Thursday, June 4, 2015

Enterprising Cuba in Washington, Newark, and Manhattan!

On Tuesday, Wednesday, and Thursday of this past week I delivered the following presentation on "Enterprising Cuba" to three different audiences.

First, I participated in the symposium "Rethinking Cuba: New Opportunities for Development," (Spanish language audio available now - see below - and dual language video coming soon) hosted by Ted Piccone and Richard Feinberg at The Brookings Institution in Washington, D.C. and kicked off by an excellent presentation by U.S. Undersecretary of Commerce and International Trade, Stefan Selig. I was honored to hear a macro-analysis of the Cuban economy by my co-author of "Entrepreneurial Cuba," Arch Ritter, as well as share the stage with John McIntire (Chairman of the Cuba Emprende Foundation) and Rafael Betancourt (of Havanada Consulting).

There were also insightful presentations by leading Cuban economists from the University of Havana's Center for the Study of the Cuban Economy (CEEC) including Juan Triana, Yaima Doimeadios, Saira Pons, Omar Everleny Pérez Villanueva, and Ricardo Torres, along with other luminaries such as Jorge Piñon (energy specialist at the University of Texas at Austin), Mark Entwistle (Founding Partner of Acasta Capital and former Canadian Ambassador to Cuba), Cuban-American lawyer Augusto Maxwell (Partner Ackermann, LLP and legal advisor to Airbnb in Cuba) and Barbara Kotschwar (Research Fellow, Peterson Institute for International Economics).
View more details on Brookings.edu


Then, on Wednesday afternoon I joined Carlos Seiglie, Ernesto Hernández-Catá, and Mario González-Corzo (all of the Association for the Study of the Cuban Economy, ASCE) together with special guests Armando Nova and Lázaro Peña (researchers at Havana's Center for the Study of the International Economy, CEEI) at the Rutgers University School of Law for a more intimate 30-person round table discussion where we each of us presented our work. This was especially innovative and gratifying as it was a chance for Cuban and Cuban-American economists to exchange their analysis of the recent changes in the Cuban economy (together with this Yuma).

Finally, today in my summer class at Baruch College on "Cuban Culture and Society," I had different students read and give summary presentations of each of the essays in the "Implications of Normalization" series recently published by American University and the Social Science Research council. Of course, I presented my own essay co-authored with Gabriel Vignoli as summarized below:

Ted A. Henken and Gabriel Vignoli

Raúl’s Reforms: Ambition (Prisa) & Caution (Pausa)
“Sin prisa pero sin pausa” (Reforms will move forward, “without haste but also without pause”)

Example #1: *Cuentapropista (“on-your-ownist”) vs. Emprendedora (“entrepreneur”); government limits, control vs. ingenuity, resourcefulness, market savvy of entrepreneurs
Example #2: Self-employment has grown from 150K to 500K & from 178 to 201 occupations

Significant quantitative changes & some qualitative improvement:
1.     Licenses readily issued to virtually all applicants.
2.     Potential entrepreneurs have wider array of occupations to do business in.
3.     They face a much improved tax policy allowing deduction of more expenses.
4.     For first time since 1968, they can now legally hire and pay private employees.

Many onerous & frustrating obstacles block optimal expansion:
1.     Vast majority not entrepreneurial, productive, or wealth-generating, but low-skilled, service jobs targeted at Cuba’s limited and cash-poor local markets.
2.     Nearly all professions excluded, especially frustrating and counterproductive given Cuba’s highly educated work force (just 7% are college graduates).

Obama's Cuba Policy Pivot: Moving from failed policy of Destabilization thru Isolation & Impoverishment towards a new policy of Empowerment through Engagement & Prosperity

Two Tracks: "POC" and "GOC"
1. POC: “Today the U.S. is changing its relationship with the people of Cuba” - Empowering individual entrepreneurs 
2. GOC: Reestablish diplomatic relations with the
Government of Cuba - Incentivize (and even cooperate/collaborate with) the GOC to deepen its initial if cautious private sector reforms 
*However, is this new policy
simply regime change by other means? Obama was explicit at Summit: “The US is not in the business of regime change” - despite the fact that Congress still is
*The U.S. should eschew any “Trojan Horse” approach to entrepreneurial engagement that seeks to empower the people by undermining the government

Specific Elements of New Obama Pro-Entrepreneurship Policy: 1. Negative List (what you can’t do – leave everything else open), 2. Goods (few) and Services (many), 3. Living Document (change rules and opportunities as context changes as a way to incentivize expansion of reforms as conditions and laws change on the island), and 4. Specific areas with innovation potential: Telecom agent, real estate broker, computer programmer, bookkeeper, document translator, homestays and homestay agents (BnBs) 
*Outsource back office operations to Cuba from Miami?
*Airbnb strategy and phenomenon as a model? Win-Win; Win-Win
        U.S. traveler-Cuban entrepreneur; Cuban government-U.S. government

“One giant leap for man’s kindness. The doors to 1,000 real Cuban homes are now open to you”

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