Cuba likely to open economy to small businesses first

Cuba likely to open economy to small businesses first
By David HendricksFebruary 3, 2015 Updated: February 3, 2015 6:48pm

Possible new ways to do business with Cuba were not immediately clear in
mid-December when President Barack Obama announced his administration
was opening ties to the island nation.

The new ways are being negotiated now.

Obama's decision did not remove the five-decade U.S. embargo on Cuba,
which currently limits U.S. companies to selling food and medical
products to the island nation. Only Congress can lift what remains of
the embargo, and no one seems to know when Congress might act on lifting
the embargo. Because Congress hasn't acted yet, there are limits on the
boundaries of those U.S.-Cuba negotiations.

Robert McKinley, University of Texas at San Antonio assistant vice
president for economic development, believes the negotiations first will
yield an agreement at a grass-roots entrepreneurial level, not involving
large companies.

Trade could be allowed for small businesses selling food, apparel and
cosmetics, for example, McKinley said.

It's an educated guess because McKinley traveled to Cuba last June with
a San Antonio Hispanic Chamber of Commerce delegation. The delegation
had no way of knowing the Obama administration would act a few months
later to open relations and, possibly, new avenues for business.

Cubans, of course, have little experience with entrepreneurship under
the Fidel and Raul Castro regimes. Cuba has evolved slowly from a
state-run economy to a mixed-run economy, allowing some self-employment,
since the government realizes it cannot micromanage everything.

Still, Cuban leaders understand that its people must be trained to
operate small businesses competitively with any liberalization of its
economy, especially if large U.S. companies someday set up shop on the
island.

That's why UTSA's Institute for Economic Development and its
International Trade Center might be the first entrepreneurship training
organization on Cuba. The UTSA International Trade Center has helped
establish small-business development centers, such as the one UTSA
operates for South Texas, throughout Latin America and the Caribbean,
most recently in Jamaica.

UTSA, as a partner with the U.S. State Department and the Organization
of American States, is still building on the 15-nation Small Business
Network of the Americas, which aims to increase small-business trade.

Adding Cuba to that network could be on the agenda for April's Summit of
the Americas in Panama. Cuba has been excluded from past summits but
could be invited for the first time in 2015.

"Cuba will participate for the first time, but in what form is to be
determined," McKinley said.

McKinley said San Antonio event-planning companies, especially those
that stage convention events, might have opportunities, too, as Cuba
opens to more tourists. Cuba's tourism industry now is operated by the
Cuban military, and it isn't efficient, McKinley said.

The UTSA institute is ready to help San Antonio companies explore Cuban
opportunities in that area and others, McKinley added.

Other opportunities in the small-business category could allow U.S.
companies to sell building supplies and agricultural equipment, such as
small tractors, Roger Noriega, a former U.S. ambassador to the OAS and
now a visiting fellow at the American Enterprise Institute, said during
a recent San Antonio visit.

In a related set of negotiations, also ongoing, the U.S. is talking to
Cuba about bringing the island nation into the 21st century in
telecommunications, McKinley and Noriega said. Right now, Cuba is
interested in allowing cellphones that can be used only for calls and
texts, no Internet. The Castro regime does not want Internet access for
Cubans, but the Internet is vital for international commerce, McKinley said.

The process for opening trade may be slow. But Cuba is a market of more
than 11 million people hungry for economic progress and opportunity. San
Antonio, itself dominated by small businesses, is well-positioned to
enter and guide Cuba when the time comes.


dhendricks@express-news.net

Source: Cuba likely to open economy to small businesses first - San
Antonio Express-News -
http://www.expressnews.com/business/business_columnists/david_hendricks/article/Cuba-likely-to-open-economy-at-the-small-business-6060080.php