McDonald’s Coming To Havana?
Recently, the relationship between Cuba and the United States seems to be thawing. America’s President Obama signaled that he wanted to see the end of the embargo against Cuba and hoped to open Cuba up to America products and culture as a way of reforming the government. With this news, many people in Cuba rejoiced. For Americans, there has been a sudden interest in tourism to Cuba and I often get asked about how Cuba will be changing in the future.
One of the first thing that many foreigners mention is that Cuba will start to change very rapidly now. Most people expect that in a few years, there will be McDonald’s franchises in Havana and Starbucks Mocha Lattes will be readily available throughout the island. American celebrities have been flocking to Havana, taking selfies in front of national and historic landmarks. It seems to many that Cuba and the USA are new best friends, just itching to catch up on old economic ties.
Cuba Will Never Become An American Outpost
In my opinion, despite some thawing in Cuban/American relations, there are actually not so many major changes that will come from the recent developments. Most of the economic speculation and projections seem to be coming from people who are misinformed or have no idea at all what they are talking about.
The fact remains that Cuba is, and will continue to be, a communist/socialist society. The country has very little foreign reserves and almost no access to the debt markets. Basically, even though it might soon be possible for the country to buy American made products, they still will not have the money to actually purchase considerably more than they have been buying.
A quick look at the economy of Venezuela, another socialist society, will clearly show that there is a very fine line between prosperity and poverty in a society which does not play ball and get on the capitalist bandwagon. Even though Venezuela is technically a very rich country, with massive oil reserves, it is still relatively poor and shortages of staple goods are common.
Cuba does not have this kind of problem, but, that is only because it is a smaller and better managed economy, which has adhered more strictly to the communist economic model. Although Cuba will never be a wealthy country, relatively speaking, it will have no problem maintaining its current economic level.
Furthermore, American is not even a major producer anymore, to the extent where Cuba would be deprived of anything if they could not purchase it from the USA. China is one of Cuba’s largest trading partners and the largest good producer in the world. In the past, Cuba was able to buy good from China at reasonable prices. It will continue doing that in the future. There is nothing that would necessarily have been cheaper to buy from the USA versus China. In this respect, dropping the embargo will not have a material effect on trade with Cuba.
American Business in Cuba
Recently, businessmen have been arguing that with the embargo soon to be dropped, they will suddenly be able to start businesses in Cuba and “open it up.” Presumably they mean they will be able to sell building products, food, open restaurants, bars and hotels on the island. Capitalize on the Cuban people and their need and desire for American products and services. It sounds good, but, it is mostly a fantasy.
You see, while America had an embargo on Cuba for the last 55 years, the rest of the world did not. Canada, for example, was a great trading partner to Cuba. But, you don’t see any Canadian Tim Horton’s restaurants in Cuba… Or any Quebec maple syrup sold in Havana markets. You don’t see almost any foreign goods sold in Cuba.
Why has no other country been able to exploit the Cuban market? Nobody has stepped into America’s place in the last 55 years? The reason is simple, Cuba has not allowed it. Cuba wants to remain Cuban.
Flashback to the Time Before The Revolution
Before the revolution, America basically owned Cuba. In fact, the country was almost annexed as a part of the USA. In 1926, U.S companies owned 60% of the Cuban sugar industry and rural land. Poverty in Cuba was out of control. Education and medical care was almost non existent. The country was run by a puppet American government and the people were being exploited.
The scars from this time are still present. The current generation of Cubans have a favorable view of Americans, but they will never open up their country to foreign ownership again. For the present and future, Cuba will remain Cuban owned. There will be no repatriations of seized property, this is absolutely certain.
Going Forward
I think it’s good that the embargo ends, simply because it was completely useless and there is no point in having an economic embargo against Cuba, since they are clearly not a threat to any nation. But, fundamentally, despite some superficial changes, the end of the embargo will have a limited impact on the average Cuban way of life. And this is not necessarily a bad thing. I think some reforms in Cuba are necessary, but overall I consider it to be a well developed society with a strong, independent culture. I hope it remains that way and despite not being economically wealthy, Cubans are certainly a rich people. I hope that never changes.
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