Will the Market Economy Win in Cuba?

Cuba’s burgeoning market economy represents opportunity for Hispanic businesses and Hispanic entrepreneurs as the U.S. ‘people-to-people’ visa program partially opens the doors to the island nation.

In central Havana, murals plaster buildings with political slogans that champion the 1953-1959 Cuban Revolution and its iconic hero, Che Guerva. Against this backdrop, street vendors sell handicrafts, books and artwork to foreign tourists. Some vendors earn as much as $10 a day–a significant amount by Cuban standards, where the average monthly income hovers at $20. These pioneering Hispanic market entrepreneurs are part of Cuba’s slow but steady movement toward free market enterprise, opening new opportunities for Hispanic leaders and Hispanic business.

Changing Attitudes

Pope Benedict XVI’s recent visit to Cuba highlights the country’s changing attitudes and political policies toward Hispanic business and religious freedoms. Under President Raul Castro’s leadership, Cuba appears to be moving in the direction of a market economy, introducing new economic reforms to support small businesses and attract investments from Hispanic leaders. And thanks to changes in U.S. travel restrictions, the Hispanic market is responding.

The U.S. government now permits U.S. citizens to travel to Cuba for cultural, religious and educational pursuits as part of its “people-to-people” visa program. Rather than sipping mojitos on the beach, these trips promote cultural and business exchanges with local citizens. Typical itineraries include meeting community groups, visiting orphanages, and experiencing cultural festivities and music.

For many Americans, these trips are a chance to see first-hand the Cuban culture that has been legally off limits for more than 50 years. For Cuban Americans, the lessened travel restrictions are a unique opportunity to reconnect with extended family and rediscover cultural heritage. New Cuban marketplace reforms are aimed at luring many of these Hispanic business leaders back. Foreign investment is key to supporting Cuba’s weak economy and nearly non-existent economic growth, reported to be 2.7 percent in 2011.

Will expanded economic opportunities and increased cultural exchange promote a more open society and democratic movements? Or will the influx of tourist dollars simply prop up Cuba’s communist regime, keeping Raul Castro in power longer than they would otherwise have survived?