Asi Es Cuba

In case you missed them, take a look at our prior posts.

School pride on the walking tour of Havana

It’s been a little over a week since the last of us returned from Cuba and it’s safe to say that – at least for us first-time Habaneros – no amount of classroom time could have prepared us for what we found. Textbook accounts of political and social challenges can never replace conversations with local business owners as they recount their struggles to purchase basic supplies. Similarly, pictures of the Malecón highway could not diminish the surreality of seeing roadways filled with classic American cars.

Through speakers and company visits, we were exposed to a side of Cuba that few are able to see. Moreover, it’s a side of Cuba that may very well cease to exist should the economic transition continue. However, for all its flaws and all its beauty – we fall back to Asi es Cuba. Nothing quite compares.

As for the questions we prepared prior to leaving…

How do the Cuban people view their neighbors? The U.S.? Venezuela?

Old Cuba may have spent most of its energy antagonizing the U.S. and forging alliances with fellow communist states, but New Cuba maintains a relatively positive focus on domestic development in spite of the Bloqueo. In fact, I would say one of our strongest takeaways from the week relates to just how much damage the embargo does to the Cuban people.

Title III of the Helms Burton Act allows U.S. companies to sue firms (Cuban or other) for “trafficking” in expropriated Cuban property. While Title III has historically been suspended by every U.S. President (until our current one, possibly), it is sufficient to make foreign investors wary of involving themselves too heavily in business on the island.

Further, the embargo does a massive disservice to cuentapropistas. Since Obama, Cuban entrepreneurs have been able to sell their goods in the U.S. Their products, however, are still subject to extremely high tariff rates – in some cases, up to 90%. The only other country with “Column 2” status under the U.S. International Trade Commission’s Harmonized Tariff Schedule is North Korea. As expressed by some cuentapropistas, the U.S. claims to support Cuban entrepreneurs while its policies seem to only make the life of a cuentapropista more difficult.

That being said, all seem to recognize that there is still plenty more the Cuban government must do to safeguard the growth of industry on the island. U.S. policy does not help matters, but it would be unfair to assert that the U.S. should shoulder all of the blame.

Pre-revolution ride

How has life changed since the introduction of 3G cellular service on the island? What has stayed the same?

3G cellular service has had an undeniable impact on the availability of information in Cuba. For a population that once relied on a network of hard drives (dubbed, El Paquete) in order to disseminate information, WiFi was a game-changer. It stands to reason, therefore, that 3G service would have a similar impact on the mobility and accessibility of data – especially given the struggle to access WiFi networks on the island.

Of course, it wouldn’t be Cuba if there weren’t a handful of associated challenges. For one, not everyone can afford a phone or SIM card – and service isn’t available everywhere. Beyond that, a large portion of apps and internet services are blocked from use due to the embargo. The Apple app store is unavailable, as is our beloved Canvas (which made uploading an assignment very difficult for our author).

Sorry, Professor. My cash flow model got embargoed.

How do private citizens view themselves in the context of broader economic reforms? Is it a “reform or out” mentality? Or is there a “third way” between capitalism and Cuba’s communist past?

Cubans want private property, and they’re very glad that their new constitution recognizes this as a right. Now they want to make sure the government will defend this right to property as well as create a system by which individuals can grow their wealth. This trip certainly helped cement the innate human desire to create and the drive to achieve some level of ownership in life – the natural expression of which is entrepreneurship.

While Cubans are setting up their own businesses and appreciate the material benefits of capitalism, they are – by and large – proud of certain achievements in their history. The quality of their public health system, all things considered, is something that merits close examination. Moreover, Fidel’s vision for Cuba truly did create a racially diverse and relatively non-divisive society. Cubans don’t want to lose these tangible and intangible qualities that make their nation unique. Even worse would be a return to the rampant economic inequality of the pre-revolution days. While New Cuba seems to be defined by a desire to build and reform industry on the island, we certainly did not get the impression that Cubans as a whole are striving for full-blown, American-style capitalism.

And I’m sure they’d like to keep their cars, too.

With our questions answered and our “Bucket List” items checked off, we say goodbye to Cuba and hope to return very soon!

Until the next time…

Casey Buckley is a 2020 MBA Candidate at Columbia Business School

Missing the views and people of South Africa

The view of Cape Town from Table Mountain. (Photo by Michael Zifang Fan)

The first few weeks of class after spring break have been nonstop, so it’s nice to take a moment to remember the people and businesses we got to know in South Africa.

The country is facing unique challenges, straddling some of the benefits of a developed economy with some of the challenges of an emerging market country. It was incredible to visit the Johannesburg Stock Exchange and to hear about the challenges of maintaining the largest stock exchange in Africa in an environment with load shedding, or scheduled power outages.

At the Johannesburg Stock Exchange.

We met with financial firms launching new digital banks meant to target low to middle income South Africans — a group that went largely unserved by the formal financial system during the era of apartheid. We learned about a struggling retailer that is trying to rebuild after being overburdened with debt.

The waterfront in Cape Town. (Photo by Puja Kowley)

Our trip ended in Cape Town, a busy hub with stunning views on the southern coast of the country. It is fitting that our last company visit was Babylonstoren, an expansive farm and vineyard owned by CBS alum Koos Bekker (’84). The massive property also holds a hotel for guests who want to spend several days exploring the land and enjoying the good food and wine.

Based on what we saw that afternoon, Babylonstoren has plenty of services and activities to offer, leaving it with several diverse income streams. After a tasty spread and wine tasting, the head gardener took us on a private tour of the garden. We nibbled on fresh mint, sat on a lawn of chamomile, wet our feet in a fountain and snacked on citrus. All the while, we enjoyed views of the beautiful landscapes of Stellembosch. It was a fantastic way to end the trip. A big thank you to the organizers for planning such an incredible week.

–Jonnelle Marte ’19

Argentina – Mendoza & Wrap up

On Wednesday we had the unique opportunity to go to Adeco Agro’s headquarters in San Isidro to hear more about the biggest Agro-Industrial company in Argentina and recent insights on the sector. Mariano Bosch, the company’s CEO, shared the unique management transformation experience Adeco went through after its IPO on the NYSE in 2008. To end the day right, Adeco was also extremely generous to provide lunch for the Chazen crew so that we could head straight to the airport to fly to Mendoza.

After a two and half-hour flight, we landed in Mendoza city, hopped onto buses and headed to El Enemigo. This famous winery is owned by the renowned “Messi” of wine tasting, Alejandro Vigil. We had a delicious seven-course dinner accompanied by seven different varieties of white and red wine. After this exceptional meal, we headed south to Auberge du Vin, the Villa that hosted us in the incomparable Uco Valley.

Thursday was all about expanding our knowledge about Argentinian wine production, and of course, about Malbec tasting. We started our day in Salentein, the biggest industrial wine producer in the region, where we not only toured around the winery and learnt more about their different products, but also enjoyed Francisco Ventura’s piano and singing skills. Several classic hits from Queen and The Beatles were played and sang along to. This was followed by Salentein’s sustainability manager talking about the company’s mission beyond business, an inspiring vision to be shared with the group. The day continued at “Siete fuegos” (Seven fires in English), Francis Mallmann’s renowned restaurant at The Vines hotel. Many Chazen travelers commented: “This place looks like heaven”. The vineyards and the mountains melted together to host a seven-course lunch, once again, lubricated with the finest Argentinian wine. We ended the day visiting SuperUco, a boutique winery owned by the Michelini family, whose production is inspired by their admiration for nature. We received outstanding service, as we enjoyed the state-of-the-art technology and stylish architecture.

Chazen travelers at Salentein

Friday was the sports day of the trip. We started the day by rafting down Rio Blanco, a fun outdoor adventure which pushed us to do some physical activity that everyone enjoyed. After this, we had a horse-ride adventure around Potrerillos. Travelers felt more comfortable on the horses given that they had ridden at least one time on a horse before during Tuesday’s Polo lessons. After enjoying an asado (BBQ) all together, we headed back to Mendoza city to catch our flight back to Buenos Aires. Natalia Bondanza hosted the whole troop at her place for dinner and a real “Argentinian Preboliche” (pre-game) experience.

Unfortunately, every good trip comes to an end, but in this case, not without Professor Marco Viola’s generosity of hosting a farewell lunch at his country house. The bus went straight from Marco’s property to Ezeiza airport, to take everyone back to NYC after sharing an amazing Spring Break!

Thomas Amaral G’19
#CBSChazen
@ColumbiaChazen

Chazen China: Companies, Culture, & Companionship

After a week stateside, it’s been hard spending the hours not surrounded by my forty-one closest new friends. I take solace in the late-night texts of “anyone awake?” and “I’m so jetlagged, looking through the pictures for the 50th time.” Yes, it is nice to be in control of my hourly schedule, but the packed days filled with company presentations and cultural immersions are missed. Transitioning back to the daily struggle of foraging for breakfast has me missing the second to none breakfast buffets. Beyond thinking about my new Seoulmates and breakfast dumplings, I’ve had time to reflect on the business lessons I learned.

We hear on certain news stations that Chinese companies have an unfair edge because the government subsidizes private enterprises. A firsthand experience is necessary to understand the extent of this intertwinement. As I referenced in previous posts, the opportunities the government bestowed on particular companies (e.g., free land or buildings and free capital) often defined their success. What was even more fascinating to witness was the lack of conversation around this dynamic. I actually attempted to broach the subject with an executive from Shanghai Pharmaceuticals Holding Co. by saying: “Apologies that I cannot understand this business fact, maybe it is because I’m too American, but…” After a couple minutes discussing the influence of Chinese government in business, I walked away with no better understanding of my original question. Rather, I started to question myself. Who am I to say their methodology is “wrong”? The American government funds basic scientific research via the NIH and then transfers the technology to private enterprises. The Chinese government funds basic scientific research and then transfers the technology to enterprises in which it maintains significant ownership. Personally, I don’t think this system can succeed in a modern global environment; however, it clearly is working for the businesses we visited.

The other tangible business difference I observed was the Chinese executives’ lack of stage presence when they were speaking to a packed room. This could be credited to the fact that English is often their second or third language. Nevertheless, they didn’t have the same control of the room as the executives I’ve heard speak in Uris. For better or  worse, the Chinese executives with whom we met were calmer, quieter, and humbler. Brilliant, yes, but not evidently able to arouse a crowd or motivate a workforce with a speech.

The Chinese healthcare companies we visited clearly are advancing technology, building business, and saving lives. Nonetheless, there was a consistent layer of the “Chinese way.” Maybe I’ve been too entrenched in American capitalism to recognize tangible examples of the “American way” beyond free market principles, but witnessing a government significantly influencing businesses was unique.

The friends I made and soup dumplings I slurped were unforgettable; however, I keep reminiscing about the inimitable experience of meeting with countless executives and touring their companies’ infrastructure. Executives took time from their busy days to present to us and answer our countless questions. As a business school student, there is no better way to understand a culture than to meet and question the companies growing within the benefits and limitations of that culture.

Real Estate Immersion in Mexico

The Real Estate Study Tour to Mexico City has come to an end and it was a huge success! We had 7 full days of professional and cultural activities in which the group of 17 MBA students plus 2 representatives of the Paul Milstein Center for Real Estate learned about the nuances of the local market. Many things happened during the week so it is a good idea to recap!

Day 1: We all arrived at Oaxaca on the night of Saturday March 16th. Our hotel was beautiful and in line with the antique buildings of Oaxaca. After having a good night sleep we all met at breakfast and at 8 am we took a bus to Hierve el Agua. Our guide, Coco, offered us to make a 45 minute hike to see this amazing mineral formations and we all agree to do it. He did not mentioned that we had to go up and down about 400 steps! We enjoyed the beautiful view and headed to Casa Antigua for our first official local lunch. The food was great and brought us back to life. From there we took our bus to a local Palenque (place where Mezcal is made) and Coco explained the whole process of making this Oaxacan drink, and also tasted a little at the end of the tour.On our way back to Oaxaca City we stopped at Santa Maria de Tule where we saw the Tule Tree, the widest tree in the whole world. In the evening, after relaxing for about an hour, we went to the renowned restaurant Criollo (owned by the famous chef Enrique Olvera) and enjoyed a wonderful dinner in a very intimate setting.

Day 2: After a short 20 minute ride, our second day started at Monte Alban, a large pre-Columbian archaeological site. Our local guides explained the story of the ancient Zapotec culture and the latest advancements of the excavation. We were lucky and had a beautiful sunny day there. From there we head back to the city and had lunch at Azuzena Zapoteca, a restaurant owned by a couple that is renowned by their local artisan Alebrijes. After lunch Coco gave us a downtown city tour of Oaxaca were we all had time to but local Mezcal, hand crafts and coffee. Before heading to the airport we stopped by a small town called San Bartolo de Coyotepec that is known for the black clay pottery. From there we went to the airport and flew to CDMX.

Day 3: Our first day in Mexico City couldn’t have started in a better way. Francisco Andragnes, CBS alum, presented his company MetroBuildings, a multifamily developer, and told us all about his career path from CBS until now and gave an overview of the multifamily market in Mexico. We visited one of his development sites in the Polanco neighborhood and went through all the design details of various types of apartments. We had to eat a Lunch Box in the bus to be able to make on time to the next meeting due to the traffic in the city. We met with Thor Urbana, a retail-hospitality developer, where the ¨Jimmies¨ (Jimmy and Jaime, both CBS Alums) presented the company’s strategy and a few of their projects under development (one was an island in the Bahamas). The third meeting was with CBRE. Lyman Daniels, CBRE’s Director in Mexico, presenten in detail the Office, Industrial, Retail and Hospitality markets and trends.

Day 4: Early in the morning, and after a great breakfast in the hotel our bus dropped us in a luxury condo development site (almost ready) in Polanco. There, the team of Marhnos, explained all the analysis behind the project. We walked through a couple of the apartments and we wished we could own one. They were beautiful! after this meeting we met with Alexander Galewicz and Carlos Glender, both alums, and after they presented they career paths and the companies they founded we had a casual lunch where we all had the chance to ask questions and talk about how CBS helped them get to where they are. To close the day we visited the Morgan Stanley in far away neighborhood of Lomas de Santa Fe where Luis Brossier gave us a master class about FIBRAs (Mexican REITS).

Day 5: Today we visited a Tech/Real Estate (PropTech) company called Intelimetrica, which focuses their activities in Big Data and is disrupting the industry in Mexico. Mario, one of the Founders, gave an overview of their business model, strategy and their focus for the next year. After this we had time to mingle with some of Intelimetrica’s employees. Before lunch we headed to Castillo de Chapultepec for a short tour guided by our one and only Don Alfonso. For lunch we headed to Club de Industriales, a social club where real estate professionals gather. There, David O’Donnell (founder of the industrial real estate development company O’Donnell) invited us for lunch and walked us around the industrial real estate industry. To finish the day we visited the Anthropology museum, a must-see in CDMX.

Day 6: On out last company visit day we visited met with FIBRA Dahnos in one of their iconic mixed used projects called Toreo Parque Central. We walked through the mall, office space and event went up to the helipad. after we moved to the architecture office of Sordo Madeleno and we went through a couple of their iconic projects. Some of these where developed with Mexplorer, founded by Diego Baños CBS Alum, who walked us through his venture and future projects. To finish this day we had a late lunch at Entremar where we enjoyed a wonderful local meal and come “Carajillos”.

Day 7: On the last day of the trip, and to close up the intense and interesting week we visited Coyoacán and the central square of CDMX (Zócalo). In Coyoacán we went to Frida Kahlo’s house and Trotsky’s house where our guided gave us cultural context and taught us a bit more about Mexican history. We had a local lunch at La Calaca and then went to the Zócalo and walked through the Templo Mayor, city Cathedral and the government house. In the evening we had our farewell dinner in Casa Virginia. It was the BEST food of the trip and the best way to finish the week.

Valentina Pardo CBS’19