Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 12, 1995 TAG: 9511100047
SECTION: BUSINESS PAGE: F2 EDITION: METRO
SOURCE: MAGGIE JACKSON ASSOCIATED PRESS
DATELINE: LENGTH: Long
The 33-year-old U.S. trade embargo against Havana firmly remains. But a trickle of reforms by the socialist government and the entrance of eager foreign investors are perking American interest in the land of sugar and cigars.
``We're afraid that when the easing of restrictions happens, we'll show up and we'll be too late at the party,'' says Peter Blyth, president of worldwide development for Radisson Hotels International.
``That's not true yet, but the longer this [embargo] goes on, the more difficult it will be for Americans to get into the market.''
Radisson is owned by Carlson Cos. Inc., parent of the Radisson Seven Seas Cruises line and Carlson Wagonlit travel agencies. It's one of the most eager would-be players in Cuba, once the Caribbean's most popular resort destination.
Most U.S. companies don't complain much about the embargo, and business efforts to lift it - while growing - remain small. Nevertheless, more businesses are making plans for a possible return to the island 90 miles off Florida.
In a reflection of this coy mutual courtship, Cuban leader Fidel Castro held a number of meetings with U.S. business executives last month when he attended U.N. anniversary festivities. Executives including former Chase Manhattan Bank Chairman David Rockefeller and Archer-Daniels-Midland Co. Chairman Dwayne O. Andreas listened to him speak.
``There's a wait-and-see attitude by the business community,'' said Tom Cox, executive director of the U.S.-Cuba Business Council, an 18-month-old group of companies devoted to preparing for eventual trade.
``But there's also a keen interest in being prepared,'' he said. ``It's the last business frontier in the Western hemisphere.''
Certainly, Cuba has fallen on hard times since the days when Ernest Hemingway and a stream of other Americans had a love affair with its sparkling nightlife, while American companies prospered in a warm business climate.
All changed in 1959 with the ascent of Castro, who expelled foreign companies and seized properties worth millions. The U.S. embargo fully closed the door to trade, leaving the Cuban economy slowly strangling.
The economy took an even worse turn when Castro's communist supporters worldwide collapsed. From 1989 to 1993, the economy nosedived 40 percent, turning Cuba into a land of peeling paint and chronic shortages.
Faced with ruin, Castro began free-market reforms. While remaining loyal to his brand of socialism, he has invited in foreign investment and tourism, legalized small-scale private enterprise and begun talking about possibly paying off some of Cuba's $11 billion foreign debt.
Dozens of Spanish, Panamanian, Japanese and European companies have answered his call for investment, with hotels, oil exploration and other projects.
The government claims that more than 200 foreign-Cuban joint ventures worth $2 billion have sprouted, although outsiders peg the total at closer to $500 million. Tourism again is a priority; 800,000 tourists visited last year, and the government hopes to have 3.6 million annually in the next decade.
Still, American companies are excluded. Although President Clinton recently eased travel restrictions so educators, clerics and a few others may visit, legislation is pending that will tighten the embargo.
A strong Cuban-American lobby remains opposed to lifting the sanctions. But some say U.S. companies are beginning to seek an end to them.
``Businessmen are getting interested in investment; they are visiting Cuba; they are looking for the opportunities,'' said Jose Luis Ponce, a spokesman for the Cuban diplomatic mission in Washington. ``When they come back, they are making their opinions heard.''
A senior White House official, speaking on condition of anonymity, said business pressure to end the embargo has grown. But he cautions that it remains small.
``There's more pressure than there used to be, but there's relatively little,'' said the official, saying he receives a call a month from companies urging a lifting of the embargo, compared with a call or two annually two years ago.
Many companies are content to let the U.S. government take the lead in deciding when Cuba can do business with America. And some - particularly those with some of the $1.8 billion in principal expropriation claims against Cuba - are in no hurry to return.
``The lifting of the embargo should not occur until the human rights situation is satisfactory, until claims of confiscated property have been satisfied, and until protection of private property is guaranteed,'' says Emilio Alvarez-Recio, vice president for global advertising for Colgate-Palmolive Co., which has ``millions'' of dollars worth of claims against Cuba.
Recio, a Cuban-American, says he isn't worried about falling behind foreign competitors, given U.S. products' dominance in the pre-Castro market. ``We would quickly re-establish our place if the right conditions exist,'' he said.
But others - whether they're worried or just cautious - are giving Cuba more serious thought.
Royal Caribbean Cruises Ltd. has devised contingency plans that include possible ferry service or night cruises from Florida. Chrysler Corp. is collecting dealer applications.
``Cuba has a mystique and has an unusual attraction to U.S. business people,'' says James D. Whisenand, who publishes a 3-year-old business newsletter on Cuba and holds seminars nationwide.
``Still, most people realize it's a transforming communist market, and with potential rewards go high risks.''
by CNB