Tuesday, February 23, 2016

Why are We Afraid of Cuba?

Why are We Afraid of Cuba?
02/22/2016 01:26 pm ET
Dr. Jonathan Doh

Jonathan Doh is the faculty Director of the Center for Global Leadership
& Rammrath Chair in International Business at Villanova University.

Cuba is at a crossroads. Yet it seems some in the United States are
hesitant to take the next step, fearful of what could happen if we
actively engage and participate in what will undoubtedly be a profound
transition. Some of this hesitation appears to emanate from fear. In my
view, this fear is wholly unfounded. On the contrary, Cuba poses no
threat to the United States, but may provide opportunity, with great
potential for commercial interactions, educational exchange, and broader
social integration between our two countries.

I recently returned from a trip to Cuba as part of a Villanova
University delegation of faculty, administrators and alumnae who
traveled to the island nation to learn more about its political,
economic and social conditions and to explore future opportunities.
Given that we represented a Catholic University, we also met with
various religious organizations, including Caritas, the Catholic
charity, to support their efforts.

What struck me most was the poor condition of the economy, the public
and private infrastructure, and of the political institutions that are
presumably responsible for ensuring the health and wealth of the society.

While Cuba boasts the highest literacy rates in Latin America and a
functional health care system that provides access to all, the overall
condition of the economy is bordering on crisis. The bloated bureaucracy
has been forced to lay off more than a million Cubans who are then left
to fend for themselves in the extremely underdeveloped private sector.
The nicest hotels have intermittent electricity and often poorly
functioning water and sanitation systems. Internet and
telecommunications more broadly is limited and uneven. Several - many
historic - buildings are lost to the elements every day. Every day!
While Cubans are extremely enterprising and resilient, the system itself
is not serving them well. This is something we all can agree on.

So, what's the solution? The policies of the past 50+ years have clearly
not worked for Cuba, for the United States, nor for the relationship
between the two. Indeed, Cubans are fleeing in droves, creating
disruptions throughout the Americas. In listening to the current
political discourse, one gets the impression that the U.S. has something
to fear from opening up our relationship with Cuba.

Should we fear a bankrupt country with few remaining natural resources
that has been isolated from modern economic influences? In fact, sadly,
Cuba's main exports are services - tourism in Cuba and doctors and other
health care workers loaned to other countries for a fee. Should we fear
a flood of sugar imports if trade were liberalized when Cuba's
productivity in sugar production is one of the lowest in the world?
Should we fear the government of Raul Castro who, by his own admission,
is predicting another year of poor economic performance? Should we fear
that others will somehow be inspired by the failed communist system in
which one of Cuba's few close allies in the Hemisphere - Venezuela -
appears to be moving away from the national socialism that has wreaked
havoc on its economic fortunes, perhaps irreparably and will likely
curtail the subsidized energy that has kept Cuba afloat over the past
decade? Hardly.

Instead, why not welcome the opportunity to engage, interact, and
influence? Our business leaders are eager to explore opportunities and
support Cuba's redevelopment. Although tourism is exploding on the
Island, the infrastructure to support it is buckling under the weight of
rapidly increasing arrivals, especially from Europe and Canada, but also
from the U.S. since normalization of relations last year.

During our visit, delays at the airport were extensive, and as we
learned, quite common. Hotels are sub-par and require significant
upgrading in addition to the simple math of the need for more rooms and

As Cuba liberalizes its foreign exchange policies (currently, there are
two currencies - one for use in the domestic economy and one for
tourists) there is growing need for financial services, including credit
and debit cards, electronic payments, savings instruments and mortgages,
the latter of which will be in increasing demand as Cuba opens up the
potential for foreigners to purchase property. And in my industry -
education - there is room for collaboration, especially as the
government slowly liberalizes the industries and professions that may
engage in private commerce requiring training in business, law and other

But we should not engage with Cuba solely for commercial ends. There is
a compelling humanitarian case for interaction. For better or worse, the
United States was partly responsible for the circumstances that led the
Revolution of the 1950s and ushered in the period that followed. We also
bear some responsibility for the harsh economic conditions Cuba faces
today that result from the embargo which, until recently, became
increasingly stringent over the past five decades.

As an educator, I welcome the opportunity for our students to learn
about the past, the conditions that have led to the situation Cuba faces
today, but mostly I am excited about their opportunity to help shape
Cuba's future.

Dr. Jonathan Doh is Faculty Director of the Center for Global Leadership
and Rammrath Chair in International Business at Villanova University. He
was previously Director of NAFTA Affairs the U.S. Commerce Department
and Advisor to Deloitte's Global Energy Resource Group.

Source: Why are We Afraid of Cuba? -

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