Government and Travel & Tourism

Speaker offers insights into Cuba’s economy

Former U.S. coordinator for Cuban Affairs takes a dim view of island nation’s prospects.

March 25, 2016
| By Pat Evans |
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The romanticized vision Americans may have of Cuba could very well change.

The communist Caribbean nation has 11 million people and a gross domestic product approximately the same as the city of Hartford, Connecticut, with no signs of improving, said Charles Shapiro, former coordinator for Cuban Affairs for the U.S. Department of State and former ambassador to Venezuela.

Shapiro, who is the president of the World Affairs Council of Atlanta, will speak during the World Affairs Council of Western Michigan’s Great Decisions Global Discussion Series at 6 p.m., Monday, March 28, at Aquinas College Performing Arts Center.

During his discussion, Shapiro will provide an inside look at the presence the United States maintained in Cuba during a 57-year trade embargo, which he witnessed firsthand on many occasions, including four visits in the past year.

These days, there is a high interest in Cuba among Americans, he said, beyond the hype Cuban cigars have long garnered.

“It’s so close to the U.S., and there’s a pent-up demand to visit because they haven’t been able to go,” Shapiro said. “It’s sexier beyond what it deserves, but people love the idea of Cuban drinks and dancing.”

Cuba was at the forefront of media discussions last week with President Barack Obama’s visit — the first for a sitting U.S. president since Calvin Coolidge in 1928 — as Obama pushed for economic change there.

That, however, is unlikely to occur anytime soon, Shapiro said. The Cuban government led by Raul Castro is steadfast in its communist beliefs and, as a result, wages and the supply chain are “screwy.”

“If you’re over 40 you know; if you’re under 40 you don’t,” Shapiro said. “What you have in Cuba is a traditional communist nation that has resisted the Chinese model. Something like 98 percent of their production is produced by the state.”

The “poorly working communist economy that doesn’t work” has not been kind to the country, and the demographics are working against it, Shapiro said. Large amounts of emigrants, zero immigration, declining birth rates and longer lives are all having a detrimental effect on the economy.

Castro has been proud of his country’s achievements of providing free health care and education for its citizens, but those benefits will be hard to maintain unless something changes, Shapiro said.

“They want to protect those, but the rest of the economy is not producing the oomph to allow them to do that,” he said.

Shapiro said Obama’s visit shows there’s a desire on the part of the United States to help shape how the future of Cuba will look, but he doesn’t believe that’s realistic. He said the Cuban citizens must be the catalysts for change.

American companies haven’t been able to do business in Cuba, but other European and Asian countries also have avoided investment in the island nation. The lack of foreign presence is largely because there is no money to be made, Shapiro said.

With the tension between the U.S. and Cuba easing, some companies have jumped at the new opportunity, such as Starwood Hotels & Resorts and some telecom companies.

Those services are for the tourists, Shapiro said. The pent-up tourist demand has prompted airports in cities across the U.S. to apply for direct routes, including Atlanta, New York and Washington, D.C.

“It’s an island of 11 million poor people,” he said. “The people with money are the tourists. That’s why it’s the hotels and flying tourists in and out that’s very attractive.”

Shapiro said some American companies will be able to make money in Cuba, but for the most part, until there’s more change, there’s not a lot of money to be had. He said the Cuban state newspaper ran a long editorial prior to Obama’s visit expressing the nation’s steadfast relationship with Venezuela and resistance to change.

“I guarantee Raul Castro approved it, and it essentially says, ‘We’re not changing,’” Shapiro said. “It’s an inefficient country, and how they sort that out will be interesting. That’s what they need to do.”

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