I take personal satisfaction in the fact that I’ve almost always resisted breaking the law. There is no proof whatsoever that some years ago, while in a small Latin American country, I was offered a very cheap round-trip ticket to Cuba with guarantees that my passport would not be stamped by the Communists who controlled the island. Everyone who knows me knows that my interest in old cars, baseball and cigars are no more than most enthusiasts. Besides, they’d say, I am more likely to wait until I can visit a free Cuba, so it never happened.
Lately I have been thinking about Cuba because all these trade missions and too much tourism are probably going to ruin that frozen-in-time thing Cuba had going. American tourism to Cuba, with its dual-currency system, generates cash for the state at the expense of the poor Cubans.
But these trade missions, which generate the impression that much is to be gained in an economy smaller than Somalia, ought to be subjected to Federal Trade Commission truth tests. Most Americans return sounding like “the prison island of Cuba” — as President Kennedy called it — has transformed itself into the land of milk and honey.
The U.S. Chamber of Commerce, for example, recently sent over a 60-person delegation from 32 companies, including Boeing, Sprint, American Airlines, Caterpillar, and Morgan Stanley. It was likely the most significant business group to visit Cuba since the 2002 U.S. Food & Agriculture Exhibition. All they could talk about was the 11 million potential new consumers 90 miles from our shore.
But this past month, a state trade mission led by Arkansas Gov. Asa Hutchinson returned with some truth tellers on board. They related that they had found Cuban grocery store shelves bare and the island’s leaders hesitant about welcoming free markets.
“The people in charge are not really, at this point, ready to embrace a free market economy,” said Mark Simmons, chairman of Simmons Foods. “That’s not really surprising considering where they’ve come from. It may be a slow process.”
The free traders from Arkansas found that only Cuban government officials were offering joint ventures with the government.
“They’re not quite ready for the type of business that any of us in the U.S. would want,” observed Melanie Wells, co-owner of ETW Enterprises Inc., a supplier to the poultry industry.
Arkansas rice producers remember 2008, the last year that Cuba purchased meaningful quantities of rice from the U.S., when our total food and agriculture exports were $710 million. Exports to Cuba have been off ever since, falling to $291 million in 2014 and 40 percent below that so far this year.
Vietnam currently provides most of Cuba’s rice imports and offers two-year financing. U.S. rice producers would not provide financing on their own, but they would like the U.S. government to do so.
At the recently reopened U.S. Embassy in Havana, led by Chargé d’Affaires Jeffrey DeLaurentis, a career member of the Senior Foreign Service with the rank of Ambassador, the big news is not our declining sales but our music, dance and photographic connections to the Cuban people. The U.S. State Department does not do propaganda all that well, but they do a lot of ballyhoo.
That’s why the blast of honesty from the Arkansas delegation was so refreshing. They went, explored, and returned with the simple news that Cuba lacks just one thing — an economy.
It has nothing to do with the embargo as that has not been a barrier for the capitalists of Europe and Asia for many years. Cuba does not have an economy because the Castro brothers have never wanted one. Cuba is as close to being without any economic freedom as almost any nation on the planet. You do not have a market if there is basically one purchaser of imported food and agricultural products. ALIMPORT, the Cuban government’s purchasing agency, is still the main buyer on the island if you are selling U.S. food and agricultural products to Cuba.
As USDA reports: “The government-operated Empresa Comercializadora de Alimentos (ALIMPORT) is the sole buying agency for U.S. agricultural products. ALIMPORT negotiates for client Cuban entities and handles all purchasing, documentation and logistics. Other Cuban agencies may import from non-U.S. sources, but in the case of the United States, ALIMPORT is the exclusive negotiating and procurement party.”
Political fixes will not make that any better. Arkansas rice producers might want a solution to the financing problems. In other words, our producers cannot negotiate a credit sale with Cuba because they are not creditworthy — so let’s give them a U.S. government credit card! Ballyhoo does not translate into economic activity. Meanwhile, our exports to Cuba continue to drop — to just $2.3 million in August.
If you go to Cuba as a tourist, or on a trade mission, be sure to take this information down in the event that you get food poisoning. They might be able to help you more than rum and cigars.
