I just returned from a great trip, The Oxford Club’s “Cultural Tour” of Cuba.
While we were ostensibly there to sample the amazing food, music, dance, etc., the investors on board were also interested in whether opportunities exist to put capital to work here.
The short answer is not yet. But that shouldn’t stop you from visiting this historic and beautiful island, with its classic architecture and streets full of vintage 1950s automobiles.[ad#Google Adsense 336×280-IA]From our base at the Hotel Parque Central, considered the finest hotel in Havana and perfectly located at the center of the city, we visited lavish palaces from the 1700s, the National Museum of Fine Arts, the beautiful Cuban countryside and the former home of Ernest Hemingway.
We also dined at the better restaurants, called paladares.
They’re privately owned and tend to have much better food and service than government-owned stores.
Of course, not much else in Cuba is privately owned.
Since 1959, Cuba has been governed as a socialist state by the Communist Party under the leadership of Fidel and Raúl Castro.
Although the country has been politically and economically isolated by the United States since the revolution – our embargo is the longest running in modern history – Cuba can and does trade with many third-party countries.
Yet the embargo has given the Castro brothers the opportunity to blame the country’s many economic failures on the United States.
And plenty of folks are buying it, including a few dyed-in-the-wool Socialists who spoke to our group while we were there.
Most infuriating of these was Marc Frank, a Reuters journalist and author of Cuban Revelations: Behind the Scenes in Havana.
Frank – who lives in Havana with his Cuban wife – had nary a word to say against the political and economic plight of the Cuban people.
When asked by a member of our entourage whether Cubans feel oppressed, he replied, “I don’t know, do Americans who grow up in the ghetto feel oppressed? Do those in American prisons – after all, your country has the highest incarceration rate in the world – feel oppressed?”
Here is an educated man, born in the West and living in Havana, who cannot tell the difference between the disadvantaged who live in a free society and the plight of every man, woman and child living under one of the most oppressive regimes on Earth.
In a new report, “Freedom in the World 2017,” by Freedom House, Cuba’s political freedom is ranked below Iran and China and a notch above Libya and the Gaza Strip.
In The Heritage Foundation’s 2017 Index of Economic Freedom, Cuba is ranked No. 178, just above Venezuela and North Korea and below the Republic of Congo.
Frank took another slap at the U.S. system by opining that “when capitalism arrives, people start thinking about themselves.”
It appears that even the most obvious aspects of human nature elude Mr. Frank.
People think about themselves wherever they live. The question is what are they doing about it?
Are they furthering their self-interest by building, creating and serving people… or are they cheating and stealing to get ahead?
We learned from our local guide that in Cuba it is the latter.
“When Cubans consider taking a job,” he said, “it’s not about whether you can exercise your talents or get ahead. It’s simply ‘What can I steal?’”
Virtually every “business” is owned by the Communist Party. Stealing inventory and selling it on the black market is how Cubans survive, since the average man or woman earns less than $30 a month.
Everyone knows this graft exists. Superiors simply turn a blind eye. After all, they have their own larcenous activities to pursue.
People everywhere have a fierce impulse to better their lot in life. Capitalism channels this into productive activities. The most economically successful individuals are generally the ones who effectively serve the most people.
Socialism, as the Cubans practice it, doesn’t promote this natural desire. It thwarts it.
As a result, there are precious few opportunities for investment in Cuba right now. If the country undergoes a wide-ranging economic liberalization, that could change. But I wouldn’t hold my breath.
The shame of it is that the Cuban people are warm, energetic, creative and welcoming. There is so much to love about their culture: music, the arts, dance, architecture, cuisine and, of course, baseball.
I would argue that our embargo against Cuba no longer makes any sense. Yes, the U.S. has more than $6 billion in claims against the Cuban government for the widespread theft that occurred when businesses and properties were nationalized following the revolution.
But we manage to trade with plenty of other morally suspect nations, not least of all autocratic Saudi Arabia and Communist China.
There may come a day when enterprising Americans can invest in Cuba.
But that day is not here yet.
Source: Investment U