Island of Opportunity10/02/2015
I just returned from a trip to Cuba with an Arkansas delegation that included representatives from the agriculture industry, education and small business, as well as government officials.
The main purpose of the trip was to put Arkansas at the front of the line for trade opportunities when those open up.
I was the first governor to visit Cuba since the restoration of diplomatic relations with that island country. It was an amazing experience, and I left optimistic about opportunities for our state to do business in the Cuban market. It’s a market of 11 million people in a country the geographic size of Pennsylvania; they love the products we offer like poultry, rice and pork; and, logistically, we’re close.
As a trading partner, Arkansas makes sense.
But I urge patience. This is a cautious, step-by-step process — and it should be.
One of my takeaways from the trip was seeing evidence of the power of free enterprise. Even in this communist country now 55 years into a U.S. embargo, free enterprise manages to grow when given the slightest chance.
For example, for years barbers in Cuba were public servants. They were employed by the central government. No competition. No incentive to provide a good haircut. Customers understood that to get a decent haircut, they had to pay the barber a little something extra.
Soon enough, government officials learned about these off-the-books transactions. They wanted a cut. Socialism had led to corruption. Eventually, the government found it easier to get out of the barber business. It was a triumph for free enterprise.
A similar thing happened with government-owned versus family-owned restaurants. Competition kicked in quickly, and even the government restaurants raised the quality of their food and service.
But change doesn’t happen overnight. Cuba has been isolated from technology. It needs better banking, technical capability, infrastructure and communications.
Right now, sales to Cuba are cash-based, which is a big problem. U.S. law prohibits extending credit to Cuba’s state-run import agencies, which regularly run low on cash. Arkansas’s senior senator, John Boozman, has taken the lead in Washington to authorize extending credit for agricultural sales, which would be an important first step toward open trade.
Politically, I was disappointed to hear some of the old revolutionary, anti-U.S. rhetoric from Cuban officials. There’s clearly some bitterness about the embargo, which I have supported.
But we must look out the front windshield and not the rearview mirror. We have had an embargo for 55 years. It’s reasonable to try a different approach. Let’s start by extending credit authority to allow businesses to compete, and let’s see how the Cuban government responds.
I hope it responds by lessening centralized control.
I hope it recognizes that expanding trade will mean more opportunity for the people of Cuba.
And, most of all, I hope that translates into more freedom.