Final Thoughts on GIP Cuba

It has been a week since our class returned from Cuba. Back to the world of cell phone connectivity, credit card machines, and long lines at Starbucks. While I can’t say that I miss being disconnected from the world, I can say that I thoroughly enjoyed my one week of limited connectivity! It certainly gave me the opportunity to immerse myself in the program, and to fully experience the Cuban culture, people, and business environment.

I have spent quite a bit of time reflecting on our experience there, and I have been sharing my thoughts with others who have asked about my trip. Talking about Cuba with people who have never been there has forced me to collect my thoughts, and to attempt to articulate what it is like to live, work, and conduct business in Cuba.

The short answer: it’s not easy. Although Raul Castro has committed to many, important reforms, Cuba still has an incredibly long way to go before it will be able to attract regular, meaningful foreign investment. Infrastructure, support systems, and a skilled, domestic labor force will be required to entice other countries to come to Cuba and do business. These initiatives will require cohesive, transparent efforts on the part of the government, and partners who are willing to roll up their sleeves and invest in Cuba’s future success.

Private enterprise also has a long way to go. The number of private businesses is growing, and these businesses are creating jobs, fostering innovation, and increasing consumption. But more must be done! Cubans must be incentivized – and enabled – to establish private businesses that will positively impact the society and economy.

In short, Cuba needs an infusion of public support (from the government) and private enterprise to propel it to the next level. All of the resources are there – incredibly strategic trading location, powerful domestic industries such as alcohol and sugar, and the passion and drive of a younger generation. Cuba’s task will be to set conditions for future success, and to provide the current generation with the tools to succeed in the future.

I cannot close this series of blog posts without commenting on the state of US-Cuba relations. While there are countless factors to consider, I would submit the following, general opinions:

1. Current US-Cuba trade and political relations are (mostly) based on events that took place more than 50 and should most definitely be revisited and reconsidered.

2. Cuba must be prepared to make concessions, if it wants to bring the US to the negotiating table. The Cuban government has much to gain from the restoration of diplomatic and trade ties; sacrifices may have to be made in the short term, to secure long term gains.

3.  Cuba’s current status as a “State Sponsor of Terror” will continue to effect US-Cuba relations. Recent alignment with authoritarian regimes (North Korea, Russia) will continue to have negative impacts on the restoration of diplomatic and trade ties. Cuba would be wise to avoid such partnerships.

I could go on, but will stop there. I look forward to watching Cuba’s progress over the years to come, and hope to pay another visit to Havana at some point in the future.

Katie Horgan ‘14

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

Havana: A Trip Back in Time

(Due to the lack of internet connectivity in Havana, this blog post is back-dated to Tuesday, March 18th)

I left my hotel in Miami at 8:30 am on Saturday, and did not arrive at the Hotel Nacional de Cuba until 9:30 pm that night!  13 hours of travel time to reach a destination that is only 80 miles from the southern coast of Florida.  Absolutely amazing (ok, a little frustrating) and an incredible insight in to the red tape and inefficiencies that stem from the lack of US-Cuba diplomatic relations.

The first half of our trip has added much color to the opinions that were shared by our guest speakers, and to the image of Cuba that is presented by the press.  It is clear that Havana was once a beautiful, bustling city that offered a rich, cultural experience to residents and visitors.  Ernest Hemingway penned two famous novels here – while enjoying mojitos and daiquiris – and Havana saw an influx of American visitors during the era of Prohibition.  While the city maintains its rich, cultural heritage, it is immediately obvious that the country has stalled, economically.

A tour of the city and outlying areas reveals dilapidated buildings (the historic district experiences 4 major collapses, per week), the absence of internationally recognizable brands (Starbucks, major banks, Coke), and crumbling roads.  More than half of the cars on the road date back to pre-1960, credit cards are not accepted, and the country operates under a confusing, dual-currency system.  Cuba is in desperate need of direct and foreign investment, and the government has recently begun to institute reforms that are intended to improve economic and social conditions.  Public figures and private citizens, alike, point to the US embargo as the one of the key impediments to future growth.

Highlights from the trip include a lecture on the state of US-Cuba relations, a visit to a privately owned spa, and “Vice Day”.

On Monday, Professor Luis Rene Fernandez Tablo offered his views on the challenges that are posed by the US embargo, and his hopes for the restoration of diplomatic relations between the two countries.  By his estimates, the US Embargo has caused economic damages of more than $1 trillion USD; the Cuban government recognizes that restoration of diplomatic relations are crucial to moving the country forward and all lecturers expressed hope that a solution can be found in the near future.  While I enjoyed listening to the Cuban perspective, I found it disappointing that the focus seemed to be on what the US needs to change, with little discussion of the concessions that Cuba can (and should) make to bring the two countries to the negotiating table.

Later that afternoon, our class had the opportunity to talk with the owners of O2SPA, which is a privately owned spa and fitness company.  The three sisters spoke frankly about the challenges of financing, establishing, and running a business in Cuba, and offered a tour of their facilities.  The spa also offers dance lessons, and the Class of 2014 wasted no time in showing off their two left feet.

Tuesday (officially referred to as “Vice Day”) brought tours of the Habanas Cigar Factory in Havana and the Havana Club Rum Factory in San Jose.

Habanas manufactures several different cigar brands, and takes pride in their process.  A tour of their factory revealed workers who apply years of expertise to the formation of hand-rolled cigars, and the careful application of quality control measures.  Everyone left the tour with a greater appreciation for the art of cigar making, and with a pocket full of cigars that were later enjoyed in the company of the famous Cuban mojito.

“Vice Day” continued with a trip to the Habana Club Rum Factory, where we met with the rum maestro who oversees production at the San Jose factory.  He ended his overview of the production process with an offer to taste the various Habana Club rums and the quote: “A rum master is like the pope…only closer to God”.  Habana Club has the third largest market share of all rum manufacturers, and an incredibly complex and creative marketing strategy.

The trip has been fascinating, thus far, and I am looking forward to seeing what the rest of the program holds!

Countdown to Cuba

Global Immersion Cuba begins in less than 24 hours!  Our first test will be to get in to the country: we are armed with paper plane tickets, education visas, and the knowledge that we have exactly 44 lbs of luggage allowance.  Here’s hoping that our travels go smoothly…

The majority of us have never been to Cuba, and are not entirely sure what to expect – which is part of what makes this trip so exciting!  Over the past six weeks, our class has been visited by academics, political activists, and businessmen who have imparted a depth of knowledge about the Cuban economy, society, and political atmosphere.  They described the Cuba of the past – a country which saw great success in the 1950s, and then slowly deteriorated under the iron fist of Fidel Castro.  And they described present-day Cuba: the reforms being implemented by Raul Castro, the rise of self-employment and private enterprise, the fierce patriotism of the older generation, and the diplomatic battles that are being fought as Cuba transitions and seeks a new, improved position in the international order.

Cubans – and their advocates – hold much hope for the future of their country.  Raul Castro has begun to implement reforms that are intended to fix the basic structure of the Cuban economy and provide Cubans with more opportunities than ever before.  These reforms are an investment in the country’s future, and our class will be able to witness their impact, firsthand.

We will spend 7 days in Havana, meeting with Cuban political leaders, businessmen, and members of the military.  Personally, I cannot wait to explore the country, and to experience a country that is at such an important point of transition.

Also, can’t wait to test out the rum 🙂

Final Thoughts on GIP Tunisia

One week ago, GIP Tunisia students landed, safely, back in snowy NYC.  For many of us, this was the end of the road, after weeks and weeks of international travel.  Our week in Tunisia was quick, fast and in a hurry, and many of us are only now starting to digest what we learned.  A few, quick takeaways from the perspective of this blogger, that I want to remember from my time in Tunisia:

1.  Tunisia is transitioning to a democracy, and is well positioned to be highly successful in the coming years.  The government passed a new Constitution on January 24th, which – legally – puts the democratic transition in to motion.  Tunisians endured decades of autocratic rule under their previous leadership, and they are EXCITED about the prospect of free markets, improving economic conditions, and exposure to international investment.  The next few years will be critical; the Tunisian government must remain stable, and must create the conditions for domestic economic improvement and continued international investment.

2.  Tunisia needs international investment, and the support of the international community.  It is poised to be the first Muslim-majority, democratic country in the world.  This is worth supporting!  It’s neighbors (Algeria, Egypt, etc) could benefit from the positive influence of a stable, democratic country in the North African region.

3.  Freedom of speech and freedom of the press in Tunisia definitely have room for improvement.  Under the old regime, Tunisian’s were afraid to speak out against the government, or to suggest that things in the country could be improved.  Now that these restrictions have been lifted, Tunisian’s must be encouraged to comment on current events, suggest improvements, and hold their leaders accountable.  This will have positive economic, social, and political benefits that will help to move the country forward.

I could write a lot more about our trip, and about the lessons that we learned.  But I also know that keeping these blogs to three points makes them much more digestible, and increases the likelihood that readers will…READ!

So I will close there, and say that I am grateful for my experience in Tunisia, and for the excellent programming organized by Professor Jedidi.  I’m hooked on GIP, and will be taking another course this spring.

Thanks for reading!

Katie Horgan ’14

Tunisia in Pictures

Meeting with the CEO and CMO of Tunisiana, the top mobile provider in Tunisia.
Meeting with the CEO and CMO of Tunisiana, the top mobile provider in Tunisia.
The Tunisian coastline.  Beautiful, but a little windy!
The Tunisian coastline. Beautiful, but a little windy!
Listening to a panel at the Tunisian American Chamber of Commerce
Listening to a panel at the Tunisian American Chamber of Commerce
Group picture with the head of the Republican Party
Group picture with the head of the Republican Party
President of the Republican Party
President of the Republican Party
Douglas Kurdziel '14, Tyler Bolender '14 and Jackie Martinez '14 inspect the line at the Coke bottling plant
Douglas Kurdziel ’14, Tyler Bolender ’14 and Jackie Martinez ’14 inspect the line at the Coke bottling plant
Coke - Tunisian style
Coke – Tunisian style
Watching the Fanta bottles file through!
Watching the Fanta bottles file through!

COFAT board pic

Architecture at the Tunisian coast
Architecture at the Tunisian coast
Tyler Bolender '14 takes a turn in the flight simulator
Tyler Bolender ’14 takes a turn in the flight simulator
Factory tour at COFAT
Factory tour at COFAT

CBS Heads to Tunisia!

Anxiously awaiting my flight to Tunisia (which leaves at 3:45 am!), where I will meet 27 of my CBS classmates for the week-long culmination of the class “Global Immersion: Doing Business in North Africa”.  We will spend 7 days in Tunis, which is the capital and the largest city in Tunisia.

When I was selecting my classes for the Fall 2013 semester, the course description for GIP Tunisia immediately caught my attention. Africa is home to many of the fastest growing, emerging markets in our world, a fact which most certainly merits the attention of business school students.  Tunisia is a fascinating case, in particular, because it boasts a unique blend of global, economic influences, and is poised to recapture political stability/economic growth, which will boost competitiveness and encourage foreign investment.  I jumped at the opportunity to study this country, up close, and to witness the social and economic changes that are currently taking place.  It is an exciting time for Tunisia, and I feel that we have a lot to learn from this trip!

My classmates and I spent the fall semester learning about the Tunisian culture, economy, and political situation, with particular emphasis on the changes brought about by the popular uprising in 2011.  Professor Jedidi arranged for a fascinating mix of guest speakers, who provided color – and context – to our readings and case studies.  Working in teams, we chose Tunisian companies that we wanted to know more about, and we will spend our week in Tunis researching these companies and completing our final projects.

Our itinerary includes meetings with top Tunisian economic, business and political leaders, as well as visits to a wide range of Tunisian companies and NGOs.  Just to name a few: African Development Bank, enda inter-arabe, Carrefour and Tunisiana.  The itinerary also allows plenty of time to experience the vibe and culture of this historic city, which will provide important context for our research and discussions!

I am looking forward to an exciting week that will broaden my understanding of the Tunisian culture and economy, and I cannot wait to  share this experience with CBS friends and colleagues.  See you soon, Tunis!