How will improved relations with the USA change Cuba?

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I have to confess to being a big fan of Cuba. I think that it is a beautiful country, in a fantastic location, with a highly intelligent and well educated population, who have been the victims of international politics for the last 50 years. As such, the current thawing of relations between Cuba and USA can only be a good thing, as it should give some hope of economic recovery to the Cuban people.

 

However, change brings risk with it, and I sense a very real danger that in their rush to become best friends with the Americans, Cuba will forget some of the features which made the country unique in the first place, and just become another homogenous Caribbean island, receiving 50 cruise ship arrivals a day, and with hotels filled with American tourists looking for “authentic” experiences which by then had been lost. I just hope that my pessimism is ill founded.

 

Some years ago, I took my family on holiday to Cuba. Our arrival in Havana was interesting, in that builders had severed a power cable which supplied electricity to most of the heart of Havana, and as a result, for 2 days, half the bars and restaurants could not open, due to lack of power, lighting, heating, cooking facilities etc.

 

Despite that, it was possible to see behind the fading splendour of the buildings, and feel the vibrancy of the people to realise why this had been the playground of the wealthy Americans and others in the 1950s and before. I did however get a very real sense that I might be standing at the edge of history, and that if relations ever normalised, the country would change irrevocably. It has to be said that many of those changes would be for the better. Despite being some of the best educated people on the planet, the nation was impoverished. We were told stories of how following the collapse of Communism in Russia, Cuba’s main trading partner simply stopped investing in the country, and we saw many examples around the country of collapsed industry – particularly sugar plantations which had relied on Russia as their key export market.

 

The Cubans had had to find new business models and trading partners, and this contributed to the large growth in tourism in the 1990s, with hotel investment from Spanish hotel groups in particular, with large numbers of tourist arrivals from Canada, South America and the UK – a topic I will come back to,

 

There was other clever diversification too. Due to its inclusive education system, Cuba had trained more doctors than the population needed, and it was interesting to hear that as a means of getting oil from one of its allies, Venezuela, an exchange deal had been made whereby Cuba supplied doctors to that country in return for discounted oil.

 

It also led to an interesting situation within tourism, in that there is something resembling a flat wage structure in the country, so that doctors and lawyers are paid the same as barmen and chefs. You can see why the brightest and best would want to work in tourism, to get exposure to Western populations with money to spend. Whilst at our beach hotel, one of the entertainment team mentioned in passing that he was a qualified lawyer – he was apparently better off organising beach volleyball for European and South American tourists than advising Cubans about their divorces.

 

All this helped the country get through the challenging period of the 1990s and 2000s, but I always felt that attempting a rapprochement with the USA was the only real long term hope for the country. I saw huge challenges in the way, many of which still exist. One of the features of the Castro revolution was that all houses and other accommodation was seized, and all the Cubans who fled to the USA lost their property without any compensation. I still fear that the American litigation culture will mean that at some point in the normalisation process, the families of some of these people will attempt to recover their assets through the American courts – from a population who simply cannot afford to compensate them. I would like to hope that as part of any deal between the USA and Cuba, this issue is addressed, and that there is no attempt to litigate to recover assets – but I am not holding my breath.

 

With my particular interest in tourism, my bigger concern is what is going to happen to the unspoilt country that I visited. Without a doubt “unspoilt” equally means “poor” and in need of huge investment. Interestingly, over the past 10 to 15 years, I have met many times with senior Cuban tourism officials, who have been at pains to reassure us that even if there ever was an opening of the borders to the USA, the country would not forget those who supported them in their difficult years. However, already we have seen some changes. The tourism industry was recently advised that all Cuban hotels would henceforth be contracted in US Dollars, and that this applied to already signed contracts. Exchange rate differences meant that this caused a significant price increase for most tour operators – but this simply became the tour operators’ problem.

 

We are also seeing large numbers of additional US tourists visiting the country. Whilst in the short term, these arrivals will simply be absorbed into higher occupancies in Cuban hotels, it will not be long before bed shortages and the inevitable effects of demand pressure on a fixed supply result in increased prices. And then there is the cruise ship situation. Cuba is ideally situated as a calling point for ships coming out of Miami, and I am sure that Carnival and Royal Caribbean are already looking closely at their itineraries to see how many Cuban stopping points can be added to their programmes.

 

All these developments will lead to changes in Cuba. Don’t get me wrong – I am no Luddite, and recognise that Cuba needs and deserves massive investment. However, I suspect that the country will look very different in 20 years to how it looks now. I only hope that the features that have made it so special can be preserved.