28 Jul 2017
There are very few instances in your lifetime where you can visualize and experience a nation evolve.
This evolution assumes heightened significance when it spans the entire spectrum of social, economic, cultural and political aspects.
Based on my past 40 years of diplomatic service, the evolution of Cuba is extremely interesting, as well as engaging. Cuba was fairly isolated from the western world for a majority of its recent history. First because of US sanctions and second because of its choice to pursue the Soviet political and economic model. Although Cuba has survived and managed the impact of this seclusion, its continued isolation has proven impractical and unproductive. The world has become digitally connected and the envelope of sanctions and subsequent isolation makes the current situation impractical and unsustainable.
My personal observation is that the country’s political leadership and population have realized that for Cuba to evolve it must embrace the global growth trajectory, but like any other change, this right of passage will not be easy or quick. It will be a process with expected highs and lows.
The process needs to be initiated from both ends. As Cuba opens up and becomes more receptive to change, the global community, including the US, needs to be supportive and engaged on the other end. Cuba’s openness to foreign investment is a positive sign. While US investors must still contend with US sanctions, the rest of the world has the opportunity to get a head start on what I expect will be an evolution in Cuba that leads to a further easing of US economic restrictions.
Attracting investment: learning how the rest of the world works
Cuba’s isolation from the world economy will require a fast learning curve. The Cubans now need to understand the nuances of the rules of engagement with the global community, including private investors. My other observation is that while the Cuban people and many government officials are eager to make this transition, they are concerned that the process could become unmanageable and lead to unpredictable outcomes.
Strengths required to effectively engage Cubans
To be successful in Cuba, there are subtle elements to be cognizant of. Two of the most critical ones are:
- In business and in all things in Cuba, the first thing to remember is to be patient. Capitalist are not usually patient. They don’t make money being patient. Remember, Cubans have very different experiences and assumptions about the world. I recommend people listen carefully and help the Cubans to understand your point of view. Be open, listen and explain to them what works for you and what you need to make a viable investment.
- Another significant aspect is relationships. You need to develop personal relationships. Face to face contact is preferred and compelling. You cannot be successful in business in Cuba through email and Skype. You need to be there in person and gradually build relationships.
In closing, I believe given the greenfield opportunity that this country presents with ample real estate, raw materials, manpower and location, it is of considerable value to include Cuba on your investment horizon. RICS has taken a great initiative kick starting this journey by involving multiple stakeholders and starting the conversation about options of opportunity with the larger international community.
For more insights on the real estate and construction industry, a good logical step could be to reach out to RICS and then engage the appropriate individuals. You can reach out to me for my personal comments.
When we look at Cuba we see the opportunities but we need to help the Cubans understand what needs to be done to make real estate investment realistic and successful. Where Cuba goes next is up to Cuba and how we respond to it. The door is half way open and people here are anxious for opportunity.
Authored by John Caulfield, Former Chief of Mission U.S. Interests Section in Havana
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