Copyright 2002 The Atlanta Journal-Constitution
The Atlanta Journal and Constitution
May 12, 2002 Sunday, Home Edition
SECTION: @issue; Pg. 7F
LENGTH: 936 words
HEADLINE:
U.S. businesses covet untapped
Cuba market
BYLINE: SHELLEY EMLING
SOURCE:
Cox Washington Bureau
BODY: New York --- Carlson
Hospitality Worldwide boasts more than 1,530 hotel, restaurant and cruise ship
operations in 80 countries as far flung as China, Japan and Russia.
One
of the few places the Minneapolis-based company hasn't put its stamp on is
Cuba. But, boy, would it like to.
Carlson and other
U.S. businesses look at
Cuba and see not just enough beaches,
mojitos and hand-rolled cigars to entice any American vacationer, but an
untapped market of nearly 12 million consumers. But there's one big obstacle:
The U.S. government prohibits Americans from doing business with --- or spending
money in --- the Communist country.
Many observers point out another
obvious fact that's bound to temper enthusiasm:
Cuba is an
impoverished country with a government that harks back to Cold War days.
Even without the embargo, American businesses in
Cuba
would be confronted with a web of red tape, a maddeningly inefficient
bureaucracy and a government that's seriously strapped for cash.
"Businesses being allowed to operate without restriction doesn't mean
Cuba would have the capacity to purchase more than it purchases
now," said John Kavulich, president of the U.S.-
Cuba Trade and
Economic Council, which monitors
Cuba's economy.
According to a study by Texas A&M University, the U.S. economy is
losing up to $
1.24 billion per year just in potential
agricultural exports to
Cuba. Georgia alone is losing up to
$
28.7 million, which would translate into about 863 jobs for
Georgians, the study says.
But some observers point out that
Cuba currently buys no more than $
900 million
a year of corn, rice, flour, wheat and other farm products from foreign
suppliers, mostly in Europe and Asia.
"In order to increase its level of
imports,
Cuba has to increase its ability to raise foreign
exchange, and that's not going to happen until the government makes some
structural changes to its economy," Kavulich said.
Limited
exports begin
No matter what the hurdles, American businesses start to
salivate whenever anyone mentions the possibilities of more trade with a nation
just 90 miles from Florida.
Business leaders have expressed delight over
recent signs that pro-embargo forces are starting to weaken. And they're buoyed
by former President Jimmy Carter's visit to the island beginning today, which
they hope shines a light on the policy's shortcomings.
The United States
enacted an embargo following the aborted 1961 Bay of Pigs invasion, but support
has dwindled as most of the world's other Communist countries have become
democracies.
In November, the U.S. government allowed the first food
exports to
Cuba in 40 years, after President Fidel Castro
announced his desire to buy food and medicine following the destruction caused
by Hurricane Michelle.
The exports were permitted under a law signed by
President Clinton in 2000 that allows the humanitarian sale of food and medicine
to
Cuba, although it forbids U.S. interests to provide
financing for such transactions.
So far this year, Cuban interests have
bought $
73 million in U.S. agricultural products, including
3,000 tons of chicken parts from Atlanta-based Gold Kist Inc.
The Cubans
also have signed deals with Perdue Farms, Tyson Foods and others, transactions
that make the American Farm Bureau Federation ecstatic.
"We care very
much about the Cuban market and feel we could be more than competitive with
other suppliers due to our proximity," said Don Lipton, a bureau spokesman.
Bets are on infrastructure
Groups working to lift the
U.S. embargo say agricultural companies are the obvious beneficiaries of an end
to the embargo, but that energy, construction and telecommunications businesses
also would benefit.
"Nothing has been invested in infrastructure --- not
homes, roads, machinery for sugar crops --- for 40 years," said Sally Cowal,
president of the
Cuba Policy Foundation in Washington, a group
fighting to end the embargo. "The country needs everything."
Damian
Fernandez, a
Cuba scholar at Florida International University
in Miami, agreed that
Cuba needs substantial investment, but
cautioned that the market does have its limits.
"It's not China's
market, but it is an economy that with the exception of sugar, nickel, and
tobacco, basically needs everything, from consumer goods to infrastructure," he
said. "If I had to put my money somewhere, I'd put it on construction.
Cuba needs roads, the modernization of ports and the
infrastructure for agriculture. This is where there will be real opportunity."
When it comes to ports, consumer products from the United States to
Cuba probably would be shipped through Florida gateways,
although ports all across the South to Texas have eyed opportunities related to
Cuba. Tourism also holds potential. Although travel to
Cuba is restricted by a license system operated by the U.S.
Treasury Department, last year more than 79,000 U.S. residents visited, legally
or illegally. In addition, about 140,000 Cuban Americans got permission from the
U.S. government to visit.
Tom Polski, a Carlson spokesman, said he sees
a great pent-up tourist demand for
Cuba. "We could see
ourselves opening hotels and getting cruise ships in there relatively quickly if
the embargo was lifted," he said.
"There is a romance about
Cuba that makes it a potentially lucrative destination," Polski
said. "The fact is that Canadians and Europeans can take advantage of it, but we
can't."
Shelley Emling is a Cox Newspapers correspondent
who formerly covered the Caribbean and Latin America. She is now based in New
York.
GRAPHIC: Photo:
A freighter carrying U.S.
corn nears Havana in December. It was the first commercial food shipment since
1963. / JOSE GOITIA / Associated Press
LOAD-DATE: May
12, 2002