Fidel Castro's Resignation Gives American Inventors New Hope For Havana
Tuesday, February 19, 2008PAUL KANGAS: The Bush administration says it can't imagine lifting the nearly 50-year-old embargo on Cuba anytime soon. U.S. business groups are hoping economic liberalization will go forward now that Fidel Castro has announced that he will resign as Cuba's president, clearing the way for his brother Raul to take charge. As Darren Gersh reports, it's not clear when or if American investors will be doing deals in Havana.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Investment advisor Thomas Herzfeld compared the news that Fidel is stepping down to a birthday present. Stock in the closed-end Herzfeld Caribbean basin fund, which invests in companies that stand to benefit from trade with Cuba, soared 18 percent today. Now, Herzfeld is considering whether cruise lines and freight companies might do well if Cuba reforms its economy.
THOMAS J. HERZFELD, PRESIDENT, THOMAS HERZFELD ADVISORS: I think, eventually, Cuba will return to being the hub, both commercially and otherwise of the Caribbean. The timing is uncertain, but I believe trade will be resumed with Cuba. In the next year or two, I think that it will occur.
GERSH: But some analysts believe there is little reason for Cuba to cut deals with the United States. The CIA estimates, after a long period of stagnation, the Cuban economy is growing again, rising 7 percent last year. Venezuela's Hugo Chavez is pumping in oil and billions of dollars to support his leftist ally. And while U.S. companies are not welcome in Havana, Chinese state-owned enterprises are. Robert Muse is an international lawyer specializing in Cuba. He says the Chinese government is cutting deals to secure natural resources from the island.
ROBERT MUSE, INTERNATIONAL LAWYER: They're committed to investing billions of dollars in nickel production in. Cuba -- nickel prices are at an all-time high -- in oil exploration and extraction in Cuba and other primary industries.
GERSH: With other Latin American countries following Havana's lead and nationalizing their economies, Muse says Cuban leaders see no need to meet American demands on human rights and democracy in order to lift the U.S. embargo.
MUSE: Nearly 20 years I've been around the subject, they are less interested than they have ever been. In a way, the Cuban leadership feels vindicated by history.
GERSH: The New America Foundation's Patrick Doherty says the next president will need to change a policy that has failed to influence Cuba.
PATRICK DOHERTY, U.S.-CUBA POLICY INITIATIVE, NEW AMERICA FOUNDATION: Fidel Castro has the ability to blame the United States for anything that goes wrong in Cuba but because of our embargo and because of that, we've been able to preserve one of the few remaining communist states by creating ourselves as a scapegoat.
GERSH: Business groups remain cautious on Cuba. They know overturning the U.S. economic embargo would require a costly lobbying battle, one that's likely to wait until liberalization in Cuba is well under way. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
