Over the last couple of months, U.S. delegations have traveled to Cuba looking for markets. They have seen pretty beaches, heard a lot of promises but found few markets or consumers. This is not your grandfather’s Cuba, or the island nation that had a prosperous economy in 1959:
- In the 1950’s Cuba was, socially and economically, a relatively advanced country, certainly by Latin American standards and, in some areas, by world standards.
- Cuba’s infant mortality rate was the best in Latin America — and the 13th lowest in the world.
- Cuba also had an excellent educational system and impressive literacy rates in the 1950’s.
- Pre-Castro Cuba ranked third in Latin America in per capita food consumption.
- Cuba ranked first in Latin America and fifth in the world in television sets per capita.
- Pre-Castro Cuba had 58 daily newspapers of differing political hues and ranked eighth in the world in number of radio stations.
Unfortunately, the Cuban economy today is a disaster, specially for the Cuban people. Who is going to buy auto parts? Or shop at retail stores? Or buy computers? Not the Cuban people on government-dictated salaries.
My friend Jason Poblete nailed it by calling it “irrational exuberance”:
Cuba is far from being an emerging economy; because of political and economic immaturity, they are more akin to an underdeveloped nation.No matter how hard the Obama administration tries to subvert U.S. law through the regulatory process, and make no mistake about it, they have been doing so,Cuba remains a frontier market that also happens to be subject to comprehensive U.S. sanctions.It is time that the Congress end their slumber on U.S.-Cuba policy and initiate a series of oversight hearings to expose the lawlessness of recent regulatory changes. U.S. taxpayers are already owed billions of dollars by the Cuba regime. Let’s not make it billions more.As I shared with the Wall Street Journal in February 2015, and believe it even more so today, certain sectors in Washington, D.C., when it comes to Cuba, are suffering from a severe case of “irrational exuberance”.Among other things, it is irrational to get excited about engaging with a police state and command economy whose total GDP is less than 1/10 or so that of the GDP of South Florida.
Where are the customers? They are not in Cuba, with the legacy of 50-plus years of communism and a total disregard for property law.
Here is the bottom line: Cuba will not be prosperous again until the Castro family lifts the embargo on freedom that they’ve had on the island. It’s a shame that the Obama administration does not see the connection between freedom and prosperity.
P.S. You can listen to my show (Canto Talk) and follow me on Twitter.
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— Silvio Canto, Jr. (@SCantojr) January 28, 2016
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