GIP Cuba Continues: Emphasis on Foreign Direct Investment & Foreign Relations

(Due to a lack of internet connectivity in Havana, this blog entry is backdated to Friday, 21 March)

GIP Cuba continues! The second half of our trip has had a much stronger emphasis on foreign direct investment and US-Cuba relations, two areas which are inextricably intertwined. We have heard speakers from all sides – government and private sector, Cuban & foreign – and the combination of their opinions are beginning to create a more cohesive picture of the business environment within Cuba.

Wednesday began with a trip to the US Interest Section (not to be confused with “Intersection”). We met with a Foreign Service Officer who handles logistics and manages the day-to-day operation of the Interest Section. In true State Department fashion, he was a bit vague about the state of US-Cuba relations, and how difficult/not-difficult it has been for him to do business in this country. However, we were able to learn that the Interest Section is technically located within the Swiss Embassy, and employs more than 400 Cubans. The Interest Section performs the vital role of assisting with the issuance of visas for those who want to visit the US, and hundreds of Cubans apply each day. Only 20,000 visas are granted, per year, which means that many are turned away without a visa.

On Thursday, we took a 2 hour bus ride to the coastal area that handles the majority of international tourists. This was a completely different side of the Cuba that we had seen so far (Havana): the resort that we visited boasted several restaurants, a golf course (the only one in Cuba!), pools, and luxury accommodations. Our visit was not, however, all work and no play. We listened to a lecture on the state of the Cuban tourism industry, during which the lecturer emphasized the importance of the US market. Following the implementation of the US embargo, he said, tourism rates dropped, drastically. The Cuban Government implement “The Tourism Plan” in 1990, to encourage recovery, but growth has been slow. In an effort to revive the industry, the Cuban government has made arrangements with foreign companies from many different countries. These foreign companies, such as the Brazilian company Barcelo, bear the brunt of the financial investment that is required to build and maintain these resorts. They provide a significant amount of the intellectual capital, as well.

Talk of foreign investment continued on Friday, when the class received a lecture on the construction of the Mariel Port. Oberbrecht, a Brazilian company, has financed 72% of the construction costs, and expects the port to be completed by 2014. The Mariel Port will be capable of handling the largest class of commercial ships, and has been built to allow for future expansion. The Cuban government, and private sector, are looking forward to the day that this expansion will be needed.

It has been fascinating to get a window in to the way that Cuba is currently managing – and attempting to expand – the level of foreign direct investment. All lecturers have admitted that Cuba must continue to find ways to make it easier for foreign countries to do business in their country. The Cuban government must put the infrastructure in place to support this type of investment!  I am anxious to see how the Cuban government handles this immense task, and to find out which countries will step up to help our neighbor to the south.

Our class heads to Havana Café tonight, to celebrate the successful completion of our trip. On Saturday, we will begin what is sure to be a long trip home.

Katie Horgan ‘14

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