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The sounds of capitalism? That’ll be Cuba calling
December 13, 2012Article by Ray Withers
Ask most people what first comes to mind when you say Cuba? Caribbean island? Classic American cars? Cigars? Mojitos? Communism?
I don’t expect many would say capitalism but its true, Cuba is undergoing somewhat of a second revolution and embracing capitalism – and with vigour!
For those who missed it, renowned journalist Simon Reeve explores this fascinating island just 90 miles south of Florida, for a super BBC programme earlier this week, “Cuba with Simon Reeve“.
Compelling viewing for anyone with a fascination for frontier destinations, Reeve walked the streets of the capital Havana, ventured into the agricultural interior and explored the unspoiled coastline.
Allowed into the communist country, one of the few remaining in the world, on the strict understanding that he wouldn’t speak with anyone against the regime, Reeve was able however to speak to ordinary Cubans about their day to day lives which in itself was more than revealing.
From his interactions with some of the 11 million Cubans, is was clear that times are changing. The Cuban government, once so reliant on other communist nations such as the former USSR for financial support, has been crippled by the removal of these funds and trade agreements not to mention the impact of the US trade embargo which still stands today.
Two years ago, accepting the need for radical change in order to support it’s isolated population, Cuba announced the most sweeping and radical economic reforms seen in decades with the end of state rationing and 1 million public sector jobs cut.
Capitalism is slowly creeping into Cuba with the government issuing a list of certain jobs (including being a Dandy!) which Cubans are now allowed to do under their own steam – albeit with a licence of course.
The word “entrepreneur” is now common place as individuals, many of whom have other professional jobs, start up enterprises such as selling household supplies, opening fast food restaurants and even small hotels.
The pace at which Cubans have embraced this glimpse into capitalism is impressive and whilst not all perfect, positives are being felt especially in rural areas.
One of the most significant reforms however which may well be of interest to our clients are to property ownership. Before Cubans did indeed own their own homes and titles to them but were only permitted to swap property not sell it. Now, as of 2011 Cubans have the right to the sell property they own to other Cubans thus creating one of the fundamental aspects of a capitalist society – a property market.
Of course it is still early days and foreign buyers cannot simply arrive in Cuba and buy all the run down hotels, homes and land they like. That type of open market has not yet been reached but the genie is now out of the bottle.
As an investment company focused on frontier markets, we are particularly interested in the future opportunities available in Cuba as will I think our clients due to the massive potential for capital gain and rental income as the tourism market thrives.
Indeed we are not alone in identifying this potential, only a couple of weeks ago the new Carbonera Club, a high end leisure resort and hotel in the stunning north coast, was highlighted in the Sunday Times and we have heard of a number of new tourism related projects being planned for the island.
So with the tides firmly changing in Cuba, please do let us know if you might be interested in investing or indeed are looking for funding or project support in Cuba. We’d love to hear from you, just contact us on +44 1865 202 700.
As for me? Well I’m totally hooked, line and sinker and am already planning my trip out in theNew Year to see what could the be last of Castro’s Cuba.