Hilton in Havana: 4 Questions on President Obama’s Visit to Cuba

In Historic Reestablishment Of Diplomatic Ties, Cuban Embassy Opens In Washington, D.C.
March 14, 2016

The President is traveling to Cuba this month on a trip that will mark another step in the much-anticipated opening of diplomatic relations with Cuba. Cuba and the United States opened their embassies in Washington and Havana last July and in February, the two countries signed a deal that paves the way for commercial air flights. Like Myanmar and Iran, Cuba is an example of the Obama Administration’s strategy of opening up previously isolated regimes to the global community, and potentially global markets. The premise of the strategy is that sanctions and isolation have not worked to bring about reforms in these tightly controlled countries. The Administration is betting that normalized diplomatic relations and openness to global commerce will help move these three regimes toward more stable, reliable, and democratic relationships with the United States and their own people.

While there is a sense of optimism about Obama’s visit and the strengthening of diplomatic relations after many years, the economic embargo can only be lifted by Congressional vote (President Obama called on Congress to do so in his most recent State of the Union). The possibility of easing sanctions will require Congressional action, at a moment when many Republicans – including all Republican presidential candidates except Donald Trump – have said they oppose the opening, especially while the Castros remain in power.

Other types of restrictions on American business activity in Cuba can be lifted through executive action. In recent months, travel restrictions have been greatly reduced, Cuba was removed from the U.S. State Sponsors of Terrorism List, direct mail is resuming, U.S. debit and credit card transaction are now allowed on the island, and restrictions on commercial flights have been lifted. That said, there has not been significant reform in the underlying political and economic structures within Cuba, even with the resumption of diplomatic relations. On the eve of the President’s visit, the Cuban Commission on Human Rights and National Reconciliation reported it had counted at least 1,141 political arrests in February, the third-highest tally since January 2010. There’s a long way to go for Cuba to be open for American business on a meaningful scale.

But the President’s trip this month is a signal that long-awaited business opportunities are a greater possibility than at any point in recent memory. Companies seeking to invest in Cuba will face a long closed society with a repressive environment for human rights that is among the most repressive in the world. According to the U.S. State Department’s reporting, the Cuban people are subject to pervasive government monitoring, harassment and detention to prevent free expression and peaceful assembly, heavy restrictions on the use of the Internet, circumscribed academic freedom, limits on the ability of religious groups to meet and worship, and arbitrary detention and arrest, among others.

Companies that are most likely to invest in Cuba are those that specialize in hotels, construction, tourism, and medical services. In January, Reuters reported that executives from Marriott, Hilton, and Radisson had held talks with Cuban officials in anticipation of easing restrictions. Ted Middleton, Hilton’s senior vice president of development in Latin America, told Reuters, “We’re all very interested. When legally we’re allowed to do so we all want to be at the start-line ready to go.”

As the President prepares to become the first U.S. president since Calvin Coolidge to travel to Havana, here are four areas to watch from a business and human rights perspective:

There’s a long way to go before there’s a Hilton in Havana. But as the prospect becomes more real, now is the time to start thinking about how American companies will confront human rights challenges in Cuba. The Cuban people should benefit from greater openness with the world, including integration with global markets. American companies have a role to play in entering the Cuban market in a way that improves the human rights of the Cuban people. 


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