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Florida Distributor Goes To Cuba, Meets Castro

Global partnerships are key to new development

Last July, Yale Industrial Trucks’ A.D. “Sandy” MacKinnon spent four days in Cuba on a controversial trip with a group that included Tampa Mayor Dick Grecoi, several business people, a newspaper publisher and others from Tampa, Florida, on a humanitarian/business trip sponsored by the Alliance for Responsible Cuba Policy, a Washington, DC-based humanitarian organization. 
 

Cuba



Budget Revenues: $14.9 billion
Expenditures: $15.6 billion
Inflation Rate (consumer prices): 0.5%
GDP Real Growth Rate: 3%
GDP Composition by Sector: agriculture: 7.6%
                        services: 57.9% industry: 34.5%
Industrial Production Growth Rate: 2.4%
Labor Force: 4.3 million (state sector 78%)
Industries: sugar, petroleum, tobacco, chemicals,
   construction, services, nickel, steel, cement,
   agricultural machinery, biotechnology
Imports: Spain 16%; Venezuela 13%; Italy 8%
Literacy: 95.7% of population

Cuba, located 90 miles away from Key West, Florida, is roughly the size of the State of Pennsylvania. Sixty-five percent of Cuba’s 11.2 million people were born after Castro took over 42 years ago.

When the opportunity came to visit Cuba with a 25-person delegation of business people, politicians and others, I jumped on it. The visit was organized by the Alliance for Responsible Cuba Policy, a Washington, DC-based organization. As chairman of the Greater Tampa Chamber of Commerce, I knew the visit would be controversial. We wanted to extend an olive branch to our neighbors, even though our governor, Jeb Bush, was not pleased with the trip.

Our trip was not a trade mission. It was a “humanitarian” visit. However, six hours spent with Fidel Castro, meetings with government officials, and a tour of a modern port facility in the capital city of Havana provided us with insights about Cuba’s economy and hope for future trading partnerships. 

Cuban Economy
Insight into Cuba’s complicated, government-controlled economy was difficult to acquire in just a four-day visit. We garnered most of our information from those government officials who could speak English, talking freely with them as we toured various areas.

A.D. “Sandy” MacKinnon with Fidel Castro.
Among other things, A.D. “Sandy” MacKinnon (seated) discussed the merits of fine cigars with Fidel Castro.
Gran Teatro de La Habana (Opera House)
Since 1982, when the city became a UNESCO World Heritage site, the government has embarked on an ambitious preservation and restoration program concentrated in the Old City of Havana. However a severe lack of funding and materials hampers efforts, and the decay and neglect of the past 40 years coupled with the destructive tropical weather continues to claim buildings every year. The Gran Teatro de La Habana (Opera House) is an example of European architecture, one of several styles used throughout Cuba.
Habana Vieja (Old Havana)
There are four main plazas in Habana Vieja (Old Havana), all within a five-minute walk from each other. Each day craft stands fill the square selling everything from standard tourist fare to unique paintings and prints. Cars dating back to the 1950’s and 1960’s are standard fare.
A containerization facility at the Havana port
A containerization facility at the Havana port

A typical wage earner makes $25 per month, paid in pesos for some jobs and U.S. dollars for others. Doctors can earn $100 to $125 per month. Cuba’s unemployment rate is at 24%.

Employees work for the government and in effect are leased out to companies or organizations. This was true even of the 50-plus employees at the U.S. embassy, who are hired and fired by the Cuban government, not by our embassy officials.

At the Havana port, companies pay $5.50 per hour per worker to the government, which in turn pays the laborer $1 an hour. The government, of course, owns the housing and provides free education and medical care.

Everything is rationed, including the water—even in government facilities. Described as “austere,” many office buildings turn off the air conditioning in the lobby and in hallways, where even the lights are turned off. It was obvious that the government is trying to save wherever possible.

The basis of the economy is sugarcane and tourism. Other important products are tobacco, citrus fruit, rum, cocoa and coffee. Currently, sugarcane and nickel prices are very low, and with no more money coming in from the Soviet Union, the economy is at a standstill. Two bright spots are the pharmaceutical and biotechnology industries, which are developing nicely.

Port of Havana
Touring the Havana Port’s container facility—a 50-50 joint venture with the Spanish government which leases the land—we were impressed with its ability to handle cargo with what appeared to be very modern, complex, fully outfitted equipment. The Cuban government hopes to enhance that partnership.

But cranes and refrigeration units can’t work without power, which had been out for about an hour before our tour. This is a common occurrence because the generators are old and break down regularly. They are a challenge to repair without skilled labor and easy access to replacement parts.

The Future?
We met with Cuba’s economic development officials, who expressed interest in forming business partnerships to create jobs for their people and revenue for Cuba—an atmosphere of opportunity like that sought by U.S. communities.

Obviously, the Cuban system differs substantially from ours, but it appears that some of the trickle-down effects of free enterprise are moving into Cuba’s economy. At the port, the stevedoring and container-handling operations have initiated an incentive program to encourage productivity. Employees can earn up to $100 per month over the nominal monthly wage.

Progress is resulting from partnerships with corporations from around the world. Additional incentive programs could bolster Cuba’s economy and relieve the average Cuban’s predicament: too few goods and services to buy with what little he has to spend.

With the right combination of people, desires and will, I believe we could lift the aspirations of the Cuban people, just as we have done in our own country. We need to make a concerted effort to do what is right, take care of our neighbors and help our friends.

I am confident that with international help, Cuba could go forward, generating a new life and a new outlook for so many.

More information about the Republic of Cuba can be found in the resources below:.

The Role of Small and Medium-Size Enterprise In Cuba’s Future
“Policy reform and investments in a post-Castro Cuba will have to pay special attention to employment problems resulting from the need to conduct rigorous restructuring and privatization of the enterprise sector, including both manufacturing and services.” Read an excerpt by Antonio Gayosa from Cuba In Transition, a report of the U.S. Cuba Business Council.

The CIA’s World Factbook
Geographic, demographic, political and economic information.

Material Handling Equipment Distributors Association

A.D. “Sandy” MacKinnon Meet the Author
A.D. “Sandy” MacKinnon is president of Yale Industrial Trucks/Tampa/Orlando/Jacksonville, headquartered in Tampa, Florida. He is also president of the Greater Tampa Chamber of Commerce.

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