The removal of Cuba from the U.S. state sponsors of terrorism list this week sparked a groundswell of excitement among U.S. entrepreneurs, lawyers, and investors looking to profit from the “enormous opportunities” on the island.
As part of the Florida Bar’s first-ever delegation to Havana, Cuba last week, I got the chance to see these “opportunities” for myself.
Indeed, Cuba does have lots of things to “offer”.
But they’re not what you’d expect.
The things I found most abundant in Cuba where rum, risk and ruin.
First, the rum.
Whether it’s meant to dull the senses of the locals to the island’s stark dystopian scene or to enhance the experience of the throngs of daily visitors, the abundance of rum is enough to fill Havana Bay twenty times over.
So there’s that.
Then there’s risk.
I’m not talking about the “getting mugged on a street corner” kind of risk– I always felt safe walking in Havana.
I’m talking about the “getting mugged by the Castro regime” kind of risk.
It’s all the same.
As one Florida banker put it “Capital doesn’t like to go where there’s risk….it’s not going to Iran, it’s not going to Iraq and it probably won’t go to Cuba for a while because of the risk.”
Finally, there’s the ruin.
Structural, economic and social.
All manifested in dilapidated buildings, crumbling mansions and 60 year-old Franken-cars.
I’m talking epic decay.
To this point, many sections of Havana are in such a state of deterioration that my taxi driver refused to go down some streets because there was a real danger that a building would collapse on top of us.
This is particularly true after it rains.
In short, Havana is a Sherwin-Williams’ salesman’s dream.
Imagine an entire city that’s not had a fresh coat of paint in 60 years.
With the paint company’s stock (SHW) down 5.05% to $282.21 today there’s real opportunity in Havana for Sherwin-Williams.
But it will need to wait another 20 years.
That’s how long I it will take before I’d advise anyone to do business in Cuba in the most optimistic of circumstances.
Just look at China.
I’m still wary of doing business there.
And its been 40 years since Nixon and Mao Zedong embarked on their normalization initiative.
13 Reasons You Still Shouldn’t Do Business in Cuba.
The below list is by no means exhaustive. I’ll be elaborating on each of them in the next few weeks.
- Embargo will not be lifted for foreseeable future.
- No Rule of Law.
- Lacks of Independent judiciary.
- Abysmal Human Rights Record
- Outstanding Property Claims.
- No Recognition of Property Rights.
- Lack of Infrastructure.
- No Skilled Work force.
- No Major Industries.
- Lack of Natural Resources.
- No consumer class.
- Mass Migration of Youth
- Majority Elderly population.
To be sure, catching opportunities in Cuba is not unlike the experience of Santiago in Ernest Hemingway’s The Old Man and the Sea.
In the story, Santiago struggles for days to catch a giant marlin off the coast of Havana. When he finally catches the giant fish, it is quickly devoured by sharks.
For all his efforts, an exhausted Santiago is left with only a skeletal carcass to take back to his village.
One need only replace the sharks with the Castro regime to see how the current story’s going to end.
Fish bones anyone?