A Cuban-American Perspective

Change in Cuba

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Perception is Reality• Centrally Planned Economy: Cuba – North Korea – Iran• Cuba's past dealings with foreign investors suggest caution• "Use the foreigners where it suits you. Spit them out as soon as their usefulness is over,“• Cuba has closed more joint ventures than it has opened since adopted wide-ranging economic reforms in 2011• Government partners defrauded him by keeping two sets of books, then offered a ridiculously low sum for his stake• "Starting a joint venture in Cuba for a small or medium-sized foreign business is the same as putting a noose• around your neck,"

The Uncertainty Principle • The communist government sometimes lets investment proposals die on the shelf without explanation• Experts say Cuba's approach to foreign business has been arbitrary• Who is in charge of what• Who is or will be your competition• Existence/reliability of infrastructure

“The World is Flat”

• Economies are Global• Countries compete for investments• Investors follow Risk/Reward, Certainty -Stability, State of the art Infrastructure, favorable Labor Pool• Logistics/Technology/Comms.

He credits the creation of complementary software and the internet, and political factors that causedseveral developing countries, including China, Russia, India and Latin America, to open their borders at this time with the creation of the perfect storm that led to the rapid-fire pace of globalization.

Collapse of Berlin Wall--11/89: The event not only symbolized the end of the Cold war, it allowed people from other side of the wall to join the economic mainstream. (11/09/1989)

Who is in Charge here • Freedom to operate within the regulations• Foreign companies will be barred from hiring their own workers, and instead must go through Cuban employment

agencies as they do now.• "The problem with the new law is that except for taxes, little has changed, which means their attitude hasn't changed,“ said one European diplomat who declined to be identified. "In the end, the entire law remains discretionary."• Experts say Cuba's approach to foreign business has been arbitrary. If a venture is successful, the government often

wants a bigger stake. It welcomes foreign financing, once a project is operational it wants to take charge, they say.

• A history that includes jailing foreign executives and attempting to seize greater control of businesses once they prove successful.• But Murillo's remarks suggested the government intends to continue in at least a watchdog role "so that there is

no concentration of property." "What the new law establishes is that the state must always be there," he said.

Success Breeds Success • Use the most efficient way to create examples of Successful Ventures• "Cuba will not go looking for foreign investment in Miami. The law doesn't prohibit it, the policy does not promote it"

Foreign Trade and Foreign Investment Minister Rodrigo Malmierca said Friday

Necessary but not Sufficient • Differentiate Policy from politics• Tax & Regulate – Do not compete/participate• Consistency & Fairness• Business ethics- Work Ethics – Culture of commitment - Trust• Corruption - Crony Capitalism• Incentivizm – Allow Growth• Infrastructure / Logistics / Technology/Comms.• Management People - Training - outside expertise

• The indispensable action………………………..