For close to half a century, the Cuban remittances market was buffeted by U.S. embargo legislation and restrictions from Cuban socialism. No other remittances market in Latin America suffered so many limitations. Today, the situation is quite different: sending remittances to the island is one of the sectors that has been most favorably affected by the rapprochement policies pursued by President Obama's Administration since his arrival at the White House in 2008. In 2015, remittances sent to the island reached a record level of 3,354.1 million dollars.
From 2008 to 2015, Cuban remittances grew by an astronomical 1,907.1 million dollars, for an average annual increase of 238.3 million dollars, an unprecedented growth performance since the receipt of remittances became legal in 1993.
The Cuban remittances market recorded the highest growth in Latin America from 2008 to 2014, growing by 1,681.9 million dollars, surpassing the growth recorded by the Dominican Republic (1,423.0
U.S. President Barack Obama’s December 17 2014 announcement that he would normalize relations with Cuba made the island a top talking point in the international business world, especially in the United States. It also created a tidal wave of frenzied media headlines. Cuba became a buzzword for the world’s biggest TV networks, and news stories about the island flooded the Internet, while lawyers and consulting companies were inundated with calls.
Since then, major legal firms have gone on the hunt for clients interested in exploring business opportunities in a market that was for so long forbidden fruit. Several market research companies are doing the same, among them the renowned Boston Consulting Group.
An article published by journalist Mimi Whitefield in the Miami Herald on June 2, entitled “Study finds low Brand awareness among Cubans- but they do know Adidas”, reports on a recent study carried out by Boston Consulting Group.
This study makes a number of conclusions which
Spain is Cuba’s third most important trading partner, after Venezuela and China, with an annual trade turnover of approximately 1 billion Euros. More than 250 Spanish firms operate in the Cuban market, with many of them having operated there for more than 20 years.
Spanish companies are the largest foreign investors in a broad range of sectors, such as tourism, financial services, water supply and other related services. Undoubtedly, Spanish businesses have played an important role since Cuba opened its doors to foreign investors in the decade of the 1990s.
Spanish hospitality chains were pioneers in the development of the Cuban tourism sector, with the first investment being in the hotel Sol Palmeras (Meliá Group) in Varadero in 1989. Other firms and institutions in the financial sector, agroindustry and services followed suit. Thus, in recent bilateral meetings, Cuban government officials conveyed to their Spanish counterparts “their decision to compensate Spanish firms th
When commercial airline transportation is established, charter airlines - who have dominated the market since the end of the 1970s -will lose business while travelers will see a reduction in air fares
Passenger air travel between the U.S. and Cuba has been dominated by charter flights for many years. Regularly-scheduled flights between the U.S. and Cuba were suspended in 1961, with charter flights since then the only means of passenger air travel between the two nations. In the last six years, charter flights grew by leaps and bounds, particularly since President Obama eliminated the regulation put in place by his predecessor President Bush that allowed CubanAmericans to travel to the island only once every three years.
As shown in Figure 1, the number of charter flights to the island has grown steadily , rising by 135.62% between 2010 and 2015, from 1,996 flights in 2010 to 4,794 in 2015.
Figure 1. Charter flights from Miami and Tampa grew by 135.6% since 2010.
The importance of investment in determining the future growth path of an economy cannot be overstated. As opposed to current consumption, which comprises the goods and services produced by an economy that the population or the government uses up (consumes) in a certain period of time, investment (or gross capital formation) reflects the construction or acquisition of plant and equipment and improvements in infrastructure that will yield an economy's production of a future stream of goods and services.
Economists generally consider the ratio of gross capital formation to the gross domestic product (GCF/GDP) as an indicator of future growth of an economy. Economists posit that the higher this ratio, all things being the same, the stronger will be the future growth performance of an economy.
Cuba's GCF/GDP Ratio
Writing in 2006, economist Omar Everleny Pérez Villanueva observed that robust economic performance in Cuba would require achieving capital accumulation (GCF) ratios
On December 17, 2014, merely a few hours after the announcement by the U.S. and Cuban Presidents of the start of discussions leading to the eventual reestablishment of diplomatic relations between the two countries, a barrage of telephone calls and email messages began to arrive in La Habana, Miami, Washington, and New York City from U.S. businessmen and consultants interested in the Cuban market.
U.S. businessmen considering entering the Cuban market require not only an understanding of the regulations issued by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) but also of Cuban commercial laws and of the Cuban legal system in general. The fact that the U.S. and Cuba have legal systems based on different doctrines (common law and Roman law, respectively), the relative lack of contact between the two countries over the last fifty years, and the disparate socio-economic models the two countries have pursued, highlight the potential for misunderstandings
A very large inflow of tourists is affecting Cuba's tourism infrastructure. Through September 2015, tourist arrivals were running approximately 400,000 ahead of a like period in 2014, well on their way to exceeding the record high over 3 million tourists received in that year. Analysts are predicting even higher levels for 2016. Travel from the United States is the principal driver of these booming increases.
Cuban official statistics do not separate out persons traveling from the United States to the island. Such travelers are included in the "other countries" category, which has been growing rapidly in the last few years and is second to Canada as an emitter of tourists to Cuba.
To fill this information gap, The Havana Consulting Group (THCG) has been monitoring travel to the island from key locations in the United States. According to THCG monitoring, from January through October 2015, 3,764 flights to Cuba originated from the Miami and Tampa Airports, 277 more flights than
Half a century after banning commercial advertising in its mass media, this important marketing tool could make a comeback in the island's audiovisual communications scene.
The inclusion in the new portfolio of projects for which Cuba is seeking foreign investment recently published by the Ministry of Foreign Trade and Foreign Investment of one to establish a paid cable television channel could be the springboard to reintroduce commercial advertising in Cuban television. To be sure, such a move would be a positive one in Cuba's reform process.
The national television system requires financial resources to create new programming that would be well received by national audiences and would compete with the informal, innovative and popular "package" of content that is transmitted person-to-person weekly through USB memory drives and reaches millions of Cubans. The national system also needs to modernize its technological base and improve working conditions for the professionals who
.—A few months ago it was unimaginable that the promising but uncertain Mariel Special Development Zone (ZDEM) would get a boost from the announcement on December 17, 2014, of negotiations between the Cuban and U.S. Governments to reestablish diplomatic relations.
After a year of an all out campaign to promote abroad the benefits of the ZDEM, and full engagement of the country's propaganda machine to seek foreign investors, the reality is that the Cuban government had only been able to attract 35 investment proposals for evaluation. Since December 17, the situation has changed significantly and there are reports of more than 300 proposals.
Unquestionably, good relations with the United States is the key for the future success of the ZEDM. The new diplomatic scenario reduces uncertainty and improves the island's climate for foreign investors.
The best promotional tool for the ZEDM has been the thaw of diplomatic relations between the two countries. Foreign investors (not fro
Havana (Reuters).Cuba's national cigar maker Habanos SA, a joint venture between the Communist-run government and the British-owned, Madrid-based tobacco giant Altadis, announced Monday that sales totaled $401 million in 2011, a 9% rise over the previous year.
Ana Lopez, the head of marketing at the company, said the jump was in line with that experienced by other global luxury products. Sales fell in 2008 and 2009, and were nearly flat the following year as lingering global economic weakness kept sales growth of luxury products from taking of.
While top-flight stogies are synonymous with Cuba, they represent only a small fraction of the island's flagging economy, which is primarily dependent on nickel mining, tourism and professional services.
Lopez estimated that the 50-year-old U.S. trade embargo cost Cuba's tobacco industry $79 million in sales in 2011. The company has also been hurt by the economic crisis in Spain, its No. 1 market.
But she and other executives said Hab
The announcement that the Paris Club and Cuba have set the island’s foreign debt with those countries at US $15 billion is a positive contribution to the strategy traced by the Raul Castro government, aimed at inserting the country into the world economy.
At root, the strategy is aimed at insertion in the international financial system, so as to be able to secure large credits in the middle term and use these to bolster Cuba’s economic development during the reform process. This is going to be a complex and time-consuming process, particularly owing to the number of adjustments that this insertion in the global financial system requires.
This first step, that of acknowledging the debt, creates an atmosphere of confidence between Cuba and its debtors and will allow the country to develop a plan for the payment of the debt and pave the way for Cuba to receive new loans. The total amount of Cuba’s debt is estimated at some US $26 billion.
Taking Advantage of the Thaw