The Real Deal Miami

Post-Fidel Castro, what is the future of US investment in Cuba?

A hostile U.S. approach might encourage Havana to turn more toward Moscow and Beijing

November 30, 2016 01:32PM
By Doreen Hemlock

  • Print
Fidel Castro in 1998 (Credit: Getty Images)

Fidel Castro in 1998 (Credit: Getty Images)

Last weekend’s death of Cuban strongman Fidel Castro at age 90 raises the possibility of a faster economic opening in Cuba and closer U.S.-Cuba relations.

But analysts suggest caution. They note Fidel had been out of office for 10 years already and that President-elect Donald Trump has pledged to reverse some – if not all – of the Obama administration’s efforts to “normalize” relations with the communist-led island off Florida’s shores.

That means opportunities for significant U.S. real estate development in Cuba — beyond today’s few U.S. management contracts for hotels or offices for U.S. commercial airlines may have to wait.

From Havana, Fidel’s brother Raul, who became acting president in 2006 and president in 2008, has been slowly opening Cuba’s centrally-planned economy “without haste and without pause,” maneuvering between factions within the leadership who want faster and slower reforms.

“Change, therefore,” wrote Ted Piccone, a senior fellow at Brookings Institution in Washington, D.C, “is likely to happen only gradually under the pragmatic hand of his younger brother Raúl (now 85), who has promised to step down from office in 2018.”

Indeed, Raul may use Fidel’s death as a means to reinforce the government’s role on the island, said John Kavulich, president of the U.S.-Cuba Trade and Economic Council based in New York.

“The next months will be focused on confirming for the 11.3 million citizens of Cuba that the “Revolution” was not because of one man or only endured with that one man,” Kavulich told The Real Deal. “It is the fabric that wraps the country, and there will be no holes in that fabric.”

Yet, Washington can influence events on the island.

“A hostile U.S. approach might encourage Havana to turn more seriously toward Moscow and Beijing as lifelines in times of trouble,” said Brookings’ Piccone. “Instead…a better approach for the incoming Trump administration would be to maintain President Obama’s policy of constructive engagement and work with the post-Castro leadership to protect U.S. national interests in a more stable, independent, and open Cuba.”

Trump signaled toughness against Havana in a Twitter post Monday: “If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate deal.”

He also has included hardliners against Cuba in his transition team: Mauricio Claver-Carone, who supports a strict U.S. embargo, and Robert Blau, a former diplomat in Havana under the George W. Bush administration who is fervently anti-communist.

But some analysts note that Trump as a real estate developer might have his eye on business with the Caribbean’s largest island nation, too. Early in his campaign, Trump had said he was “fine” with Obama’s thaw with Cuba, and both Bloomberg and Newsweek have reported that the Trump Organization sent envoys to check on business opportunities in Cuba.

Even Trump’s words on Cuba can be construed in different ways, according to John Price, managing director of Americas Marketing Intelligence in Miami. “Trump did leave open some room to maneuver in the months ahead by promising policies that would improve the lives of Cubans,” wrote Price, “which some in Washington choose to interpret as an olive branch to Havana.”

Meanwhile, U.S. companies active in Cuba, from Marriott to American Airlines, are making their voices heard in Washington and beyond to keep their Cuba business going. That includes members of the Engage Cuba coalition seeking to dismantle the half-century-old U.S. embargo against Cuba.

Said James Williams, president of Engage Cuba: “After nearly six decades, it’s time for Congress to move forward and continue on the progress we have made over the past two years to build a brighter future for both of our countries.”

MENU