Obama’s Cuba visit is more than an historic moment. For Obama it’s personal. Mark my word, we’re in for some big words this week.
It is nearly 90 years since a US President has visited Cuba (Calvin Coolidge was the last, in 1928).
And it’s over half a century since relations soured following Fidel Castro’s 1959 revolution. Pointing nukes at the Americans in 1962 went down very very badly (I don’t recommend it.)
As recently as 1996 the US imposed the Helms-Burton Act penalising companies investing in Cuba.
So when President Obama stepped off Air Force One yesterday, flanked by the First Lady, daughters Sasha and Malia, and even the First Mother-In-Law Marian Robinson, the sense of history was in the air.
Obama is enjoying that rare thing – the final flourishes of a presidency (before he hands over to Hillary or Donald in November). He gets to carve out his own legacy.
And bringing Cuba in from the cold is a top priority.
The human rights story is going to dominate the headlines this week. Why? Well, for our hack pack friends the arrest of a few protestors will be talked up to make headline grabbing ‘news’. There are reportedly 3,000 journalists covering Obama in Cuba this week.
But the real story is what this means for the economy. And by that I mean for the men and women of Cuba who currently earn an average of $25/week, and their families and children who depend on that.
Obama visits as the head of the global economic superpower worth $17 Trillion, 22% of the entire world’s GDP.
The embargo has cost Cuba a whopping $1.1 trillion and put this unique country in to a time capsule.
Now, none of this is rocket science folks. Banking restrictions need to be relaxed, rules which allow visitors to go to Cuba need to be lifted, and international companies need to work with their Cuban brothers and sisters to get the economy moving.
And it’s starting to happen.
Last week the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) softened its grip on Cuba by announcing big changes to rules on Americans visiting the island and relaxing the ways the US Government meddles in global banks dealing with anything Cuba.
Foreign banks have been fined $14 billion for dealing with Cuba over the years and they’re understandably wary. The US will need to tell the banks its now OK to transact with Cuba and Cuban businesses.
Bruno Rodriguez Parrilla, Cuba’s Foreign Minister, said last week that he’s going to test the US by transferring dollars to the United States to verify if they can actually be made without repercussions – the threat of unfair and intimidating punishment.
And last Friday somebody close to me successfully sent €5,000 directly from Australia to Havana. The money arrived in downtown Havana on the same day. Unheard of!
Last week I saw my friend Secretary Carlos Gutierrez, former US Secretary of Commerce under George W Bush, and CEO of Kellogg Company. Carlos is with President Obama in Havana today. We both agree that Obama’s visit will be good for Cuba US relations, but the road to restoring full relations will not be straightforward.
But let me tell you what will drive all of this. And listen out for this in Obama’s speech tomorrow.
It’s trade, and economic relations. Cubans want it. Others are doing it. The US needs it because it’s missing out on a boom next door. And it’s happening.
Only this weekend US hotel group Starwood signed a deal to renovate three delapidated hotels in Cuba, owned by the Cuba military. Not a big deal, but symbolic, not least because it’s the Cuba military.
And last week at CNBC’s Cuba Summit in New York I spoke to US Government officials, diplomats, and fund managers with hundreds of billions of dollars, looking at how they could get a slice of the Cuban pie.
I’ve written before about how American businesses are missing the boat, big style. In the past 12 months US businesses have been able to sign only a handful of deals. The Chinese “friendly” economic invasion of Cuba is well underway.
So when you read about Obama’s speech tomorrow, read between the lines. The democratic reform and human rights issues will be used to make the headlines.
But it’s the economic news that will matter. As I always say, follow the money.
I travel to Cuba regularly. My Cuban friends in business and government have high expectations of change. But they’re not going to be pushed around or bullied into transforming their country into some sort of Vegas with a Starbucks or a McDonalds popping up on every busy street corner. They’re going to do it their way.
And if Obama can get both countries on the path to friendship, through meaningful commercial, sporting and cultural ties, and the proper deployment of capital, that will be what the history books record.