Open for Business: Building the New Cuban Economy PDF
Preview Open for Business: Building the New Cuban Economy
RICHARD E. FEINBERG is a nonresi- AN EXPERT GUIDE TO CUBA’S F OPEN FOR BUSINESS E dent senior fellow in the Latin America ECONOMIC OPENING TO THE WORLD I N Initiative at Brookings and a professor in BUILDING THE B “ A masterful and very readable sojourn “ Whether you agree or disagree with the School of Global Policy and Strategy, E NEW CUBAN ECONOMY through the new Cuban economy as it President Obama’s normalization of R University of California–San Diego. Pre- moves toward market socialism— the U.S. ties with Cuba, Richard Feinberg’s G viously, Feinberg served as special assis- problems that triggered the sweeping Open for Business is required reading O tant to President Bill Clinton and senior reform changes of 2011, the remedies for Cuba watchers. Feinberg, a frequent P director of the National Security Coun- prescribed, the expansion of private busi- traveler to the island, has been research- E Ninety miles across the Straits of Florida, N cil’s Office of Inter-American Affairs. He ness, and the opening to foreign direct ing business conditions there since a new Cuban revolution is stirring. This also worked at the Department of State investment, topped off with vignettes of long before Obama’s 2014 decision to F time, instead of guerrillas marching down O how a talented group of Cuban millen- normalize ties with Cuba, and his writ- and U.S. Treasury. He currently serves as the streets of Havana, it is the global econ- R nials sees the future—and hope to ings no doubt influenced the U.S. pres- the book reviewer for the Western Hemi- omy that will upend Cuba. As the coun- shape it.” ident’s policy. Feinberg goes far beyond B sphere section of Foreign Affairs magazine. U try’s once solidly socialist economy opens —William LeoGrande, professor of the macroeconomic figures, and takes S further to the world, what new forms is it government at American University us right into what’s happening on the I and coauthor of Back Channel Cuban streets.” N likely to take? E to Cuba: The Hidden History —Andres Oppenheimer, columnist S Open for Business: Building the New Cuban of Negotiations between for the Miami Herald, anchor S Economy examines the island’s still stag- Washington and Havana on CoNfN “O epnp Eesnphaeñimol,e ar nPdr easuetnhtoa”r N B nant sectors and market-driven changes “O pen for Business is fueled by case EU of Innovate or Die! WI under way as the country takes its early studies and the author’s own experiences L steps toward a more dynamic growth C throughout years of interacting with aca- “ Any executive interested in doing D UI model. Richard E. Feinberg, a longtime demics, entrepreneurs, and Cubans from business in Cuba should read Open for B N all social classes. Feinberg shows a deep Business. The book contains essential A observer who has been at the forefront of G respect for Cuba and a subtle intelligence economic data and insights into Cuba’s N G advocating for the recent diplomatic open- T R when proposing alternatives. His book reforms. A top expert on today’s Cuban E ing between the United States and Cuba, H C E will encourage commentaries, both economy, Feinberg presents instructive OE B BUILDING examines key issues such as the vital role friendly and critical, across the political case studies of international business N N THE NEW of foreign investors, how Cubans will forge spectrum. Feinberg approaches Cuba successes—and of potentially costly pit- O M I a path to innovative entrepreneurship, and from the perspective of a meticulous falls to avoid.” Y E CUBAN the alternative road maps inspired by other researcher who has invested considerable —Carlos Gutierrez, chair of the F ECONOMY emerging economies. time getting to know my country.” Albright Stonebridge Group, chair . —Juan Triana, graduate professor, of U.S.-Cuba Business Council, E As Cuba’s economy awakens from its Center for the Study of the Cuban former CEO of Kellogg, and B D post-Castro dream, it will do so with a Economy, University of Havana former U.S. Commerce Secretary R O R flavor that is uniquely Cuban. Enriched O A by interviews and in-depth field research K H Brookings Institution Press I C conducted over the past five years, this N Washington, D.C. I volume speaks both to Cuba’s legacy and G Cover by Anne Masters Design www.brookings.edu/press S R to its new horizons on the world stage. 15-003 Cuba_dustjacket_v4 JUSTIFIED.indd 1 5/16/16 9:26 AM RICHARD E. FEINBERG is a nonresi- AN EXPERT GUIDE TO CUBA’S F OPEN FOR BUSINESS E dent senior fellow in the Latin America ECONOMIC OPENING TO THE WORLD I N Initiative at Brookings and a professor in BUILDING THE B “A masterful and very readable sojourn “Whether you agree or disagree with the School of Global Policy and Strategy, E NEW CUBAN ECONOMY through the new Cuban economy as it President Obama’s normalization of R University of California–San Diego. Pre- moves toward market socialism—the U.S. ties with Cuba, Richard Feinberg’s G viously, Feinberg served as special assis- problems that triggered the sweeping Open for Business is required reading O tant to President Bill Clinton and senior reform changes of 2011, the remedies for Cuba watchers. Feinberg, a frequent P director of the National Security Coun- prescribed, the expansion of private busi- traveler to the island, has been research- E Ninety miles across the Straits of Florida, N cil’s Office of Inter-American Affairs. He ness, and the opening to foreign direct ing business conditions there since a new Cuban revolution is stirring. This also worked at the Department of State investment, topped off with vignettes of long before Obama’s 2014 decision to F time, instead of guerrillas marching down O how a talented group of Cuban millen- normalize ties with Cuba, and his writ- and U.S. Treasury. He currently serves as the streets of Havana, it is the global econ- R nials sees the future—and hope to ings no doubt influenced the U.S. pres- the book reviewer for the Western Hemi- omy that will upend Cuba. As the coun- shape it.” ident’s policy. Feinberg goes far beyond B sphere section ofForeign Affairs magazine. U try’s once solidly socialist economy opens —William LeoGrande, professor of the macroeconomic figures, and takes S further to the world, what new forms is it government at American University us right into what’s happening on the I and coauthor ofBack Channel Cuban streets.” N likely to take? E to Cuba: The Hidden History —Andres Oppenheimer, columnist S Open for Business: Building the New Cuban of Negotiations between for the Miami Herald, anchor S Economy examines the island’s still stag- Washington and Havana of “Oppenheimer Presenta” on CNN en Español, and author NB nant sectors and market-driven changes “Open for Business is fueled by case EU ofInnovate or Die! WI under way as the country takes its early studies and the author’s own experiences L steps toward a more dynamic growth C throughout years of interacting with aca- “Any executive interested in doing D UI model. Richard E. Feinberg, a longtime demics, entrepreneurs, and Cubans from business in Cuba should read Open for B N all social classes. Feinberg shows a deep Business. The book contains essential A observer who has been at the forefront of G respect for Cuba and a subtle intelligence economic data and insights into Cuba’s N G advocating for the recent diplomatic open- T R when proposing alternatives. His book reforms. A top expert on today’s Cuban E ing between the United States and Cuba, H C E will encourage commentaries, both economy, Feinberg presents instructive OE B BUILDING examines key issues such as the vital role friendly and critical, across the political case studies of international business N N THE NEW of foreign investors, how Cubans will forge spectrum. Feinberg approaches Cuba successes—and of potentially costly pit- O M I a path to innovative entrepreneurship, and from the perspective of a meticulous falls to avoid.” Y E CUBAN the alternative road maps inspired by other researcher who has invested considerable —Carlos Gutierrez, chair of the F ECONOMY emerging economies. time getting to know my country.” Albright Stonebridge Group, chair . —Juan Triana, graduate professor, of U.S.-Cuba Business Council, E As Cuba’s economy awakens from its Center for the Study of the Cuban former CEO of Kellogg, and B D post-Castro dream, it will do so with a Economy, University of Havana former U.S. Commerce Secretary R O R flavor that is uniquely Cuban. Enriched O A by interviews and in-depth field research K H Brookings Institution Press I C conducted over the past five years, this N Washington, D.C. I volume speaks both to Cuba’s legacy and G Cover by Anne Masters Design www.brookings.edu/press S R to its new horizons on the world stage. 15-003 Cuba_dustjacket_v4 JUSTIFIED.indd 1 5/16/16 9:26 AM Open fOr Business Feinberg_Cuba_i-viii_1-264_4thpass.indd 1 5/2/16 10:14 AM Feinberg_Cuba_i-viii_1-264_4thpass.indd 2 5/2/16 10:14 AM Open fOr Business Building the New Cuban Economy Richard E. Feinberg Brookings Institution Press Washington, D.C. Feinberg_Cuba_i-viii_1-264_4thpass.indd 3 5/2/16 10:14 AM Copyright © 2016 THE BROOKINGS INSTITUTION 1775 Massachusetts Avenue, N.W., Washington, D.C. 20036 www.brookings.edu All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the Brookings Institution Press. The Brookings Institution is a private nonprofit organization devoted to research, education, and publication on important issues of domestic and foreign policy. Its principal purpose is to bring the highest quality independent research and analysis to bear on current and emerging policy problems. Interpretations or conclusions in Brookings publications should be understood to be solely those of the authors. Library of Congress Cataloging-in-Publication data are available. ISBN 978-0-8157-2767-5 (cloth) ISBN 978-0-8157-2768-2 (epub) ISBN 978-0-8157-2769-9 (pdf) 9 8 7 6 5 4 3 2 1 Photos by Richard E. Feinberg Typeset in Minion and Helvetica Neue Condensed Composition by Cynthia Stock Silver Spring, Maryland Feinberg_Cuba_i-viii_1-264_4thpass.indd 4 5/2/16 10:14 AM Contents Map of Cuba vi Cuba Opens a Door to the World: The United States Engages 1 1 The Old Cuban Economy and Raúl Castro’s Efforts to Fix It 23 2 Dancing with Many Partners: Good Balance, Poor Execution 45 3 Opening to Foreign Investment: New Portfolio Opportunities 66 4 Joint Ventures in Cuba: Seven Case Studies 98 5 Emerging Entrepreneurs and Middle Classes 131 6 Millennial Voices: Ambitions and Visions 172 7 Scenarios: Dreaming in Cuban 196 8 Appendixes A. Cuba: Basic Facts 223 B. Questions Posed to Cuban Millennials 225 Acknowledgments 227 Notes 233 Index 253 v Feinberg_Cuba_i-viii_1-264_4thpass.indd 5 5/2/16 10:14 AM Feinberg_Cuba_i-viii_1-264_4thpass.indd 6 5/2/16 10:14 AM Morro Castle and Lighthouse, first built in 1589 to stand guard over the entrance to Havana Harbor Feinberg_Cuba_i-viii_1-264_4thpass.indd 7 5/2/16 10:14 AM Feinberg_Cuba_i-viii_1-264_4thpass.indd 8 5/2/16 10:14 AM
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