Cuba: Land of Opportunity?
This week’s news that Cuba and the U.S. are breaking down walls, opening up trade and possibly even ending the Cold War-era embargo is a big deal. America is even planning to open an embassy in Havana as soon as possible.
While there are a lot of possible ways this could pan out—enter Congressional bickering—this move has the potential to be one of the biggest North American business stories of the decade, and franchisors could be a primary beneficiary.
As reported by the Associated Press, “among those eager for access to a Cuban market cut off by an economic embargo are U.S. farmers, travel companies, energy producers and importers of rum and cigars.”
Of course, not everyone is onboard with ending Cuban restrictions, citing the Castro regime’s past and ongoing human rights abuses. Others have found other stumbling blocks, fast-forwarding ahead to a Cuba with Starbucks and McDonald’s restaurants on every street corner, overrunning the country’s frozen-in-time 1950’s aesthetic.
President Obama’s new policy will allow American companies to export certain items, like building materials, farming equipment and communication tools. Further opening of the commercial spigot, a full repeal of the embargo, would require congressional approval, which would face guaranteed opposition from various interest groups.
According to the CIA World Factbook, Cuba has a $121-billion GDP ($6,051 per capita), is growing at approximately 3 percent annually, has a 4.3-percent unemployment rate and an economy that’s largely based on agriculture (19.7% of total GDP), industry (17.1%) and services (63.2 %).
This little island nation of 11.27 million people and 42,000 square miles still has an uncertain future, but as the gates of commerce began to creak open after five decades, it’s clear that franchisors should keep their eyes on Caribbean foreign policy more than any point in recent memory.
Stay tuned to Franchise Times, as we’ll be doing the same.