Wednesday, December 31, 2014

Cuba’s Frustrated Engineers Hold Key to Fast-Track GDP Growth

Cuba's Frustrated Engineers Hold Key to Fast-Track GDP Growth
By Anatoly Kurmanaev, Eric Martin and Sabrina Valle

Alfonso Morre has spent nine years studying mechanics and civil
engineering in order to become -- a Havana taxi driver. Following
President Barack Obama's decision to ease the embargo on Cuba, he is
hoping for something better.

Driving a 26-year-old Russian-made Lada through the cobbled streets of
Cuba's capital, Morre says he needs his engineering degree just to keep
the car on the road. That may be about to change.

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"Hopefully, once the U.S. trade opens up, companies will come here
looking for engineers," Morre, 33, said. "Once the new cars and spare
parts start coming in, you won't need to be an engineer to run a taxi here."

Morre is one of the army of university-educated Cubans stuck in manual
jobs such as hotel laundry or waitering. Their skills will be a big draw
for companies looking for investment opportunities in the island should
the U.S. agree to end the trade embargo that started in 1961, said
Philip Brenner, a professor of international relations at American
University in Washington.

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"The Cuban development model is going to be based on high value-added
production by an educated population," Brenner said. "No one in Cuba is
talking about a future scenario of making baseballs in sweatshops. They
have people who would be adept in pharmaceuticals, computer engineering
and advanced mechanical machinery."

Cuba's economic growth has slowed to 1.3 percent this year, almost half
the official target and down from 2.7 percent in 2013, according to
government data.

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Pajama Factory
Obama and Cuban President Raul Castro announced the plans to
re-establish diplomatic ties, release some prisoners and work to ease a
five-decade old embargo on Dec. 17.

Laundry lady Lucila Gomez, 62, hopes the move will lead to the
re-opening of the pajama factory she used to supervise in Havana. After
getting a degree at Moscow State Textile University and working in
Bulgaria, Gomez now irons tourist shirts in the Havana Libre hotel.

"Hopefully I won't have to end my career doing laundry," she said.

Decades of Soviet investment in Cuba's education system have brought
universal literacy to the island, with about 100,000 people trained at
Russian and Ukrainian universities out of a population of 11.3 million.

Eighty percent of college-aged Cubans were enrolled in post-secondary
education in 2011, the highest in Latin America and the Caribbean,
compared with 75 percent in Argentina, 71 percent in Chile and 29
percent for Mexico, according to the United Nations.

Staying Afloat
There is a special focus on hard sciences like medicine and engineering,
an investment in human capital that has helped the country stay afloat
since the end of subsidies from the Soviet Union. About 30,000 Cuban
doctors work in Venezuela to help pay for the approximately 100,000
barrels a day of oil the South American country supplied to Cuba in 2013.

In the central province of Cienfuegos, Brazilian contractor Helio Piza
is supervising 60 Cuban workers running a 30-year-old sugar plant
without any spare parts.

"The level of academic preparation here is very high," Piza said in an
interview in his office in the Fifth of September plant on Dec. 29.
"Education allows Cubans to be ingenious with the little they have

In the rusty plant, dust covered workers were welding together hand-made
metal parts of sugar cane grinders on a December afternoon.

Better Prepared
Alexandre Carpenter, co-president of cigarette and cigar-maker Brascuba
SA, has a similar impression to Piza. On the factory floor, a quarter of
the Cubans have a college degree, while for the company as a whole the
figure is 46 percent, Carpenter said by phone from Brazil.

Brascuba, a joint venture between Rio de Janeiro-based Souza Cruz SA and
Tabacuba, employs 500 people on the island, of which 492 are Cubans.

"The Cuban workforce is a key point for investment in the country,"
Carpenter said. "When you're installing a new machine, for example, you
have high-level discussions with the engineers. They are much more
prepared than the average Brazilian worker."

Sugar plant manager Piza said the challenge is to attract younger
workers prepared to work on state salaries of about $20 a month and to
train them to work with modern technology and profit-making mentality.

"It's difficult to motivate workers to be productive on the kind of
money we can offer," he said.

Better Off
Cuban migrants into the U.S. have benefited from their higher
educational levels.

Cuban-born residents earn 20 percent more on average than the Hispanic
population overall and are more likely to own their home, according to
2011 census data cited by the Washington-based Pew Research Center.
About two million Hispanics of Cuban origin live in the U.S., with 70
percent in Florida.

Jodi Bond, vice president for the Americas at the U.S. Chamber of
Commerce, said U.S. companies are likely to step up lobbying for
Congress to end the embargo on Cuba, opening the door to investment.

"They will actively work to lift the embargo," Bond said in a telephone
interview from Washington. "There's potential for explosive growth,
opportunities for engineers and collaboration in the health, technology
and telecommunications industries. Much of that may move slowly, but the
companies see a lot of promise."

Source: Cuba's Frustrated Engineers Hold Key to Fast-Track GDP Growth -
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