Economic Development and Government

Is trade with Cuba worth it?

Probably not, says Carlos Hidalgo, who left Cuba because of the communist takeover.

December 26, 2014
| By Pete Daly |
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(As seen on WZZM TV 13) A Grand Rapids business owner who fled his native Cuba in 1960 says he has his doubts about the Obama administration’s announced plan to restore diplomatic ties with the small island nation just 90 miles from Florida.

“No one wants this more than I to succeed. But I have great doubts,” said Carlos Hidalgo, who was 15 when he left his family behind and made his way to the United States. He said he left because of the repressive government Fidel Castro put in control of the country.

Hidalgo is an owner of Hidalgo & DeVries, a strategic marketing and research firm with offices at 560 Fifth St. NW, Grand Rapids.

According to a report in the Washington Post, a large majority of Americans favor establishment of diplomatic ties with Cuba, and even more would like to see an end to trade and travel bans to Cuba.

But Hidalgo, who visited Cuba in 2004, said his father would say, “Sleep with your eyes open,” if you live in a communist country.

As to U.S. businesses being allowed to set up shop in Cuba, Hidalgo said his advice to them is to “walk in there with your eyes wide open because (the communists in power) have fooled a lot of people.”

Hidalgo cites what he calls many facts about the corruption of the Castro regime. He said Cubans living in the United States send about $2.7 billion a year to their relatives living in Cuba because the country is so poor. But Hidalgo added that all money coming into Cuba must pass through the Castro government first, and “the government takes 25 percent” of it.

Hotel chains that build hotels on the south coast of Cuba — a major resort area for Europeans and Canadians — must pay the hotel employees’ wages in euros to the government, which then pays those employees in Cuban pesos, which are worth far less than euros or dollars.

The Washington Post/ABC News poll also found that 68 percent of Americans support ending the U.S. trade embargo with Cuba, but Hidalgo plays down the current impact of the embargo, which was put in place by the U.S. about 60 years ago in an attempt to stifle the Castro government.

Hidalgo notes there is no embargo on food or medicines from the U.S. to Cuba. He also said no other country has an embargo on trade with Cuba; thus, the Cubans can buy any consumer goods made in the world’s other major industrial countries. However, most Cuban people cannot afford many of the consumer goods that are virtually a given in most U.S. households.

Hidalgo says Raul Castro wants to normalize relations with the United States because Cuba has long relied on just two nations for aid: Russia and Venezuela, and “both countries are cratering” economically and unable to continue that aid.

More recently, young people in Cuba have begun demonstrating on the streets “for the first time ever,” he said, objecting to the dismal economy and repression under which two generations have lived with the Castros in charge. Hidalgo figures the Cuban government may fear a loss of control over the people, so now would be an opportune time to seek aid from the U.S.

“Everything has stopped in Cuba,” said Hidalgo, referring to the unrest in the streets, since President Obama announced a new U.S. policy toward Cuba.

He said any U.S. aid to Cuba would flow through the government first, and the benefit to the Cuban people would be a “trickle-down.”

The Cuban government has gained legitimacy now because it has been recognized by the U.S. government, “but what has the U.S. gained? I don’t know,” said Hidalgo.

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