Cuba: Past, Present and Future

This article, from Wharton Business School at the University of Pennsylvania, highlights the comments made at the Cuba Opportunity Summit, held on April 1, 2015.

Cuba is a country ripe for foreign investments, but U.S. businesses must be patient with what may seem like a slow pace of change in the island nation, experts said at a recent Cuba Opportunity Summit held at the Nasdaq MarketSite in New York. But for companies that take a longer-term view and invest with realistic expectations, Cuba offers a potential windfall as one of the last untapped emerging markets in the world.

With Cuba poised to open up to U.S. investment, it may be tempting for companies to jump in without testing the water.

But first-mover advantage will not guarantee success —in fact, according to a group of risk management experts who spoke at the recent Cuba Opportunity Summit, it could lead to disaster if firms do not have strong compliance programs in place.

According to Hirmas, the new generation of entrepreneurs emerging in Cuba owes a debt of gratitude to Cuban artists who pioneered economic self-determination in the country. “I think it’s the same lesson that we see in Latin America and really the world at large — that true entrepreneurship, even with restricted resources, can do wonders, because it is about human spirit Twitter . It is about will, and to me it’s about inspiration…

The opening of the Cuban technology, media and telecommunications sectors to U.S. investment could benefit baseball, pre-paid cell phones and Shark Week — among others.

In addition to waiting for certain freedoms and flexibility that would come if the U.S. abandoned its trade embargo for Cuba, companies are waiting to see if Cuba will be able to build up its infrastructure, create workable regulations around issues such as intellectual property and deal with challenges like allocating the wireless spectrum.

The likelihood of the U.S. lifting its 54-year-old trade and investment embargo on Cuba is proving a catalyst in boosting entrepreneurship in the island nation. Cuba under Raul Castro has in recent years steadily opened up the economy and removed many business barriers. President Barack Obama’s announcement last December of his administration’s intentions to normalize ties between the two nations appears to have infused fresh energy into that economic liberalization process.

American businesses eying Cuba could certainly expect manifold opportunities with President Barack Obama’s announcement last December that the U.S. is normalizing relations with the Caribbean island country. All eyes are now on whether the 54-year-old U.S. trade and investment embargo against Cuba will be lifted. But even if the sanctions go away, U.S. businesses will have to earn their place as they compete with Cuba’s existing business firmament and relationships, thanks to its friendly relations with numerous other countries, according to Mark Entwistle, former Canadian ambassador to Cuba and founding partner of Toronto-based boutique merchant bank Acasta Capital.