Ó n orts i R vovv r

Bloomberg Businessweek (North America) - - Opening Remarks -

The U. S. pres­i­dent’s mis­sion to Cuba, which has spun it­self into a hur­ri­cane of diplo­matic and cul­tural ex­pec­ta­tions, is due ashore on March 21. Barack and Michelle Obama will tour Old Ha­vana’s cob­ble­stone al­leys, meet with rev­o­lu­tion­ar­ies and anti-rev­o­lu­tion­ar­ies, and pos­si­bly go as far as shak­ing the hand of an an­cient, trem­bling, and all-pow­er­ful king.

That would be Mick Jag­ger, who is sched­uled to per­form at an out­door con­cert with the band known as Los Rolling in the of­fi­cial Cuban me­dia. Half a mil­lion fans are ex­pected. The first Amer­i­can pres­i­den­tial visit to Cuba in 80 years will also in­clude nine in­nings of base­ball diplo­macy, as the Tampa Bay Rays play the Cuban na­tional team in the first ex­hi­bi­tion game in 16 years.

For the U.S., the trade and eco­nomic ben­e­fits of Obama’s at­tempt to nor­mal­ize re­la­tions with the is­land are ob­vi­ous: Cuba was once a ma­jor im­porter of Amer­i­can farm and in­dus­trial prod­ucts, linked to the economies of New Or­leans and Tampa by ferry, and flooded with state-of-the-art Buick Straight Eights, circa 1952. Obama has carved out ex­cep­tions to the 55-year em­bargo—in­clud­ing, on March 15, al­low­ing U. S. cit­i­zens to visit Cuba in­di­vid­u­ally, in­stead of in groups, and giv­ing Cuba ac­cess to the in­ter­na­tional bank­ing sys­tem. But only Congress can lift the

e whole thing.

Raúl Cas­tro, o, 84, now the is­land’s pres­i­dent and more prag­mat­icpragm at­i­catic tha than his re­tired brother Fidél, 89, r rec­og­nizesec­og­nizes thatth Cuba must cre­ateate ate mil­lion­ss­mil­lion of jobs for its restive young peo­ple andnd can’t affff af­ford fford to pay for that it­self. He’ll prob­a­bly­bablly ask Obama for bil­lions of dol­lars in in­vestvest est- ment and an end to the em­bargo.

De­spite the hoopla, lit­tle has hap­pened to ex­pand com­merce since Dec. 17, 2014, when Obama an­nounced that the U. S. was reestab­lish­ingg tiesies with Cuba. The road ahead will test how in­tran­si­gent Cuba’s mo­nop­oly oly state en­ter­prises are in the face of change. (The Min­istry of La­bor still keeps an of­fi­cial list of who’s al­lowed to workrk as a birth­day clown.) In­er­tia and so­cial­ist cial­ist doc­trine con­tinue to sup­port a closed econ­omy. The en­tire point of the Cuban Rev­o­lu­tion was to keep Amer­ica out. Piv­ot­ing the is­land from cen­tral plan­ning and state mo­nop­o­lies to an open­pen econ­omy en­gaged with the U. S. won’t on’t be easy.

When Obama re­vealed his se­cre­tret ne­go­ti­a­tions, he said that “in­creased com­merce is good for Amer­i­cans and for Cubans” and specif­i­cally urged tele­com com­pa­nies “to sell goods that en­able Cubans to com­mu­ni­cate with the United States and other coun­tries.” The White House cited tourism, ship­ping, and app de­vel­op­ment as ar­eas where U.S. com­pa­nies were now free to seek deals.

There have been more than 500 trade mis­sions in the sub­se­quent 15 months, with lit­tle to show for the ef­fort. “There are no suc­cess sto­ries,” says John Kavulich of the U. S.- Cuba Trade and Eco­nomic Coun­cil, a non­par­ti­san busi­ness-fo­cused non­profit in New York. One U.S. com­pany—two men from Alabama—did sign a deal to assem­ble at the port of Mariel small trac­tors spe­cially de­signed for Cuban co­op­er­a­tive farm­ers.

Cuba is play­ing the field, ne­go­ti­at­ing with Amer­i­can tele­com ex­ec­u­tives on a trade visit, then buy­ing the equip­ment cheaply from China. Cuba asked for bids from U. S. com­pa­nies on rewiring the tourist-cen­tric zone of Old Ha­vana. It then hired a Chi­nese com­pany. And it’s not just China, al­ready a trade part­ner, that Ha­vana has turned to. When U.S. tourism com­pa­nies came call­ing, the Euro­pean Union of­fered hun­dreds of mil­lions of dol­lars in debt re­lief in ex­change for re­new­ing its deals run­ning lo­cal re­sorts.

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