RSM Global

Guest post: The death of Chavez - what's next for Cuba?

RSM’s Regional Leader for Latin America, Bob Burdett, provides first-hand his thoughts on the impact of the death of Chavez for its main benefactor - Cuba.

Word of Chavez’ death started circulating around Havana around 5 o’clock Tuesday (5th), first as whispers and then openly. By dinner it was the topic of every conversation – Chavez is gone. What will it mean for Cuba?

The massive demonstrations of mourning, probably planned long in advance, started early Wednesday morning in Havana and continued through Thursday.  TV coverage of the marches and speeches was non-stop. 

The question on everybody’s mind: What next? Aid and support from Venezuela has accounted for over 20% of Cuba’s GDP, enough to keep the country’s economy afloat. With a change in control in Venezuela will this generous support be continued? Some on the island speculate that the uncertainty around this question will spur Cuba’s leadership to a faster and more aggressive transition to a more open economy.

Movement in the direction of openness has already resulted in massive changes in Cuba over the past several months. Change is in the air, and you can sense a new optimism on the streets, in the official institutions, and in the private restaurants and other businesses suddenly opening in Havana.

Private ownership of property and growing categories of businesses is now legal. Most Cubans are now free to leave the country and travel abroad if they have the means to afford it. Most recently, Raul Castro, the President of Cuba, announced that he is in his final term of office, setting the stage for transition to a new generation. Another round of openings will be announced in July, and people expect them to go beyond anything announced so far.

As a consequence, foreign investment in Cuba in sectors as diverse as tourism and energy is growing at a rapid pace. The players are European, South American and Asian, led by China, all taking advantage of the void left by the absence of the United States. When America finally ends its decades-old embargo on Cuba, it will find the island filled by holiday resorts built and run by Italian and Spanish companies, energy companies with Brazilian and Russian names, and buses and cars from China.

Meanwhile Havana remains one of the most fascinating cities on earth, a remarkable jewel spared the devastation of modernisation suffered by most Latin American cities in the past 50 years. It is a time-warped museum where the pace is slow, the people are educated and kind, and materialism has taken a back seat to more human values, at least for now. 

But change is happening, and the likelihood is that the death of Cuba’s main benefactor is going to push Cuba much closer to the rest of the world.

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