DC Velocity - August 2016

with the government to gain a foothold.

QGiven the impoverished state of the Cuban economy, how can the Cuban people afford to pay for Western-style goods?

A With all Cuba’s potential, nothing eco- nomically sustainable can occur until the income question is addressed. We were told the average Cuban earns about 540 Cuban pesos per month, which is equivalent to about US$20. Prices of most foodstuffs are kept artificially low. But disposable income for consumables is a luxury.

QFidel Castro is an aging figurehead, while his brother, President Raul Castro, is also up in years and has said he will step down in 2018. Do you foresee a liberalization of trade activity once they are gone from the scene and a younger generation of leaders takes their place?

ARegardless of what government is in power, the key policy issue is and will continue to be how Cuba’s debt obligations are served and how its credit standing is addressed. Can the current Cuban government, or its future governments, improve the country’s creditworthiness? That issue as well as others that go beyond transportation and logistics are for the governments and international organizations to address. My focus is to understand Cuba’s changing landscape and to be prepared to serve DRT’s customers if and when the time comes.

business there. For example, can

U.S. logistics companies open offices in Cuba, or will they be required to use one of the three current gov-ernment-owned freight forwarders like Transcargo? That’s just one of many questions. You want to partner with someone who knows the local ways and means.

U.S. companies also need to understand how the currency works. Foreign companies would deal with the Cuban convertible peso (CUC), while locals would still transact in Cuban pesos. Foreign companies would pay the government in CUC currency, and the government would then pay the employees in Cuban pesos. Essentially, the currency conversion is a tax kept by the government. I know that as the landscape changes, logistics associations like TIA will play an important role in facilitating such an important endeavor.

QIn your discussions with Cuban officials, did you get any clarity on when the country could be ready to hit the regional or global trade stage?

ACuba feels it’s ready now. The investments in Mariel and the passing of the “Law of Foreign Investment,” which opened up Cuba to foreign investors, are the catalysts. The newly established Mariel Special Development Zone (ZEDM) already has established businesses that have

100 percent foreign investment. A Belgian logistics company handles shipments at the port. We also saw a few warehouses going up that were being built exclusively with foreign capital.