends.
While Hernandez and Falcon
Dominguez look forward to the daily
pick-up games, they admitted that
arranging games comes with challenges.
The pitch they use is more dirt than grass.
They also tend to use tattered balls because
high-quality ones are hard to come
by. Like many products in Cuba, they say
the best balls come from the suitcases of
people who travel abroad.
“The football here is good, what isn’t
good is the conditions,” Hernandez said.
“Look here, I don’t have shoes.”
Cuba’s persistent enthusiasm for the
sport is also calling the attention of the
United States. Six months after the two
countries normalized relations, the New
York Cosmos of the North American
Soccer League (NASL) played a friendly
match against Cuba’s national team.
Legendary players Pelé and Raúl were
in Havana for the historic match that
ended with a 4-1 victory for the Cosmos.
More recently, the U.S. national team defeated
Cuba 2-0 last October in a friendly
game in Havana.
However, just like in baseball, U.S.
involvement in Cuban soccer is a double-edged
sword. Cuba’s national team has
the unfortunate reputation of losing players
each time it sends a team to the Gold
Cup, the biannual North American soccer
tournament usually hosted in the United
States. The Seattle Sounders’ Osvaldo
Alsonso, who is arguably the best Cuban
player, defected during the 2007 tournament.
Four players defected during the
2015 tournament, which overshadowed
the team’s accomplishment of reaching the
quarterfinals. Cuba did not qualify for the
2017 Gold Cup, which will also take place
at various U.S. venues.
It’s not yet clear to what extent Cuba
is willing to invest in its growing enthusiasm
for soccer. Still, there are some signs
that the Castro government is keeping an
eye on the rise of the sport.
According to a Reuters report, one
of Fidel’s final acts was to order a soccer
field for the kids of his neighborhood—a
decision he made after neighbors told
him there was nowhere for them to play
soccer other than the street. H
44 CUBATRADE APRIL 2017
Urban farming: The Alamar Organic Nursery, located in the Havana suburb of Alamar
In suburban Havana, Cuba’s organic
farming sector thrives
By Michael Deibert
Photos by Jon Braeley
Dotted with stark Soviet-style apartment
complexes built years ago to house workers
and advisers from Cuba’s Cold War
patrons, the Havana suburb of Alamar is
better known as the birthplace of Cuban
hip-hop than for any bucolic attributes.
It is nonetheless a hotbed of the urban
organic farming movement.
Alamar is home to the Organoponico
Vivero Alamar (The Alamar Organic
Nursery), organized as a Unidad Básica
de Producción Cooperativa (Basic Unit
of Cooperative Production), a type of
agricultural co-op in Cuba that has been
instrumental in instigating the organic
farming boom taking place on the island
over the last 25 years. Borne out of necessity
during the período especial (the “special
period” in the early 1990s when subsidies
from Cuba’s former patron the Soviet
Union evaporated), the practice has now
become a key component of the island’s
drive towards economic self-sufficiency.
“We have two goals with this enterprise,”
says Miguel Angel Salcines Lópe,
one of the farm’s founders, as he strolls
along neatly-tended rows of mushrooms,
brilliant green lettuce, and other vegetables.
“The first is to supply food, to provide
organic products at tolerable prices. The
second is to create employment. Here
there are 125 people working on 25 acres
We have a lot of women and elderly
people, who have a lot of knowledge and
The devastation caused by the loss
of Soviet support (the country’s Gross
Domestic Product dropped by 34 percent)
is what pushed Cuban agriculture
from one dependent on fertilizer and
diesel-powered machinery to one based on
sustainable organic practices. At the same
time, food rationing and a break down of
distribution systems led to an explosion
of urban agronomy. The result is that,
according to Cuban government estimates,
there are today some 10,000 organic urban
farms in cities across the country.
The Alamar Organic farm, founded
at the end of the “special period” in 1997,
started as a mere 8,000-square-foot plot.
It now harvests 300 tons of vegetables annually.
The farm also provides subsidized
meals to workers, who toil 7 hours a day
and are entitled to take 1.5 pounds of food
home with them at the end of each shift.
“I think what happened was there was
already a group of scientists and certainly
farmers who were seeing the negative impact
of the highly intensive, industrialized
agriculture system that Cuba had in the
1980s,” says Margarita Fernandez, the Executive
Director of the Burlington-based
Vermont Caribbean Institute. “They were
seeing a lot of negative impacts, and they
were looking at the more holistic approach
to grow food. The crisis allowed the political
space for their vision to spread.”
Organic farming—a type of farming
Don’t miss any issues...
Feeding Havana: The Alamar Organic Farm provides subsidized meals to workers
use that does not use antibiotics, fertilizers,
genetically modified organisms, growth
hormones, or pesticides—has become an
increasingly attractive option for consumers
in the United States and Europe. Cuba
already exports some organic produce to
Europe, but is banned from doing so to
Buoyed by the rapprochement
initiated by former U.S. President Barack
Obama, however, numerous U.S. agricultural
groups have sent fact-finding
missions to Cuba, and Cuba’s organic
farming sector has hosted visits from
both the U.S. Agriculture Coalition for
Cuba (USACC) and the Organic Trade
Association. “There could be a huge
market in the U.S. for organic produce
from Cuba,” says Paul Johnson, co-chair
of the USACC. “Unfortunately, this will
not happen until exceptions are made to
the U.S. embargo, or until the embargo is
One of the big hurdles that remains
There could be a huge
market in the U.S. for organic
produce from Cuba
Paul Johnson, co-chair of the USACC
is that Cuba’s land remains 80 percent
government-owned, and current U.S.
policy—even with exceptions—bans the
import of any good that is not produced
by a private enterprise.
Ironically, one byproduct of Cuba’s
recent tourist boom —2016 was a record
year for the island, hosting 4 million
visitors—is causing something of a new
food crunch, even as it brings much needed
cash to the island. Local markets for
Cuban citizens are being drained of the
best produce, which is being snatched up
by palaldares (private restaurants) to feed
hungry visitors in tourist-heavy neighborhoods
in Havana and other cities.
“Today you certainly have an opportunity
to grow the national production of
food to feed that new market [of tourists],”
says Margarita Fernandez. “But
there is a risk that organic food produced
on the island is going to be targeted to the
Even so, people like farmer Salcines
López argue that the phenomenon of organic
farming in Cuba has given it a sense
of self-sufficiency that has been absent
in a country which still imports 70 to 80
percent of its food needs.
“There are still mechanical problems
and bureaucratic problems, of course,” Salcines
López says, walking past a majestic
ceiba tree, its branches covering a broad
road near Alamar’s tower blocks, its roots
festooned with objects (candles, chicken
bones) indicating it as a place of veneration
for Cuba’s santería religion. “Here,
organic farming arises out of necessity
and, make no mistake, this farm has had a
profound social impact.” H
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RISE OF THE PROGRAMMERS
Since the 1980s, Cuba has been producing
skilled programmers who ultimately
seek opportunities with leading companies
overseas. Now, some of Cuba’s young entrepreneurs
are choosing to stay and develop
onshore startups. Will economic reforms
and a government-controlled internet keep
pace with the rising global demand for tech
By Victoria Mckenzie
It has been a mixed year for Cuba’s tech scene. “At this point,
it’s not something that is a boom,” says John Caulfield,
former Chief of Mission of the U.S. Interests Section in
Havana, and co-founder of the Innovadores Foundation, “but it is
something that’s happening.”
Thanks in part to the coordinated efforts of international
foundations and tech accelerators, a number of Cuban entrepreneurs
are getting their tech businesses off the ground, the
majority of them designed to serve the needs of Cuba’s emerging
private sector. Developers of apps for everything from restaurant
reviews to Cuba’s version of Craigslist have taken the lead, with
more heavy-duty programing for U.S. corporations in the wings.
But the substantial cost of a “cuentapropista” license, limited
internet connectivity, and a lack of banking services still makes
going into a private IT business a risky venture for Cubans.
The Innovadores Foundation (IF) began working in Cuba
two years ago with the goal of creating an incubator for young
entrepreneurs in the areas of programming and design. “Our
goal is to help create an ecosystem in Cuba where intelligent,
hardworking Cubans have a reason to stay, and don’t go to work
abroad, or make money for people abroad,” explained Jono Matusky,
who oversees the foundation’s operations in Havana.
“You know—actually work in Cuba and solve problems in
Jono Matusky of the Innovadores Foundation uses
the internet connection of the Habana Libre hotel
which is conveniently located near his home in
Photo by Jon Braeley
50 CUBATRADE APRIL 2017
Photo by David Ramos Casin
Photo by Thos Robinson
Working with less: Software programmers are the latest Cuban entrepreneur Connecting through the Catholic church: John McIntire, chairman of the Cuba Emprende Foundation
Cuba,” said Matusky. “That’s sort of our dream.”
Innovadores is now in the third year of its internship exchange
program, which brings Cuban high school and university
students to work with the NYC-based accelerator Grand Central
Tech. Down the road they hope to create a full incubator program
on the ground in Havana, which will provide interns with
access to resources like the internet, software, computers, mentorship,
and a co-working space.
Much like any foreign organization or business hoping to
establish a presence on the island, the Innovadores Foundation
has been in talks with government officials for years, and still
awaits approval from the Ministry of Culture. “We got in at a
nice time, and because we have a good partner down there, it
was going well,” said Matusky, referring to the Ludwig Foundation
of Cuba (LFC). But after an uncertain year, the government
has begun hitting the breaks on international projects.
“There was a Rolling Stones concert, Chanel show, all these
big international projects,” Matusky said. “I think the government
felt like they weren’t sure if everything that was happening was
what they wanted in terms of the cultural standpoint. So they
sort of froze a lot of approvals for international [projects] under
the Ministry of Culture.”
Then, of course, came Donald Trump’s election, and Fidel’s
death. “The government is not taking any big risks right now, so
we’re just being patient, and doing what we can in the meantime.”
While they wait for the green light to open their Havana incubator,
Innovadores is still able to provide mentorship and other
non-material support to local cuentapropistas—licensed workers
in the private sector—such as connecting one young designer to
New York fashion insiders, and helping an artist-programmer duo
run an Indiegogo campaign to raise money for their video game.
Matusky, himself an engineer and the co-founder of a gluten-free
microbrewery in Pittsburgh, refers to the young Cuban
entrepreneurs as “teams” even though legally, they work as individual
cuentapropistas under either a programmer’s or artist’s license.
Right now, there are two ways these innovators can work
together on projects. “There’s the one model where it’s a team
of equal developers,” said Matusky “and they’re sort of sharing
things, and doing it without a contract, based on trust.” The
other model is that of sole proprietorship, where one designer or
programmer owns a business, and hires other licensed entrepreneurs
who “are basically contractors, if you look at it from a U.S.
For the Innovadores incubator—and for the native tech
industry as a whole—internet access remains the sticking point.
“We could do almost everything we wanted to do right now
without approval from the government,” Matusky told Cuba
Trade. “We could rent a space. We could invite different people to
come and work there. But as soon as you want to provide internet
access, that’s where you really run into difficulty… You have to
have explicit approval from the government, and then they want
to know what you’re doing.”
The Talent Pool Awaits
Although the introduction of wifi hotspots and cuentapropista
licenses have made it possible for a small entrepreneurial tech
scene to exist in Cuba, the government’s cautious steps forward
have not been enough to counter the global demand for skilled
IT workers, which has lured talented computer scientists off the
island for decades.
In a conversation with Cuba Trade earlier this year, John
McIntire, chairman of the Cuba Emprende Foundation, said
that “a disproportionate number of people who have left in the
last few years are people in their 20s and 30s who are computer
programmers. They know their skills are employable, and they
can earn a lot more money outside of Cuba.”
McIntire’s Cuba Emprende Foundation has for years been
raising money to support the Catholic Church of Cuba’s Proyecto
Cuba Emprende, which trains potential entrepreneurs with
the skills they need to run private businesses. So far more than
2,000 students have gone through programs administered via
the church, including many in the high-tech sector, with an eye
toward remaining in Cuba.
One U.S. employer who runs a small development team
in Cuba describes a desperate “war for talented programmers”
among the most advanced technological companies around the
world. He believes Cuba’s pool of skilled techies is waiting to
be discovered. “If you have a place like Cuba where there are
talented people, the companies that could potentially hire them
are going to find them.”
The biggest concern, he says, is the lure of higher wages off
island. “It’s bad there right now,” he added. “There’s a big gulf
between the cost of living and wages. How much longer is it
sustainable to pay people a dollar a day?”
A History of High Tech
Cuba’s private tech sector may be nascent, but it’s state tech sector
is not. The government has a long history of training coders
that goes back to the 1970s, when developers were busy creating
programs for the sugar industry. At the time, Cuba hoped to improve
its centrally run economy through cybernetics—the science
of communications and automatic control systems—the same
degree that young Innovadores interns are graduating with today.
The severe economic collapse of the late 1980s left few
52 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
practical applications for software development on the island,
according to Merdardo Rodriguez, one of Cuba’s leading computer
scientists and co-founder of the first “official” video game
development group (Merchise). That’s when the IT sector became
concentrated on outsourcing, “which I think is very sad,” he
said, “because I consider these practices to be a form of modern
Things have improved significantly since the 1990s, when all
but a few Merchise members left the island to work for overseas
firms. Wilder Mendez, who was hired by an Ottawa game
developer, recalled that “back then, an investor had to import everything
into Cuba: computers, printers, keyboards, cameras, scanners,”
and they had to travel to Cuba with cash to pay workers.
“Now, a lot of investors can go to Cuba and find decent programmers
everywhere that already have their computers at home.”
But the limited connectivity is still a problem. Even as outsourced
labor, “a Cuban programmer still cannot compete with a
Vietnamese programmer, due to the simple fact that the Cuban
does not have internet in order to submit regular updates of his
or her work, to test the app, and get paid for it,” Mendez told
And if you don’t live near a public wifi spot,
then in terms of working with international
customers, you are kind of screwed.
Jono Matusky, Innovadores Foundation
Cuba’s internet provider, ETECSA, happens to be one of
the government’s highest earning companies. “It’s a monopoly,”
said Caulfield, “and it’s essentially funded by foreigners because
it’s really foreign customers who are able to afford the fees—not
necessarily directly, but through money they send to their relatives
Wifi hotspots cost $1.50 an hour, and though black market
resellers are offering cheaper connections using Connectify software
and NanoStations, the cost remains steep when compared
to the average monthly salary in Cuba which hovers around $28.
To rent a decent sized work space with internet access would
cost around $1,000 a month, “which is astronomical if you’re just
an independent freelance developer,” said Matusky. “You couldn’t
afford that, so you would rely on public wifi spots. And if you
don’t live near a public wifi spot, then in terms of working with
international customers, you are kind of screwed.”
Despite these significant obstacles, Bernardo Romero,
founder of the IT startup InGenius, says he prefers to develop
his business in Cuba rather than just being part of the workforce
in another country—even if he could earn a lot more money
elsewhere. Besides the obvious benefits of staying in one’s own
country, near family and friends, “I have potential here. These
days in Cuba there are a lot of opportunities, and there will be a
lot of opportunities opening up in the future.”
Since Ingenius was first profiled by the Washington Post two
A wifi hotspot in Old Havana attracts both locals
and tourists who are willing to pay the cost of
$1.50 an hour to go online
Photo by Jon Braeley
54 CUBATRADE APRIL 2017
I have potential here.
These days in Cuba
there are a lot of
Photos on both pages by David Ramos Casin
The New Wave: Bernardo Romero, founder of the IT startup InGenius
Startup: The InGenius workshop in Havana
years ago, Romero has added one more employee and expanded
his office. Thanks to a new wifi hotspot, he gets reception in his
office and no longer has to run to the park to communicate with
clients. Still, the majority of his customers are smaller companies
“because of the conditions we have [here]—the payment method
and slow internet,” said Romero. “Small businesses have more
flexibility to work within our limitations.”
Romero was also a winner of 10x10k, a competition by the
Cuba Emprende Foundation and #CubaNow that brought a
group of ten startups to the U.S. for a two-week accelerator program.
His new project, Cubazon, is an online marketplace that
allows people outside of Cuba to order items produced by the
Cuban entrepreneurs, for delivery anywhere on the island.
The Internet Throttle
Insiders are quick to point out that programmers and coders
don’t need the internet to do their jobs. But the lack of connection
limits entrepreneurs, who are the ones creating the need for
a local tech industry. When Cuba Emprende and #CubaNow
co-sponsored their 10x10k contest to support tech startups, they
were flooded with proposals for apps and websites geared toward
the service industry: advertising platforms, B&B finders, cultural
guides, platforms to connect freelancers with clients, “all kinds of
stuff that you’d see in a developing economy,” said McIntire.
But the developing economy can only grow as fast as it’s
communications system. “The poor people in the Airbnb,” Caulfield
told Cuba Trade. “It’s very frustrating [for] them because
they have to go out into the park every day to see who’s registered,
and they’re often running into problems where they get
double booked because they can’t be online all the time.”
If the government wanted to provide Cubans with internet
access, “they could do it tomorrow,” said Caulfield. “They could
certainly purchase the technology, and there’s plenty of people
offering it to them. It’s just that so far they are reluctant to go
The Cuban government understands the economic necessity
of improving communications, “but they’re very worried,” Caulfield
told Cuba Trade. Because internet access undermines the government’s
monopoly on information, “They’re constantly back and
forth between opening it up a little [and] kind of restricting it.”
As Cuba emerges from a completely state-controlled economy to
one with a stronger private sector, there will be inevitable growing
pains as the old methods give way to the new. It is a two-stepforward,
one-step-back process of evolving economic models. As
part of this process, one of the challenges faced by the high-tech
entrepreneurs of Cuba is just how public they can make themselves
as independent, private businesses.
“Unfortunately, as soon as something gets a lot of international
publicity, that the government is not running itself, it
causes problems,” Caulfield told Cuba Trade. “This is just part of
the reality of living in Cuba.”
If the government wanted to provide
Cubans with internet access, “they
could do it tomorrow
John Caulfield, co-founder, Innovadores Foundation
Last August, for example, a much-anticipated startup weekend
organized by the Merchise Startup Circle was shut down a
day before the event, all of the hotels suddenly claiming “technical
problems.” Earlier that spring Stripe Atlas, a U.S. firm that
helps internet businesses get started, announced it was partnering
with Merchise to help Cuban entrepreneurs gain access to bank
accounts and accept payments from all over the world.
The deal gained considerable international attention, and
President Obama even mentioned Merchise during a speech
in Havana. But following this burst of international attention,
Merchise was erased from Cuban media.
On the other hand, Cuba’s underground railroad of digital
entertainment—El Paquete (the packet), a collection of video and
music transferred by flash drives—has for years been distributed
across the island without government interference. At last year’s
eMerge technology conference in Miami, one of the Paquete’s
founders said this tolerance was based on the absence of anything
political in the content.
It’s not certain what this means for young entrepreneurs
who are learning how to brand themselves, or for the new waves
of students graduating from such academic powerhouses as the
Universidad Tecnológica de la Habana José Antonio Echeverría,
named after the famed student leader who died during the
“Most of the entrepreneurs that we work with are the ones
that are willing to be a little more public in what they’re doing,”
Matusky said of the Innovadores interns. “So a lot of them are
kind of developing apps, are developing websites, and are deliberately
generating press and generating a little bit of attention.”
It’s a “much riskier proposition,” said Matusky, as opposed
to working under the table in the grey market—but it is happening.
“I’m seeing guys that were doing just the independent
software development, and now they’re seeing that other people
are being successful trying to make apps, and they’re able to talk
about it, the government isn’t shutting them down. And so I
think that now people are starting to take a little bit more risk
and try new things.”
So far the mission of the Innovadores Foundation, which is
to foster onshore businesses and create a reason for talented graduates
to stay in Cuba, seems well aligned with the interests of the
government. “That’s why I think we’ve been allowed to operate
as we are,” said Matusky, “and why we’re still hopeful about our
program and our internship.” H
56 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
We rarely have days
where we aren’t booked
CUBA OPENS ITS DOORS
ENTREPRENEURS ARE TAKING THE REINS ON HOSPITALITY,
AND IT'S PAYING OFF
By Nick Swyter
Photos by Matias J. Ocner
58 CUBATRADE APRIL 2017
A Dubai theme: The Fombellida household has freshly painted white walls and shiny black-and-white tile floors
Left: Angel Pupo Rosa and his wife Maria Mercedes Oliveros at their home near Vedado. Right: An adjacent home under construction.
Three blocks from Havana’s iconic Hotel Nacional seems
like an unlikely place for a Cuban who emigrated to the
U.S. during the periodo especial to open a casa particular, or
private lodging. But that gamble appears to be paying off, because
Jesús Fombellida and his wife Yusimi say they’ve been welcoming
a steady stream of visitors since opening their doors in November
“It’s been so busy,” said Fombedilla said from the living room
of his recently renovated two-bedroom apartment. “We rarely
have days where we aren’t booked.”
The Fombellidas are among thousands of Cuban families
riding a recent wave of prosperity in Cuba’s casa particular industry.
While Cuban families have opened their homes to tourists
for decades, recent U.S.-Cuba policy changes have allowed
homeowners to welcome more American visitors by using San
Francisco-based hospitality giant Airbnb to take reservations.
Those changes, along with the Cuban government’s willingness
to allow entrepreneurs to play a larger role in the tourism
sector, mean that private homes now account for about 25 percent
of Cuba’s available accommodations, according to a recent
Brookings Institution report. Former President Barack Obama
acknowledged that achievement by inviting Airbnb CEO Brian
Chesky on his historic 2016 visit to Cuba. During that trip,
Obama applauded Chesky for making the island Airbnb’s fastest-growing
market. It was a promising message for a high-tech
company that’s been operating in a country with limited internet
access for only about two years.
While those numbers are encouraging for entrepreneurs, the
Fombellidas know from personal experience that starting and
maintaining a casa particular requires a lot of grunt work. Nearly
every task—from financing renovations, to booking guests, to
buying supplies—requires additional steps and workarounds to
“It’s not easy, but it’s possible,” he said.
GETTING IT OFF THE GROUND
Unlike many Havana tourist accommodations, nothing in
the Fombellida household looks like it was made in the ‘50s. The
home has freshly painted white walls, shiny black-and-white tile
floors, black faux-leather sofas, flat-screen TVs, and frilly silk
duvets covering each bed.
But perhaps the most unusual part of the apartment is its
offbeat theme: Dubai. Felt posters of the Middle Eastern city
adorn several walls, and nearly every table has glass models of the
iconic Burj Khalifa skyscraper.
Even a quick glance of the apartment should tell visitors that
close to nothing inside the apartment comes from Cuba.
“Nearly everything was purchased outside [of Cuba],” said
Fombellida, explaining that he bought nearly all his furniture
and appliances in Panama’s Colón Free Trade Zone and had it
all shipped to the island. As for the Dubai souvenirs, he says his
son brought them back from his frequent travels there. “I myself
have never been to Dubai,” he said with a chuckle, while wearing
a Dubai hat.
It’s difficult to find good quality materials
and products here. You need to find products
in Panama and Mexico
Angel Pupo Rosa
Buying and shipping products from Panama is prohibitively
expensive for most Cubans, but Fombellida is no ordinary Cuban.
He left the island on a balsa for the United States in 1994 to
escape the economic crash that followed the Soviet Union’s collapse.
He eventually made his way to New York, where he earned
a living as an apartment building manager. During his time in the
U.S., he kept in close contact with friends and family back home,
and made frequent visits to the island. Maintaining those ties
allowed Fombellida to fall in love with his wife Yusimi.
Several years ago, Fombellida permanently returned to the island,
begging the question of why somebody would leave the comforts
of the United States to go back there. “To be with his wife, of
course,” said Yusimi Fombellida, answering the question herself.
While the Fombellidas are fortunate enough to be able
to use American-earned dollars to spruce up a casa particular,
many Cubans look elsewhere to finance home construction and
Retired engineer Angel Pupo Rosa and his wife Maria
Mercedes Oliveros—friends of the Fombellidas—asked their
daughter in Italy to help pay for renovations to their casa particular.
A quick look at their five-room colonial-style home makes it
clear that it wasn’t cheap.
After learning that the second floor of the building where
they lived was crumbling, Rosa and Oliveros bought and renovated
the entire second floor. This involved doing some construction,
remodeling all the bathrooms, painting walls, modernizing amenities
and buying furnishings. Rosa says the entire project cost
about CUC 50,000—roughly US$58,000. A considerable portion
of that money came from his daughter through wire transfers or
“It’s difficult to find good quality materials and products here,”
said Rosa. “You need to find products in Panama and Mexico.”
The result of their investment is a casa particular that offers
guests a taste of what upper-class homes in Cuba were like before
the Revolution—an ambience found at historic hotels such as the
Saratoga and Nacional for a much steeper price.
“It has a balance of modern and classic,” Rosa said.
60 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
Licenses for renting houses and rooms for tourists (Casas Particulares), 2010-2015.
Provinces Licenses* % Percentage
Pinar del Río 1,374 5.11
Artemisa 792 2.95
La Habana 12,119 45.07
Mayabeque 417 1.55
Matanzas 2,506 9.32
Villa Clara 1,109 4.12
Cienfuegos 962 3.58
Sancti Spíritus 1,488 5.53
Ciego de Ávila 680 2.53
Camagüey 973 3.62
Las Tunas 547 2.03
Holguín 1,252 4.66
Granma 456 1.70
Santiago de Cuba 1,583 5.89
Guantánamo 545 2.03
Isla de la Juventud 85 0.32
Total 26,888 100.00%
The average room in Havana rents for about
$45 a night, compared to $25 for rooms in
other tourist destinations
Source: Havana Consulting Group based on data from Oficina Nacional de Administración Tributaria (ONAT).
* Licenses for renting houses and rooms (2015)
WIGGLING THROUGH LOGISTICS
Despite Airbnb’s meteoric rise in Cuba, its entry into the
market hasn’t been without challenges.
For one thing, Cuba’s sparse internet access creates real issues
for homeowners. Double bookings happen regularly because
reservations are hard to confirm. It’s also difficult for hosts to
showcase their listings and communicate with guests. However,
like most tasks in Cuba, there are workarounds.
Just like financing renovations, many homeowners call on
relatives living abroad for help with managing reservations.
Rosa and Oliveros say their daughter in Italy manages all their
Airbnb bookings. She alerts them of their guests’ arrival and
departure dates. Their system isn’t perfect, but it beats going to a
wifi hotspot and paying for a 30-minute session just to confirm a
booking request that may or may not exist.
“The most difficult thing is dealing with the internet,” said
Fombellida, who doesn’t rely on relatives to confirm bookings.
Instead, he goes to the nearby Hotel Capri each day to pay for
an hour-long wifi session. The drawback of this strategy is that
he loses contact with prospective customers during the gaps, and
sometimes has to deal with double-bookings.
While there is little he can do to stay in better contact with
customers, Fombellida handles double-bookings in a classically
Cuban way. He refers such customers to the home of his cousin
or upstairs neighbor—making sure the money reaches the pockets
of his loved ones.
That upstairs neighbor, Ana Betancourt Bulnes, told Cuba
Trade she’s happy to welcome those guests, since referrals mean
she rarely has to go online to manage reservations. To confirm all
other bookings, the retired economist depends on her son who
lives abroad. “My son in Spain helps me out,” she said. “I have
not had a negative experience.”
Simply put, there is no cookie-cutter way to make a casa particular
reservation. Guests have the ability to book on platforms
such as Airbnb, but they can also email hosts directly to ask them
to reserve dates. Other guests, particularly backpackers, sidestep
the internet completely by knocking on doors of homes that have
the omnipresent blue-and-white signs.
“I go from casa to casa and ask ‘can you take me?’” said
Estonian backpacker Kristina Rosenberg while strolling through
the beach resort town of Varadero—a sign that many visitors
would rather stay in a Cuban home than in one of the countless
all-inclusive resorts on the tourist strip.
THE MATTER OF MONEY
One of the biggest draws to opening a casa particular is that
homeowners make significantly more money than the average
Cuban salary of about 25 CUC (about $29) per month.
62 CUBATRADE APRIL 2017
A welcome sign for visitors who would rather stay in a Cuban home Casas particulares provide work for many skilled trades Guests can experience what upper-class homes in Cuba were like before the Revolution.
The average room in Havana rents for about $45 a night, compared
to the $25 a night that rooms in other tourist destinations
such as Viñales and Trinidad cost. Some fancier homes tend to be
more expensive, but most are still well below the prices of hotels.
Of course, like all private businesses on the island, the government
takes a share of the earnings. The Fombellidas say they
pay the state 10 percent of the money they make from each room
they rent to guests, a fee they do not consider exorbitant. “We can
get by with those taxes,” said Fombellida.
The impact of modest prices and taxes, coupled with high
demand for rooms, is that many luxuries such as eating at private
restaurants and going on vacation are now within reach for some
casa particular owners. A homeowner who asked to remain
anonymous told Cuba Trade that most of her income comes from
renting out rooms, even though she’s earned several prestigious
degrees. She now earns enough money to take modest vacations
in Varadero—a destination whose beaches are still mostly
off-limits to Cubans.
The rise of casas particulares is also bringing money to the
hands of entrepreneurs who work alongside homeowners. Many
homes, like those of Rosa and Betancourt Bulnes, offer guests
breakfast for a modest price. In many cases, homeowners also hire
additional workers to clean and prepare food for guests. Other
casas offer guests discounts at restaurants run by relatives.
Almost all my guests have been American.
They have been really friendly
Even though casa particular owners tend to earn more than
average Cubans, it can take weeks or months for money to actually
reach their hands. Travelers cannot use credit or debit cards
to pay homeowners directly since few U.S. financial institutions
work with Cuban entities. To get around this hurdle, many booking
organizations use money remitters to pay hosts. Airbnb, for
example, uses the Miami-based remitter VaCuba.
This form of paying hosts still comes with delays, despite innovations
such as mobile remittance transfers and in-person cash
deliveries on the island. Even though Rosa has opened his doors
to tourists through Airbnb since last December, two months later
he still hadn’t been paid for his services. He appeared to take a
laissez-faire attitude towards the delay, saying that complications
are inevitable when starting a new business in Cuba.
“It takes a while to get paid,” he said. “I’m not worried.”
Even though Cuba’s GDP is expected to drop once again in
2017, the future looks bright for Cuba’s burgeoning casa particular
In 2016, Cuba welcomed about four million tourists—a number
likely to jump this year thanks to loosened travel restrictions
and the arrival of U.S. commercial flights. An endemic shortage of
hotel rooms means the Cuban government sees casas particulares
as a way to accommodate excess demand from tourists.
The Havana Consulting Group estimates the cost of refurbishing
a casa particular in an existing home at $500 to $1,500
per room. For rooms built in newly constructed homes, the cost is
between $3,000 and $5,000.
On the other hand, says the company, building a new hotel
costs between $150,000 and $200,000 per room. The fact that
many casa particular refurbishments are financed by outside
resources and are finished more quickly make them an even more
attractive alternative for the government than new hotels.
The rise of casas particulares is also, for the most part, seen
positively by both opponents and supporters of U.S. re-engagement
with Cuba. The freedom to privately operate them is one
of the few Cuban government reforms that tend to satisfy the
agendas of both camps, since it encourages private sector growth.
Except for the monthly taxes and some additional fees, the
income goes directly into the hands of private entrepreneurs
rather than the government. Casas particulares also encourage
American travelers to have meaningful cultural exchanges with
Cubans, as opposed to visiting the island for pure tourism. Since
the industry also depends on the internet to survive, it encourages
development of that infrastructure. Those positive impressions
will be valuable to the casa particular industry as the Trump
administration reviews all Obama-era Cuba policies.
“Almost all my guests have been American,” said Fombellida.
“They have been really friendly. I’ve been having a good time
with them.” H
64 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
When it comes to
servicing the cars of
yesteryear, few Cuban
enterprises can beat
of choice for everyone
from local taxi drivers
to former First Lady
By Doreen Hemlock
Photos by Mario Luis Reyes
Julio Alvarez remembers the first time he went
to the United States to talk about his venture,
Nostalgicar, which restores classic cars and also
rents them out with drivers as taxis. He was wowed
by lengthy meetings with White House staff and
members of Congress, but disappointed to find
many friends in Miami too busy to meet with him
because of heavy workloads and expenses. He called
Three years later, he jokes to a crowd of
American tourists visiting his Havana garage, “I’m
capitalistic in Cuba. I hardly have time for friends
or family, and the money is not enough.” He’s now
looking to rent out a larger space to restore more
Back to the Future
In The Repair Shop: To be sure, not all the
parts in Nostalgicar’s American classics are
original, or even “Made in the USA.”
66 CUBATRADE APRIL 2017
A Labor of Love: Nostalgicar owner Julio Alvarez and his wife, Nidialys Acosta, beside their 1956 Chevy BelAir "Lola"
On The Job: The garage on Avenida Boyeros employs 14 people. Below, left: Alvarez welcomes curious visitors to his workshop.
cars and seeks a Cuban bank loan to help finance the expansion.
Alvarez hopes that when the U.S. embargo is lifted, his venture
can become a hub for restoring cars shipped to Cuba from
around the world. The expertise and inventiveness of Cubans in
restoration, plus labor costs below those of many other nations,
could make Cuba an ideal site for his specialty business. “What
we have to protect here is that the initiative comes from the
Cubans,” Alvarez told his visitors.
Dreams of developing a global hub are a long way from his
days working solo in his home garage, restoring a 1955 Chevrolet
BelAir that he inherited from an uncle. Alvarez started his
venture by transforming that car into a gleaming turquoise-andwhite
beauty dubbed Nadine and renting her out as a taxi. “I was
fishing for tourists outside the Hotel Nacional,” trying to recoup
the initial investment, he said.
Next, he sold an old Polish-made Fiat126p to buy another
Chevy BelAir, this time a beat-up 1956 model that he restored
into the pink-and-white “Lola.” His wife, Nidialys Acosta, drove
Lola as a taxi, too. The couple then teamed up with other owner-drivers
outside the Hotel Nacional, and the group soon had a
dozen vehicles to rent. Nidialys, who has a degree in chemistry
and ably handles numbers, agreed to coordinate all the rentals.
What we have to protect here is that the
initiative comes from the Cubans
Julio Alvarez, owner Nostalgicar
Today, Alvarez works with 14 people at his Havana garage
on Avenida Boyeros. His wife handles bookings for 22 cars, each
individually owned. The fleet features at least one Chevy for
every year from 1950 through 1960, none of them convertibles.
Nostalgicar rents direct to customers and also through government-owned
tour operators such as Havanatur and Gaviota.
Two-hour trips for tourists are the most popular bookings, but
Cubans rent their cars as well for special occasions such as weddings
or 15th birthday parties (“quinces”).
Still, keeping Nostalgicar humming is a challenge. Alvarez
said he works with a “friend” in Miami, who buys him specialty
parts from U.S. sellers. The friend uses a credit card to make the
purchases and then charges Alvarez a 20 percent markup. “With
those kind of friends, I don’t need enemies,” joked Alvarez.
Friends visiting Cuba sometimes bring the parts to Alvarez,
or else he arranges for shipments to Cuba, often paying $8 to $10
per pound for ocean cargo that can take three months to arrive.
That’s on top of whatever customs duties may be required in
Cuba, he said. The upshot: parts sometimes cost 50 percent more
than the initial purchase price in the United States.
So far, Alvarez said he’s financed the venture without loans,
relying largely on cash flow from the rentals. By Cuban standards,
his outlays are big. Alvarez figures it cost some $24,000 to buy
and fix up a 1960 Chevrolet Impala recently. That vehicle might
sell in Cuba for $60,000 and would retail for a lot more overseas.
“I can’t export. It’s not allowed,” said Alvarez. Renting out the car
as a taxi in Cuba brings in anywhere from $25 to $50 per hour or
more, depending on whether the booking is retail or through tour
operators, length of rental, and other factors.
To be sure, not all the parts in Nostalgicar’s American
classics are original, or even “Made in the USA.” Alvarez said
that about six years ago the Cuban government brought in an
abundance of diesel engines from Europe, and many Cubans
installed them to boost mileage from roughly 4-6 kilometers per
liter (9-12 mpg) to 14-15 kilometers per liter (33-35 mpg). Some
cars also have engines from Toyotas or other Asian makes.
But those details don’t deter visitors from enjoying Nostalgicar’s
classics. Cars in the group have been rented by music and
film celebrities such as Bon Jovi, Madonna, and Susan Sarandon,
by U.S. governors Andrew Cuomo of New York and Terry
McAuliffe of Virginia, and even by such U.S. leaders as then-Secretary
of State John Kerry and then-President Barack Obama
with his family.
The wall of Nostalgicar’s office proudly features a framed
“thank you” note from then-First Lady Michelle Obama, written
on White House stationery. Mrs. Obama thanks Niadlys for
her “warm welcome” to the family, says her efforts “did not go
unnoticed” and calls it “truly an honor to have the opportunity
to experience the culture and traditions of the Cuban people
Alvarez appreciates the growing people-to-people contact
with Americans in Cuba––and during his visits to 10 U.S. states
so far. But his love for American cars goes further back. Before
Cuba’s 1959 revolution, Alvarez’s father worked with the American
auto maker General Motors on the island. “Since I was
eight, I’d help my dad restore these cars,” said the 48-year-old
Alvarez with nostalgia. “I wish my Dad were still around to see
everything we’re doing now.” H
68 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
and the Shifting Pattern of Cuban Emmigration
Despite setting a new record
in 2016, remittances
to Cuba may be slowing
down in the wake of the
U.S. decision to end the
wet-foot, dry-foot policy
By Emilio Morales
President Obama’s Jan. 12, 2017, announcement abolishing
the “wet foot, dry foot” policy that had long granted residency
to any Cuban who set foot on American soil, ended
the hopes of thousands of Cubans already planning emigrate to
the United States. Many thousands more will now never make
The repeal of this policy marks the end of an era of unrestricted
Cuban immigration to the U.S. and begins of an era with
substantially reduced numbers of Cubans arriving on U.S. shores.
This new scenario starts just as cash remittances to Cuba
reached a record $3.4 billion last year, an increase of 2.7 percent
from 2015. Of this amount, 56 percent is estimated to have
arrived by formal means, 44 percent by informal means.
The rise in remittances was mainly due to the increase in
Cuban migration to the U.S., principally through informal routes
(of the approximately 80,000 Cubans who arrived last year,
50,000 came informally, i.e.under the wet-foot, dry-foot policy).
And new immigrants tend to send more money home to friends
and relatives than those who have been in the U.S. longer.
Another factor boosting remittances was a jump in air traffic
to Cuba from U.S. airports, especially after regular commercial
flights to the island began in late 2016. Cuban-American passenger
counts rose as the cost of round-trip tickets—which had
averaged about $450—tumbled by more than half.
The number of Cuban citizens traveling to the United
States also rose substantially. Many make several trips a year,
working informally for two or three months before
returning to the island with the money they’ve saved.
Studies conducted by THCG reveal that about 30,000
Cubans with Spanish citizenship travel to the U.S. more
than once a year. Most come to work in factories and
farms, and in healthcare. Between 20,000 and 40,000
Cubans, blessed with five-year U.S. visas, travel several times a
year to the United States.
During the eight years President Obama was in office
(2009-16), the State Department granted 188,115 tourist visas
70 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
Remittances to Cuba, 2011-2016 (in millions USD)
REMITTANCES TO CUBA. 2011-2016 (in millions USD)
Remittances to Cuba, 2011-2016 (in millions USD)
Source: The Havana Consulting Group and Tech
Source: Havana Consulting Group and Tech
Source: The Havana Consulting Group and Tech
Cuban emigration through legal (visa) and illegal routes, 2002-2016
CUBAN EMIGRATION THROUGH LEGAL (visa) and ILLEGAL ROUTES, 2002-2016
Cuban emigration through legal (visa) and illegal routes, 2002-2016
In the last 12 years, 644,047 Cubans
emigrated to the United States via
formal and informal means. These
new arrivals boosted remittance
growth in recent years
to Cuban citizens, in addition to more than 20,000 migrant visas
per year. Cuban authorities report that from January 2013 to
December 2016, some 671,000 Cubans traveled off the island,
making 1,745,000 trips.
The Remittances Impact
Foreign currency remittances sent by Cuban exiles was decriminalized
by the Cuban government in 1993, and have gradually
gained a preponderant place in the country’s economy. Remittances
are now the main support of the dollarized retail sector of
the island, and their value exceeds that of the six of most important
export commodities and services of the Cuban economy.
72 CUBATRADE APRIL 2017
In 2015 Cuba’s receipt of remittances in cash and merchandise
totaled $6.85 billion, while the combined value of exports of
nickel, sugar, drugs, tobacco, and fresh and frozen seafood, and of
tourism sales, amounted to about $5 billion.
Undoubtedly migration has greatly influenced these figures.
In the last 12 years, 644,047 Cubans emigrated to the United
States via formal and informal means. These new arrivals boosted
remittance growth in recent years; so did the Obama administration’s
lifting of all regulations that limited Cuban-American
travel and money transfers to the island. Large remittance companies
have taken advantage of that by initiating correspondence
procedures with Cuban authorities so they can operate in the
Photo by Jon Braeley
Source: The Havana Consulting Group and Tech
Comparison of remittances with main sectors of the Cuban economy (in millions of
COMPARISON OF REMITTANCES WITH MAIN dollars), SECTORS OF 2015 THE CUBAN ECONOMY (in millions USD), 2015
VARIABLES AND POSSIBLE ACTIONS THAT WOULD STIMULATE REMITTANCES TO THE ISLAND
Variables and possible actions that would stimulate remittances to the island.
Elimination of restrictions on the sale of
homes to foreigners by Cuban residents.
Elimination of the limit on the number
of houses that Cubans can own.
Change in price policy regarding the sale
of cars to the population, with a view to
stimulating sales of cars on the island
and improving the transportation
demand of the population.
Investments of Cubans
Allow Cubans living abroad to invest in
Approval of the new law for small and
medium-sized enterprises, increase
modalities for private employment,allow
self-employed persons to have legal
Source: Havana Consulting Group and Tech
Massive Internet engagement in Cuban
Source: The Havana Consulting Group and Tech.
Source: Havana Consulting Group and Tech from reports of the National Statistics and Information Office (ONEI) and own sources
Source. The Havana Consulting Group and Tech from reports of the National Statistics and Information Office
(ONEI) and own sources
MIGRATION FROM CUBA BEFORE AND AFTER THE REPEAL OF THE DRY FOOT, WET FOOT POLICY
Migration from Cuba before and after the repeal of the dry foot, wet foot policy
Source: Havana Consulting Group and Tech
Source: The Havana Consulting Group and Tech
The Wet-Foot, Dry-Foot Impact
Analysts now wonder if the repeal of the 1966 Cuban Adjustment
Act—informally known as the “wet-foot, dry-foot”policy—
will shrink remittances. The slowdown in migration will result
in 20,000 to 25,000 Cubans emigrating to the United States
annually, based on the minimum number of visas Washington is
committed to giving Cubans under a bilateral accord. This is signficantly
less than the 70,000 to 80,000 who were arriving annually
in recent years. In other words, 183,000 fewer Cubans will emigrate
to the U.S. in the next three years than in the previous three.
If we assume the same patterns of sending remittances observed
in the last years—$200 dollars average per month for each
Cuban that sends remittances to the island—plus the $3,500
each traveler carries on average on their annual trip to Cuba to
visit family and friends, the potential loss of income for Cuba
would more than $1 billion.
Another way to look at emigration projections is via accumulated
numbers of emigres for the period 2005 to 2020.
Assuming that President Trump will adopt a policy of zero
tolerance towards illegal emigration and will limit legal emigration
to the minimum level possible, the accumulated emigration
would be about 724,047 Cuban emigres in 2020. If the wet-foot,
dry-foot policy had not be rescinded, and if legal emigration were
expanded to the maximum level permitted, accumulated emigration
in 2020 would have reached about 964,047.
In this secnario, the potential loss of income for Cuba would
be about $ 1.4 billion. Even if we base the estimates on the po-
tential shares of the 240,00 people who would theoretically
have sent remittances to Cuba, using 40 percent as the lower end
of the range and 70 percent as the higher, the loss in 2020 would
range between $566 and $991 millions dollars.
What alternatives could counteract this potential
loss of remittances?
All indications suggest that the growth in remittances will
decline over the next few years. However, some variables could
offset the effect of repealing the wet-foot, dry-foot policy.
The Cuban government could counter the potential decline
of remittance growth by liberalizing or opening the economy.
Specifically, there are five variables that could stimulate a faster
growth of the flow of remittances to the island.
These five variables are: Opening the real estate market
to foreigners; reducing restrictions on private auto ownership;
allowing investments from Cubans living abroad; passing new
laws to permit more small and medium-sized enterprises; and
dramatically increasing internet access.
Currently, the areas associated with these five variables are all
restricted and their development limited. Liberalizing them would
immediately boost remittances and improve the economy. And
there would be a multiplier effect, generating hundreds of thousands
of new jobs, injecting investment capital into the economy,
improving living conditions for hundreds of thousands of Cubans,
stimulating foreign investment, and creating a more competitive
market—all contributing to a big leap in remittance flows. H
74 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
How do you conduct business in Cuba? With patience and an
understanding of the state-driven Cuban economy. These are the
insights of a veteran who has guided multinationals through the
maze of the island’s intricate business culture for 25 years. His
most important advice: Don’t wait.
Making The Deal...
By Doreen Hemlock
As the only Havana-based foreign lawyer representing an international law firm, Gregory
Biniowsky offers a unique perspective on doing business in Cuba. The 48-year-old from western
Canada began living in Havana in 1992, and has worked as a consultant on the island for a
variety of clients including the Canadian government, the United Nations, nonprofits, foreign
companies and now, law firm Gowling WLG.
Bioniowsky sees Cuba as a promising market, but warns foreign executives not to confuse
its moves toward a state-driven, mixed economy as a rush toward capitalism. He suggests that
entrepreneurs embed their projects within Cuba’s social and political priorities, while staying
polite and patient. The potential payoff: In Biniowosky’s view, “Within five years, I think
Cuba will be a booming place.”
Within five years, I
think Cuba will be
a booming place
CT: How did you get started with Gowling WLG, the merged
Canadian-British law and consulting firm?
Gowling is a very entrepreneurial firm. In fact, they opened up
an office in Moscow in 1988. They heard about me, reached out
and said they wanted to be the first international law firm with a
presence in Cuba. I’ve been with them exclusively for two years as
their representative on the island.
To be very clear, I’m not a Cuban lawyer, although I did a
year of law school at the University of Havana. And Gowling
WLG does not have a formal office in Cuba. What I offer is
strategic advice, on-the-ground problem-solving and accompaniment
to Gowling WLG clients who decide to explore or enter
the Cuban market.
CT: What kind of clients do you work with?
It’s very diverse, from clients who want to get involved in tourism,
hotel development, rum production, manufacturing, health
tourism, airlines, pharmaceuticals, biotech, airports, construction,
infrastructure, and selling Cuba food and beverages.
CT: Are your clients diverse in size, from multinationals to small
Unless small entrepreneurs have a really unique product or service
to offer, I’d say they’re going to have great difficulty entering
the Cuban market. The Cuban government is more interested in
medium and especially large companies. The business you’re doing
is invariably with the Cuban state. So if you do cut a deal, it’s
going to be a very large project or large purchase order, and often
small entrepreneurs can’t handle those volumes.
CT: What mistakes do foreign companies tend to make in
One is to think that Cuba is launching itself head over heels into
some sort of capitalism. It’s not. Is Cuba making economic reforms
that try to be more market-oriented, to give a greater level
of autonomy to state enterprises, to raise productivity and efficiency?
Yes. But this is still going to be, at least for the foreseeable
future, a state-driven economy. Related to that, clients may think
that with Cuba “opening up,” they have to go in quick, make
money quickly, and cut quick deals. There’s no such thing as a
quick deal in Cuba. The mistake is clients having high short-term
expectations. I try to lower my clients’ short-term expectations
and raise their medium- to long-term expectations.
Another mistake is to think that because Cuba might have
economic difficulties it will be easy to negotiate one-sided deals,
because the Cubans need the investor’s capital, know-how,
market or technology. The reality is it doesn’t matter how difficult
things are, Cubans are very nationalistic and proud. They don’t act
desperately. They’re willing to close the door on a lot of money if
it doesn’t fit with the state’s political and social priorities, or if the
investor has not earned their trust.
And that comes to another mistake: to think “business is
business,” and you don’t need to understand the Cuban government’s
priorities and the political context in which the economy
operates. I say to those people: “Maybe Cuba is not the right
market for you, because this is a country in which politics and
social priorities are inextricably linked with business.” Sometimes,
my challenge is assisting the client to embed their business
proposal within what I see as the Cuban government’s priorities.
If you’re sensitive to those priorities, you have a greater chance of
actually being successful.
CT: How do you align client projects with Cuban priorities?
It’s understanding that 1) the Cuban government needs hard
currency coming into the country; you have to show that. And
2) the Cuban government is very cautious about giving up control.
They feel threatened, I think, for justifiable reasons. So, for
most ventures, they want 51 percent control, so they can make
sure the business is managed in a way that meets whatever their
priorities are—whether it’s buying inputs for that business from
one country over another or when payments are made.
For instance, take hotels and where Cuba wants them. Right
now, they’re really saying to foreigners with equity, “No, it’s not
Havana. It’s not Varadero. We’re going to start building hotels
in Las Tunas or these outlying provinces that are not benefitting
as much from the influx of tourism.” So, their social priority is
to start spreading around the wealth, and where a hotel is being
built is more important than the size.
Where politics also trumps business is in decision-making.
Foreign executives sometimes expect that the government official
sitting across the table in Cuba is the actual person who makes
the decision, and they’re not. These big decisions are made higher
up, so it makes the negotiating process more complex. Why? Because
the Cuban government wants to vet, control, approve and
analyze all ventures signed.
CT: What time horizon do you tell clients to expect on Cuban
For a simple trade agreement, to sell the Cubans something, it’s
shorter—maybe several months, not days or weeks.
But if you’re looking at a project where there is an investment
or a long-term contract for some kind of service, you’re
looking at a year at least. It’s slow partly because the Cubans are
cautious, and partly because the bureaucracy is slow, a bit overwhelmed,
and doesn’t have a lot of the resources it would like.
My advice is, be patient and take the time to understand the
Cuban government’s priorities. Read some of the key documents
that encapsulate those priorities, like the Lineamientos and the
Portfolio of Opportunities for Foreign Investment, to get an idea
of where their heads are at.
CT: What other recommendations do you have for negotiating
business in Cuba?
I suggest five Ps. First, be polite. Don’t come in here with the arrogance
and hubris of a cowboy, saying “I know what the Cubans
need, and I’m going to tell them what they need.” I tell my clients,
“Your first meeting with the Cubans, shut up and listen. Don’t go
right into your sales pitch. Listen. Ask questions. Then, when you
finally make your pitch, you say something like, “On the basis of
what I understand to be Cuba’s priorities—social, political and
economic—I think this business idea might find alignment with
your government’s long-term development strategy.”
So, come in with humility. Understand that these guys have
stood up to the United States for 50 years, and they don’t take
76 CUBATRADE APRIL 2017
This page: Tourists on the beach at Guardalavaca
Opposite top-left: Locals gather at a Wifi hotspot in Holguin
Opposite bottom-left: Organic farming near Havana.
Opposite right: Building renovations in old Havana.
(Photos by Jon Braeley)
kindly to the arrogant businessman, who often is the American.
What makes U.S. business culture so successful in the world is
your aggressiveness and in-your-face self-confidence. That may
work in a lot of countries. But it doesn’t work in Cuba. So, be
polite. Be humble. Hire a Canadian with Cuba experience to do
your negotiating. [Laughs out loud.]
Second, be prudent. Understand this is not a Third World
country where you can go through backdoors, have “friends,”
slide envelopes across tables. That doesn’t happen in Cuba, and
if it does, it’s taken seriously and punished quite severely. This
is a rules-based country with a lot of surveillance. There are no
secrets on the island. This is a sophisticated country. They have
an intelligence service that has been protecting them from the
United States and can easily be applied to companies that think
they might pull the wool over the Cubans’ eyes.
Third, you have to be persistent. I’ve had clients who stuck
to a business idea, and when the Cubans didn’t respond, they
politely and tenaciously kept knocking on the Cubans’ door, until
finally the Cubans said, “Let’s talk about this.”
The next P is patience. You have to sometimes sit tight and wait.
And the fifth P? Patience, again.
CT: Where do you see Cuba going medium- and long-term?
Within five years, I think Cuba will be a booming place. Will it be
where the Cubans or foreign investors want it to be in five years?
No. But it will have an economy rising up from the ground floor.
Some cynical people say, “I’ve been waiting 25 years since the
Wall came down.” But there is a difference: The last 25 years for
business are not the next five years.
I believe two fundamental things are going to happen: The Cuban
government is going to accelerate and deepen its economic
reforms … so that it’s easier to invest and the economy becomes
more efficient. They’re reforming partly because they don’t have a
large benefactor outside and also because they’ve come to realize
it’s needed for the good of the country.
The second change is that the U.S. embargo is going to be
lifted. We don’t have to wait for a Democratic-controlled Congress
or administration. I’ve spoken to enough U.S. companies
and visitors who in increasing numbers say, “This embargo doesn’t
When you hear voices like that, and when you hear Cuban-American
voices like Carlos Gutiérrez and some Fanjuls
endorsing economic engagement with Cuba, you realize there’s a
growing political mass within Republican and conservative sectors
saying, “This is just stupid.” So, I can’t imagine the embargo
lasting more than five years.
CT: With openness growing, where do you see the biggest opportunities
for business in Cuba?
The lowest-hanging fruit is anything directly or indirectly related
to the expanding tourist sector. Cuba is maxed out now at four
million visitors per year, and projections are that once the travel
ban is lifted, visitor arrivals can easily double in a short period.
So, that means opportunity in hotel construction, infrastructure,
importing cars for rentals, selling food (Cuba imports 80 percent
of its food, so most food at hotels comes from abroad); investing
to produce food, because the Cuban policy is import substitution
to produce locally instead of importing; selling them pillows and
sheets for hotels; airport expansion; roadway improvement. The
list is long and attractive.
Next is anything based on Cuba’s greatest resource: its people.
This is arguably the best-educated country in Latin America,
with a huge number of university-trained professionals. I can see
Cuba becoming a center for hubs tied into pharmaceuticals and
biotech, health sciences, health tourism, information sciences,
engineering, agronomy—any sector where you would have high
value-added human resources involved.
CT: What about this notion that European, Canadian and
Chinese companies have an edge over U.S. companies because
they’re in Cuba first?
For sure, if you’re not an American company, you have an advantage,
because you don’t have an embargo on you. When the process
of normalization was initiated by President Obama, I had a huge
upswing in contacts by non-American companies saying, “I’ve got
to get in now. It’s the beginning of the end of the embargo. We
need to move.” I try to dampen people’s expectations in terms of
cutting the quick deal before the Americans come, because there’s
no quick deal with the Cubans. But yes, start now. I even had some
non-Americans tell me when Donald Trump got elected, “Great,
another four years of opportunity for us to cut deals before the
Americans really come on the scene as competitors.”
CT: Any other specific suggestions for U.S. business executives?
To do business in Cuba, you need face time. You need to meet the
Cubans. You don’t do business through emails and phone calls. It’s
relationship-building. So, Americans have to get down here.
I once had a U.S. executive tell me, “Gregory, I was here. I
was impressed. I had all these meetings on a political protocol
level, but I would have liked to sit down across the table from the
director of the state enterprise with which I would do business. I
would have liked to get a better sense of how they see things and
how a relationship would work. Could I have initiated a moot
negotiation without violating the embargo?”
So, I phoned up some lawyer friends in Miami who know
the embargo well, and the consensus was that as long as it’s
non-binding and there’s no transaction of services, an American
company can sit down across the table from any Cuban state
enterprise and talk as if the embargo didn’t exist. And that is an
important process, because both sides put down on the table their
conditions and their priorities, and they get to know and trust
But would the Cuban side entertain the idea? I initially
thought the Cubans would say, “Lift the embargo first.”
But when I went to a senior Cuban official, he said, “I
think we would be open to talking about a concrete project
in a hypothetical context,” which shows pragmatism on
So, after consulting your attorney, you have the opportunity
to talk with the Cubans without violating the embargo.
Start now, because it takes two years to negotiate a joint venture
anyway. So, when the embargo is lifted, you’re hitting
the ground running. Relationships in Cuba are not built over
six months. It takes longer. Trust-building is so important.
It’s not done over a couple of visits or couple of mojitos.
Start now. H
When it comes to doing business with Cuba,
Puerto Rico offers powerful advantages
By Alex Díaz
Sitting on the corner of Obrapía and Aguiar in Old Havana
since 1693, Oratorio San Felipe de Neri looks like any of
the hundreds of churches in colonial towns and capitals
across Latin America.
San Felipe, however, has a unique heritage. It was built as an
oratory church, so it wasn’t a typical place of worship. The founding
Oratory Congregation, while led by a bishop, featured secular
priests who used music prominently in Mass, much like gospel
services in American black churches.
When municipal authorities decided to turn San Felipe into
a concert hall as part of a 1990s renovation, most Cubans took it
in stride. It made historical sense. After all, the church still carries
the word Oratorio in its name.
At about that time César Cordero began a series of trips
to Cuba. The Puerto Rican engineer and entrepreneur—then a
professor at the University of Puerto Rico—was a member of
Andares Antillanos (roughly translated as Antillean Journeys), a
group of volunteers who promoted regional art and culture.
Cordero’s group discovered and began working on cultural
exchanges with San Felipe, culminating in the early 2000s with
Continued on page 80
80 CUBATRADE APRIL 2017
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the replacement of a large plain-glass window at the Oratory.
“We took a Puerto Rican artist by the name of Marcos
Alegría to replace a window at San Felipe with a stained-glass
work of art, to give the place a touch of its church origins,” he said.
Cordero continued traveling to Cuba, on cultural and
sports-related missions with Andares Antillanos. One of the
group’s most publicized events took place in 2012, when they invited
Cuban sculptor Yarovi López to tour Puerto Rico, putting
on an exhibit of his work hosted by Banco Popular.
The following year, however, Cordero changed gears. For his
latest trip, Cordero took a different turn, to business—another
passion he shares with his Cuban friends and colleagues.
“Business in Cuba had been on my mind from the very beginning,”
says Cordero, who was already managing director of the
San Juan-based Business Venture Group (BVG). “The challenge
has always been to figure out the niche that would work within
the legal limitations [of the embargo].”
Cordero joined a 2013 “trade” mission organized by the
Puerto Rico Manufacturers Association (PRMA)—“they were
more educational missions at this point,” explains PRMA President
Rodrigo Masses—and decided that Cuba offered opportunities
for BVG in the technology arena, in particular for a BVG
food innovation that extracts nutrients and other high-value
materials from plants. And for that project to move forward, his
cultural links with Cuba were an asset.
“I discovered early on that the cultural ties would be of great
benefit when the time was right to explore the business side,”
he said, “since it is something Cubans, including government
82 CUBATRADE APRIL 2017
Rodrigo Masses, President, Puerto Rico
authorities, value very highly, and more so when it comes to
doing business with someone from Puerto Rico, given the history
between our two countries.”
Cuba and Puerto Rico have long shared strong cultural and
historic ties. Both were still part of the Spanish empire when the
1895-98 War of Independence freed Cuba from Spain. During
the 30 years of rebellion that led to that final war (which also
made Puerto Rico an American protectorate) many high-profile
Puerto Rican cultural and political leaders joined the efforts of
Cuban revolutionaries, including those led by José Martí.
The decades of liberation wars where, in fact, intended to
free both countries—yielding, among other things, flags with
identical designs except for the inverted colors.
“Cuba and Puerto Rico remain de un pájaro las dos alas,”
Eusebio Leal Spengler said during the 2009 ceremony that
unveiled Alegría’s stained glass. Leal was the official historian of
the City of Havana, and the phrase, which translates as “the two
wings of a bird,” hails from a poem written in 1893 by Puerto
Rican author Lola Rodríguez de Tió. Rodríguez lived in Havana
for much of that rebellious 30-year period, and her name is
enshrined in roads, schools and other places in Cuba.
“The love runs deep,” agrees Richard Carrión Matienzo,
executive vice president in charge of business development and
international banking for Banco Popular, Puerto Rico’s largest
and oldest financial institution. As Washington and Havana have
come closer to lifting restraints on trade and investment, Carrión
has been a strong proponent of using Puerto Rico as a U.S.
bridge to Cuba.
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In a nod to the new U.S.-Cuba rapprochement that began in
December 2014, Carrión had the bank produce a music documentary
and CD, Cuba y Puerto Rico, in 2015. The bank releases
a special Christmas music CD every December, but that year’s
was a special gesture as the bank explored the Cuban market for a
financial product it could launch.
“The cultural affinity jumped out at us immediately, and we
decided to feature the historic musical relationship and special
bond of our two countries in the 2015 edition,” he told Cuba
Trade. “Today, as we look back, we can say without hesitation
that it was that cultural exchange that led directly to our card
business in Cuba.”
Carrión is referring to the MasterCard Popular launched
last year for use by tourists who visit Cuba. “It has been a great
success thus far, and we continue to explore other opportunities,”
including serving as a facilitator for U.S. companies establishing
a Puerto Rico presence to export to Cuba, as well as launching a
Popular branch network and lending operation in Havana.
“We realize some of this will take time, since the embargo
would have to be liberalized further,” he says. “But taking a long
view is in the nature of doing business with Cuba at this point,
and we’re okay with that.”
THE NATURE OF THE BUSINESS
Carrión’s conclusions on the nature of doing business with Cuba
include the historic and cultural ties with Puerto Rico, a bond
not shared with any other jurisdiction in the United States. But
beyond history and culture, Puerto Rico offers unique, competitive
advantages within the context of U.S. trade with Cuba.
Above all else, Puerto Rico has been a U.S. territory since that
1898 war with Spain.
“It is far more important than most people realize, and it can
help any American company in its efforts to penetrate the Cuban
market,” said Wilfred Labiosa, a principal at Cuban Strategic
Partnerships, a New York based firm that helps companies identify
and capitalize on opportunities created by the normalization of
Labiosa, a Puerto Rican with strong personal ties to Cuba,
plays the culture card in his own right, promoting artistic exchanges
between galleries in Havana and San Juan. “It is a big
door opener and relationship builder,” he says.
The PRMA’s Masses, keenly aware of the potential trade
advantages that cultural exchanges bring, was himself born in
Cuba and migrated to Puerto Rico with his parents at an early
age. Masses is easily Puerto Rico’s biggest Cuba booster, having
organized two trade missions and now planning a third, slated for
later this year to Havana and Santiago de Cuba.
“Puerto Rico has a number of big advantages to offer any
U.S. company looking to do business in Cuba,” he says. These include
a series of incentives that slash a company’s tax burden dramatically—federal
taxes doesn’t apply on the island, and Puerto
Rico’s Treasury Department taxes exports (including to the U.S.
mainland) at only 4 percent. Puerto Rico also has a high concentration
of coveted engineering and management talent, advanced
infrastructure, and a strategic location in the eastern Caribbean.
84 CUBATRADE APRIL 2017
“Instead of doing business with Cuba from a location in the
States, companies should find a local partner in Puerto Rico and
export from here,” said Masses, who owns one of Puerto Rico’s
leading office-furniture companies.
Masses’ missions were the island’s first salvos in the nascent
U.S.-Cuba opening. The Puerto Rico Chamber of Commerce is
following suit with a mission to Havana in May.
“Our goal, as is the case for every other organization
promoting trade and exports, is for Puerto Rican companies to
position themselves as the Cuban market continues to open and
opportunities emerge,” says Chamber President David Rodríguez.
The Puerto Rican government, for its part, has been aggressively
promoting the island’s uniqueness as a Cuban trade
platform within the U.S.—foreign for taxation, domestic for
everything else—in missions and road shows, as well as through
advertising and publicity.
Starting July 1, the administration of Gov. Ricardo Rosselló,
which took office in January, will transfer the island’s promotion
to the private sector in a recently enacted public-private partnership
called Enterprise Puerto Rico, modeled after the highly
successful Enterprise Florida.
“The policy of this government is to let the private sector
handle all promotion,” Economic Development & Commerce
Secretary Manuel Laboy told Cuba Trade. “Our role will be to
facilitate and provide the resources needed, as well as to reduce
the cost of doing business in Puerto Rico to make it more attractive
for companies to use the island as a bridge for their exports,
including exports to Cuba.”
For the latter, the government is focusing on Puerto Rico’s
strategic advantages in manufacturing, construction and services.
“Those are natural strengths of ours, and we see great potential in
working closely with the new Enterprise Puerto Rico to penetrate
the Cuban market.”
Given the complexities of the embargo and the uncertainties
surrounding the opening with Cuba, the first challenge facing
any company is figuring out what’s allowed. “Aside from the
industries open for trade, Cuban and U.S. authorities have been
fairly flexible in granting licenses to businesses that are related
in some way to this activity,” said Gerardo González, an economist
in Puerto Rico and one of the organizers of PRMA’s next
mission. “That’s how Banco Popular got it done.” Born and raised
in Cuba, González was an analyst at the South American Studies
Center in Havana before migrating to Puerto Rico in 1996.
“Cuba right now is a challenging market. It’s not for
everyone,” he says. “That’s the significance of these missions, of
going and learning and building relationships. It’s a bet for the
future, like so many we make in business. The important thing
is to make your move now, because as the market opens up and
the embargo is later lifted, those companies that put in the time
and effort today will be best positioned to be rewarded—as the
Cubans like to say, the first companies who got in the line.”
From Cordero’s point of view, if you’re going to stand in line,
you might as well stand next to a Puerto Rican. “It’s all part of a
chain, and I can point to a lot of links in the chain that have to improve.
But there is one that has stood the test of time and remains
a big part of building relationships in Cuba, and it comes back to
dos alas,” he says. “When it comes to Cuba and Puerto Rico, that’s
one link in the chain you don’t have to worry about.” H
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86 CUBATRADE APRIL 2017
Glexis Novoa's Untitled (1989).
Perez Art Museum Miami collection.
Photo courtesy of Museum of Fine Arts, Houston
The latest exhibition of post-revolution Cuban
art on display at Houston’s Museum of Fine
Arts is a testimony to time and displacement
SAYING GOODBYE TO UTOPIA
By Ariana H. Reguant
"From Aachen to Zurich” (2005) depicts the word Revolución in changing typographies
“Untitled” (2013) by Alejandro Rodríguez Falcón
Russian military-style posters at the installation of Adios Utopia
The museum had not yet opened and there was already
a line of people all the way to the corner. It was a rainy
Sunday in March, and the exhibit “Adios Utopia: Dreams
and Deception in Cuban Art since 1950” was opening to the
public at Houston’s Museum of Fine Arts (MFAH).
From the museum’s second floor, huge panels depicting heroic
images with Russian lettering ushered visitors into what might
have been an homage to a bygone dream world, the revolutionary
utopia. What followed, however, was not the evidence of a failed
project, but a testament to the creative experimentation made
possible by revolutionary socialism—even if in spite of itself.
Adios Utopia is ambitious. Organized by the Cisneros Fontanals
Foundation (CIFO), in partnership with the MFAH and
the Walker Art Center in Minneapolis, it is co-curated by René
Francisco, Gerardo Mosquera and Elsa Vega, all distinguished
scholars, critics and curators. It is probably the most comprehensive
exhibition of post-revolutionary Cuban art ever undertaken.
It is not, however, a chronological retrospective. Rather, it responds
to a thesis: Artistic experimentation was intrinsic to a revolution
that was, first and foremost, ideological. Even as it pushed
the limits marked by Fidel Castro’s guiding motto, “Within the
Revolution, everything; against the Revolution, nothing,” art was
meant not to merely interpret reality, but to remake it.
The exhibit spans the last six decades, with works familiar
to connoisseurs but unknown to the general public. It includes
photojournalism as well as poster art and comic strips that were
central to a revolutionary project that sought to make culture
available to the masses.
That raw zeal is apparent; it was more than a quarter century
after the Revolution before the Instituto Superior de Arte (ISA)
was founded for the professionalization of contemporary artists.
But by the time the first cohort graduated, the crisis of the Mariel
boatlift had left behind a general disenchantment that produced
the most critical art in recent memory. This well-educated elite
became at once the Revolution’s source of pride and failure. The
New Man was not a yes-man.
Adios Utopia only loosely follows a time line. It is instead
structured around recurrent preoccupations, both in terms of artistic
form and of the artists’ critical gaze. The marvel of pre-revolutionary
abstraction that sought to speak in a universal language
is soon silenced by the euphoria of the epic sixties. Photojournalism,
poster art, and comic strips served the state’s merger of art
and ideology in the service of a political project.
Later this popular art was deconstructed by Cuba’s newly
educated artists. In the museum, a heroic image like Korda’s Che
is pointedly placed in dialogue with its subversions, including
Tomás Esson’s painting of a mute Ché watching a scatological
act (“My Homage to Che,”1987) and Arturo Cuenca’s photograph
of the supporting structure to a gigantic Che billboard
(“Science and Ideology: Che,” 1987-88).
Similarly, in a section on revolutionary rhetoric, works seek to
divert the viewer’s attention from content to form. Ernesto Oro-
za’s animation “From Aachen to Zurich” (2005) flashes the term
“Revolution” with changing typographies, as if to strip the term
from its aura, while contributing to its overwhelming presence.
In another section, devoted to what playwright Virginio
Piñera called the “damned circumstance of water everywhere,”
artists ponder the twin conditions of island and exile. The
exhibit’s own farewell is “Inverted Utopias,” comprising works
that challenge that “within” of the Revolution by exposing both
ideology and the critiques that have worked to reinforce it.
Among all these works, one that is small, understated, and
as white as the wall behind it, can be seen as a powerful synthesis
of this proclaimed post-utopian turn in Cuban art. It is a scruffy
square volume of what appears to be paper pulp, still revealing
fragments of words and ink: “Untitled” (2013), by Alejandro
Rodríguez Falcón. Through a manual process of paper recycling,
Rodríguez reduced an official pocket-sized copy of the 1976 Cuban
Constitution—its first socialist Constitution—to wet paper.
In so doing, it turned it into a unique art object.
Like Ai Wei Wei’s famous smashing of archaeological vases,
Rodriguez’s iconoclastic gesture is the art’s genesis. He degrades
the most valuable symbol of the nation, its foundational document,
the revolutionary state’s own contract with its citizens, in
an act of wishful thinking. Then, it carefully displays it behind
glass and inside an oversized frame, as a precious object whose
value no longer resides in its content but in its bare materiality.
Unlike Wei Wei, Rodríguez does not claim the capitalist
market as the arbitrator of value. His might be the kind of act
that in 1990 cost another artist, Angel Delgado, prison time
when he defecated on a Granma newspaper. Today, however,
the Constitution’s defacement hardly produces scandal. Instead,
we squint at the nicely framed volume and celebrate the clever
aesthetics of the transmuted object, whose destruction we were
not invited to witness.
If the museum is the place for salvaged relics, the Cuban
Constitution is there before its time. The Constitution’s power
exceeds its matter; and it still rules the law in the land, unthreatened
by the artist’s act. Which begs the question: Has art, like
the Revolution itself, lost its power to shock and awe, or at least
provoke the imagining of another world?
We know one thing: They no longer need each other, and the
very organization of Adios Utopia proves this point. Cuban state
institutions did not participate, and the artworks were selected
from private collections and museums outside Cuba, apparently
to prevent bureaucratic impediments at an uncertain time in
One has to wonder if an adios to utopia is not a farewell to
art itself—and hope that this is just a momentary surrender. H
““Adiós Utopia: Dreams and Deceptions in Cuban Art Since 1950” is accompanied
by a catalog coordinated by CIFO’s chief curator Eugenio Valdés Figueroa.
The exhibit is on view through May 21 at the Museum of Fine Arts, Houston.
90 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
A Visit to Holguín
A veteran Cuba
watcher revisits the
city and province of
Holguín after a 20-
year absence to
discover that much
By Doreen Hemlock
Photos by Jon Braeley
Cuba’s northeastern province of Holguín is best known for
farming, beach resorts and indigenous history, but I must
admit that what surprised me the most was my octopus
dinner: two large discs with legs extended like sunrays, deliciously
grilled, with vegetables, for about $8. I’d have paid at least $35
in Miami for something smaller and not as tasty. Wasn’t this
supposed to be a backwater?
Much has changed in the 20 years since I first visited Holguín
en route to a Revolution Day speech, when the food was
nothing to write about. Back then, it was hard to find a local who
would talk to a U.S. reporter. The few foreigners in town stayed in
government hotels and ate in state-owned restaurants. Tourism
was just starting to be embraced in Cuba after the collapse of the
Today, locals in Holguín chat easily with the many visitors
from Canada, Spain, Italy and other nations. There’s a boom in
privately owned homes renting out rooms, plus private taxis and
For sunsets, tourists flock to the Loma de la Cruz, or
Hill of the Cross, for an expansive view over the city
Holguín boasts five main plazas with traditional parks and Spanish-style churches. Students from Montreal, Dana Moshaev and Dennis Mirne Guardalavaca lifeguard Carlos Medina, proudly displays his tattoo
private eateries like TripAdvisor’s top-rated 1910 Restaurante,
where we dined three times for octopus and other treats. Tourism
is taking off, with more hotels planned along the province’s white
sand beaches including Guardalavaca.
To be sure, many things remain the same. I was the first
American woman that many of my new acquaintances had ever
met. Most people I talked with had never been outside of Cuba,
and many hadn’t even visited Havana, some 500 miles away.
Holguín is still a distant province in a once-isolated nation,
but it was clear as soon as I touched down at the airport that it
was a long way from 1997. For starters, we flew in from Miami
on American Airlines for around $200 round-trip. U.S. commercial
flights to Cuba began just last year after a half-century hiatus;
charters before that had often cost more than double. Holguín’s
Frank Pais International Airport, named for a leader of the
Cuban Revolution, used to be smaller, and I recall a mural on the
airport wall of Fidel Castro and other revolucionarios with thick
beards. Now, I saw only tourist posters.
Our taxi driver, José Serrano, turned out to be an agricultural
engineer who used to run a state enterprise overseeing hundreds
of workers. He said he now earns more money working fewer
hours with fewer headaches driving tourists and others in his
1980s Russian car. José dropped us at one of the city’s five main
plazas next to a traditional park with a Spanish-style church.
We rented rooms in a 1913 house that hosted a private medical
practice before the Revolution. The family, who inherited the
house and now lives there, calls it Casa Don Diego to honor their
young son. They’ve been renting to travelers for three years.
Greeting us was friendly and efficient Sahily Fernández, the
wife and mom who holds a degree in economics and worked 13
years in banks. She offered us fresh guava juice as she filled out
government paperwork required for rentals. Her husband, a doctor
named Nestor Mendez, had spent five years in Venezuela on a
medical mission that paid better salaries than those in Cuba. He
saved up that money and invested it in appliances and improvements
to the house. He never could have afforded the upgrades
and entered the tourism sector, we found out, if he’d relied only
on salaries paid in Cuba. Specialist doctors in Cuba typically earn
less than $90 per month, even after recent raises.
I paid 25 CUC, or about $28, per night for a clean, spacious
room upstairs, with gorgeous Cuban floral tiles, a 13-foot ceiling
and a view overlooking a clay-tile roof to hills in the distance. I
had my own bathroom just outside in the hall. Breakfast cost less
than $5 per day for a fruit plate with fresh guava, mango, banana,
and pineapple, plus eggs, ham, cheese, toast and all the café con
leche I could drink. In Havana, the room likely would run 30-50
CUC and breakfast 5 CUC or more.
To stay in touch with the United States, I bought a card
from the office of state telecom company ETECSA in the city’s
main plaza, and either stood or sat there to use wifi at a cost of
1.50 CUC per hour. Around me, locals chatted over video-apps
with family and friends overseas, and some children called out
“Papi.” Wifi connections were much better than in Havana,
possibly because there were fewer users at each wifi spot. Even 10
years ago, the idea of public wifi would have been unthinkable.
In all, more than 1 million people now live in Holguín province,
including some 300,000 in the municipality that hosts the
capital dubbed “the city of parks.” The place gets its name from a
Spanish military officer who founded a settlement there in 1545.
A world-class bronze mural spanning an entire block next to a city
park depicts the area’s history, starting with the indigenous Taino
Indians, the Spanish conquistadors and Holguín himself, slavery
and abolition, and Cuban independence. It’s only part of the
extensive street art added around the city in recent years, including
clay sculptures that resemble trees and life-size bronze figures.
Still, for many visitors, the real attraction isn’t the town but
the province’s largely undeveloped beach. We headed out one day
to Guardalavaca, a favorite among Canadians for its powdery
white sand. There we met lifeguard Carlos Medina, 39, who has
family in Canada and Italy, but prefers to stay in Cuba where he
earns a decent living in tourism. He proudly wears a tattoo that
says in English, “We may not have it all together, but together, we
have it all.”
Sunning on beach chairs were two college students from
Montreal: Dennis Mirne, 22, and Dana Moshaev, 23, who both
speak Spanish. Mirne was on his third trip to an all-inclusive
resort on the beach and encouraged his friend to join. The price:
About $700 each, covering round-trip airfare on Cubana Airlines
from Canada and a week-long stay with food, drinks, and even
alcoholic beverages. “It’s safer compared to Mexico or other places,”
said the finance major, who had traveled outside the resort
to hang out in a city nightclub, among other spots. “And price to
quality, the value is very good.”
A student of history, I couldn’t forego a visit to a Taino burial
site near Guardalavaca. Excavated by a team from the University
of Holguín, it’s been made into a small indigenous museum,
Chorro de Maita, that also exhibits relics such as coral-bead bracelets
and ceramics. Across the street there’s a somewhat touristy
recreation of a Taino village, which does manage to convey the
basics of life before Christopher Columbus, including the round
palm-roofed huts called bohios, the hammocks used for sleeping,
and the many plants used for medicine.
For sunsets, we were advised to scale the Loma de la Cruz, or
Hill of the Cross, for an expansive view over the city. José took
us by taxi, but many locals climbed the 365-plus stairs to the top,
some in exercise gear. Visitors from near and far happily snapped
Driving past sugarcane fields, farms, a baseball stadium, and
even a hotel that boasts the renown beer-drinking donkey Pancho,
you can work up an appetite in Holguín. I heartily suggest
a visit to the 1910 Restaurante, run by Hugo Pupo and his wife
Marisol Corpas in a family home. Pupo said few Americans
come, but he welcomes them: “They tip the best.” And definitely,
if you like seafood, order the octopus, grilled. H
94 CUBATRADE APRIL 2017
APRIL 2017 CUBATRADE
MYSTIQUE OF HAVANA
One of the greatest charms of former
Chicago Tribune Caribbean correspondent
Mark Kurlansky’s Havana: A Subtropical
Delirium, is that it’s not quite a book on
the history of Havana, but rather, the
history of Havana-isms.
Instead of segmenting five centuries
of the city’s history into chapters that
follow chronological order, Kurlansky
wrote fifteen short chapters (including an
epilogue and prologue) on themes that
have shaped the identity of modern Havana.
These themes include the complicated
relationship Habaneros have with the sea
that hugs their beloved Malecón, the ways
mulatas (women with black and white ancestry)
have charmed locals and foreigners
alike, and the growing pains of nationalizing
industries that were prosperous before
Havana: A Subtropical Delirium also
succeeds in distancing itself from discussing
the city’s clichés. The work doesn’t
dedicate itself to reiterating the often-repeated
tales of the CIA allegedly trying
to send Fidel Castro exploding cigars.
Instead, it focuses on Castro’s infatuation
with ice cream and his efforts to get
96 CUBATRADE APRIL 2017
Mark Kurlansky’s Havana:
A Subtropical Delirum offers an
intimate look into what makes
Havana a city like no other
By Nick Swyter
Vedado’s iconic Coppelia ice cream parlor
off the ground. Kurlansky also doesn’t
dedicate entire chapters to Ernest Hemingway’s
time in Havana. Rather, the book
discusses modern Havana’s obsession with
the legendary writer and what happened
to papa’s housekeeper after he died and
Castro tightened his hold on Cuba.
The result is a book that strays from
repeating what most already know about
Havana, and instead tells the origins of
the city’s unique cultural characteristics.
While the book includes original drawings,
recipes, and historic photos, Kurlansky
truly captures the pulse of Havana by
showcasing the works of influential Cuban
writers. They are referenced so often—
and to such great effect—that the book’s
dedication reads: “To Cuban writers, those
who opposed the Revolution, those who
supported it, and those who did both.”
Kurlansky references the poems
of revolutionary leader José Martí to
showcase the yearning for a free Cuba in
the late 19th century. He also cites Cirilo
Villaverde’s Cecilia Valdés to explain the
social ills created by slavery in Cuba. The
detective novels of Leonardo Padura are
also included to show how literature that
doesn’t paint Cuba in a positive light will
sometimes be tolerated.
Showing Havana through the
eyes of writers, rather than academic
historians, also has the effect of painting
multilayered portraits of the city.
The book doesn’t skimp on imagery.
Kurlansky, and the writers he references,
illustrate the yellow hues of Havana’s
crumbling buildings and the violet
of the sea during daybreak. Readers
will also appreciate the description of
Cuba’s unbearable sun, as well as the
omnipresent sweat––and the shade that
Habaneros use to beat the heat.
Havana is a city known for inspiring
different reactions from nearly everyone
who visits. They range from romanticism
to frustration. Throughout history, countless
people have found beauty in Havana’s
chaos. Others have shown outrage
towards the city’s leadership—whether it
was Spanish, American, or a member of
the Castro family. Kurlansky’s guide to
Havana is an entertaining collage of the
attitudes that have existed throughout its
five-century history. H
Top Economic thinkers from US
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High Tech Cuba
Software, telecom, biomed and
The Tourism Issue
A look at the hospitality industry as
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The Cuba Advisors
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Leading sectors emerging in the
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Foreign Direct Investment
The top sectors–and Cuban priorities–for
Subscribe online at
Put America first
by lifting the
By U.S. Senator Jerry Moran (R-Kan.)
Approximately 95 percent of the world’s consumers live outside
America’s borders. Markets in the United States will continue to
evolve to meet domestic consumer demand, but the vast majority
of the future growth in food and agriculture markets will be made
through exports. And the best way to boost prices for American
producers now and in the future is to export more of our agriculture
products to these foreign markets.
Our farmers and ranchers produce the safest, highest-quality
products in the world. Despite this advantage, we are in the
midst of one of the worst economic downturns for farmers since
the Great Depression, with farm income down nearly 50 percent
since 2013 and expected to continue its decline.
The 2016 harvest in Kansas and across much of the country
had record-breaking yields, but unfortunately, there are still large
piles of wheat, corn, and other grains sitting on the ground next to
grain bins that are filled to capacity. American farmers need more
markets to sell the excess supply of food and fiber they produce.
Meanwhile, only 90 miles from our shore, Cuba and its
11 million people offer a significant opportunity for increased
exports. As in years past, I am again championing legislation that
would lift our nation’s Cuba trade embargo so we can improve
the outlook for American farmers and ranchers.
Cuba imports the vast majority of its food. In fact, wheat is
Cuba’s second largest import, second only to oil. And when we
don’t sell to Cuba, another country does. While our unilateral
trade barriers block our own farmers and ranchers from feeding
this market, willing sellers such as Canada, France and China
benefit at the expense of American farmers.
To understand what we are missing out on, consider our
current trade relationship with the Dominican Republic (D.R.),
another nearby Caribbean nation with a comparable population,
income level, and diet. Between 2013 to 2015, the D.R. imported
an average of $1.3 billion in U.S. farm products. During the same
time, Cuba imported just $262 million. That difference represents
a billion dollars of exports that U.S. farmers are missing out on
because of our trade restrictions on Cuba. There is a clear and substantial
potential for increased exports if we lift the trade embargo.
My bill, the Cuba Trade Act, would amend our country’s
laws so American farmers can operate on a level playing field
with the rest of the world. As I often say, in Kansas we will try
anything once—and sometimes twice or even three times. However,
when we have been trying something for more than five
decades and it has yet to work, it is time to change direction.
The Cuban embargo was well intentioned when it was
enacted. Today it only serves to hurt our own national interests by
restricting American freedoms to travel and to conduct profitable
business. If we’re truly committed to putting America first, lifting
the embargo is an easy choice. I encourage my colleagues to
recognize the need for this change, and to join me in my effort to
open the Cuban market for the good of the American people. H
Sen. Jerry Moran (R-Kan.) recently introduced Senate Bill S.472 to
lift the U.S. embargo against Cuba.
98 CUBATRADE APRIL 2017
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