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MBA Study Tour 2012:Changes and Challenges  in Cuba’s Economy
Trip Purpose—  Havana is an enchanting city full of history, arts, and  culture. The city/province has about 2.1 million ...
Why Cuba?—  Strategic geographic location, 90 miles “close” to the  continental US.—  Yet, it remains a mystery to many ...
Why Cuba?—  Boasts a growing biotech industry, which includes dozens  of registered patents in the US, despite the embarg...
Why now?—  Cuba recently approved economic reforms aiming  to:  —  Putting idle lands into productive use (cooperatives)...
Why now?—  Goals will be achieved by:    —  Modifying the structure of employment, reducing        inflated state sector...
Why now?—  Summary of Cuba’s new strategy:    —  First: Downsize the state sector.        —  Layoff redundant workers (...
Cuban Export by Product Shares (1990)                       Total: 5,658 Million Cuban Pesos                              ...
Cuban Exports by Product Shares (2008)                         Total: 12,506 Million Cuban Pesos                          ...
Why now?—  Because now we CAN!    —  The Obama Administration has relaxed the travel     requirements for legal visits t...
The Study Tour—  Facilitated by Global Exchange Reality Tours. With more than 20 years  of experience, they are trusted b...
The Study Tour—  Not included:  —    Air travel from US to Mexico (Cancun).  —    One meal a day and meals on the first...
Itinerary (tentative)—  When: From March 10th to March 24th, 2012.—  Visits will likely include:  —  Meeting with exper...
Itinerary (tentative)—  Visits will likely include (continued):  —  Visit tobacco factory.  —  Architectural tour of Ha...
Itinerary (tentative)—  Visits will likely include (continued):  —  Visit the community art project Muraleando or Colore...
Cuba in Pictures
UWB MBA Cuba Study Tour 2012
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UWB MBA Cuba Study Tour 2012

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Changes and Challenges in Cuba’s Economy

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UWB MBA Cuba Study Tour 2012

  1. 1. MBA Study Tour 2012:Changes and Challenges in Cuba’s Economy
  2. 2. Trip Purpose—  Havana is an enchanting city full of history, arts, and culture. The city/province has about 2.1 million inhabitants and is the largest city in Cuba and the second largest in the Caribbean.—  Matanzas is the second largest Cuban province and one of the most industrialized, with oil wells, refineries, and sugar mills. It is also famous for the Varadero beaches and resorts.—  The theme for the study trip is: Changes and Challenges in Cuba’s Economy. Subthemes include sustainability in the food, health, energy, and educational sectors, and advances in the biotech and traditional industries.
  3. 3. Why Cuba?—  Strategic geographic location, 90 miles “close” to the continental US.—  Yet, it remains a mystery to many or is quickly dismissed by some because of possible misconceptions.—  Cuba’s socioeconomic indicators rank the island in the top spots in comparison to the rest of L. America. —  Life expectancy at birth: 79 years (2nd in L.A.) —  Infant mortality rate: 4.4 for every 1,000 births (1st in L.A. and 2nd to Canada in the Americas) —  Adult literacy: 99.9% (1st in the Americas) —  Human Development Index (HDI): 0.760 (4th in L.A.) —  Ranked 1st in the Americas for preventive medicine. —  Free education and healthcare for all, plus other subsidies. —  One of the safest countries in the hemisphere to visit.
  4. 4. Why Cuba?—  Boasts a growing biotech industry, which includes dozens of registered patents in the US, despite the embargo.—  The Cuba “brand”: despite its relatively small size, limited population, and relative isolation, Cuba is known worldwide for its dynamic culture and history. —  Birthplace of salsa music and dance, of international appeal. Also son and cha-cha are important Cuban rhythms. —  Known for it’s achievements in baseball, boxing, volleyball, and other sports in international arenas. —  It’s beaches, Havana Club rums, sugar cane, and tobacco “puros” reinforce the island’s international image as a popular tourist destination.—  Why Cuba? Summary: —  Healthy, well-educated and developed population, eager for changes and opportunities, and capable of competing against more resourceful countries in key areas. Beautiful, historic cities and scenery.
  5. 5. Why now?—  Cuba recently approved economic reforms aiming to: —  Putting idle lands into productive use (cooperatives). —  Raising agricultural yields (thru organic and sustainable methods). —  Developing new mechanisms to reverse industrial and infrastructural de-capitalization (increase FDI). —  Undertaking studies in order to eliminate monetary dualism, which is creating social divide. —  Provide improved capacity for more decentralized regional development. —  Recover traditional exports, such as sugar (though centralized price determination will be maintained). —  Recover the place of work as the fundamental means of contributing to the development of society and the satisfaction of personal and family needs.
  6. 6. Why now?—  Goals will be achieved by: —  Modifying the structure of employment, reducing inflated state sector staffing and increasing employment in the non-state (“private”) sector. —  Eliminating the ration book, “la libreta”. —  Promoting export-oriented industries (biotech, human development, nickel mining, etc.) —  Developing new industries, such as tires, construction materials, metallurgy, etc. —  Restructuring retailing and wholesaling. —  Workers’ incomes in state enterprises to be linked to enterprise performance. —  Establishing wholesale markets for state, cooperative, and self-employment enterprises. —  Liquidating insolvent enterprises.
  7. 7. Why now?—  Summary of Cuba’s new strategy: —  First: Downsize the state sector. —  Layoff redundant workers (1.3 million employees, or about one-fifth of the country’s working population). —  Liquidate insolvent enterprises. —  Re-structure state control of main industries. —  Second: Re-absorb displaced workers. —  In cooperatives (private enterprises facilitated by the state) —  In strategic self-employment markets. —  Increase Foreign Direct Investment (FDI). —  Third: Adjust and control. —  To avoid a Russian-like implosion. —  Or a loss of social equality, as in China and Vietnam.
  8. 8. Cuban Export by Product Shares (1990) Total: 5,658 Million Cuban Pesos Citrus: 145.1 Tobacco: 111.6Sugar: 4,313.80 Nickel: 388.1 Pharmaceutical: 84.6 Fish: 97.4 Other Merchandise: 274 Tourism: 243.4A snapshot of Cuba’s exports around the time when the USSR was dissolved.
  9. 9. Cuban Exports by Product Shares (2008) Total: 12,506 Million Cuban Pesos Sugar: 233.4 Alcoholic Beverages (mostly rum): 244.6 Other Services Tobacco: 236.5(professional services in health, education, Fish: 73.7 sports, and other Nickel: 1,491.3 consulting): 6,146 Pharmaceutical and Biotech: 296.8 Manufactures:138.8 Transportation equipment: 167.1 Other Merchandise (mining, etc,): 797.4 Tourism: 2,359Economic reforms went from being a “necessary evil” to a matter of survival.
  10. 10. Why now?—  Because now we CAN! —  The Obama Administration has relaxed the travel requirements for legal visits to Cuba: —  For credited, academic trips a simple visa, arranged by a travel agency, is all that’s needed.—  Recently announced reforms are positive and encouraging.—  Today, there are 400+ joint ventures representing investment by 46 countries of more than $5 billion.—  Because visiting Cuba can be a lifelong memory and a unique opportunity to see something truly different, so close and yet so “far” from the US. —  Advertising is still mostly nonexistent in Cuba. —  Cubans are some of the most resourceful and inventive people in the hemisphere. They have a “repair it” mentality and seldom throw things away.
  11. 11. The Study Tour—  Facilitated by Global Exchange Reality Tours. With more than 20 years of experience, they are trusted by many university programs for arranging trips to Cuba.—  Price: About $2,500-$3,000 for 20-30 people.—  What does it include? —  Air transport from Mexico (Cancun) to Havana. —  Ground transportation to/from visits. —  Overnight accommodations in a 3-star hotel in Old Havana (double occup.) —  Two meals per day (excluding arrival and departure days). —  Pre-departure handouts. —  Lectures and related materials. —  Send-off reception. —  Interpreter, guide and agent fees. —  Admission and fees to included activities. —  Airport taxes and staff travel. —  21st traveler is free.
  12. 12. The Study Tour—  Not included: —  Air travel from US to Mexico (Cancun). —  One meal a day and meals on the first and last days. —  Hotel fees beyond overnight accommodations. —  Personal expenses such as phone calls and internet usage. —  Travel insurance. —  Travel documents fees. —  Cuban airport taxes ($25 CUC) —  Health insurance and immunizations. —  Individual excursions and side trips.
  13. 13. Itinerary (tentative)—  When: From March 10th to March 24th, 2012.—  Visits will likely include: —  Meeting with expert economist for an overview of the Cuban economy, including the recent changes. —  Cuban Ministry of Foreign Trade and Investment for a talk about Cuba’s trading partners and trading opportunities. —  Visit with the Instituto Cubano para la Amistad entre los Pueblos (ICAP), our hosts in Cuba. —  Visit to Cuban Chamber of Commerce regarding the recent adjustments to the Cuban economy, the “new” self-employed sector, and the growth of cooperatives. —  Visit to a Biotech company. —  Visit one of the many city museums.
  14. 14. Itinerary (tentative)—  Visits will likely include (continued): —  Visit tobacco factory. —  Architectural tour of Havana. —  Visit to the Capitol. —  Attend a performance by a National Folkloric Group. —  Visit Varadero, Cuba’s most celebrated beach resort area. —  Visit joint venture hotels and tourism sites in Varadero. —  Meet with tourism officials regarding Cuba’s sun and sand tourism industry. —  Visit the Havana Club rum factory, producer of some of the world’s best rums. —  Visit a food preservation community development project. —  Visit Havana University and the Economics faculty.
  15. 15. Itinerary (tentative)—  Visits will likely include (continued): —  Visit the community art project Muraleando or Coloreando mi barrio. —  Visit Cojimar, the famed fishing village that inspired Hemingway’s The Old Man and The Sea. —  Visit Casa de La Música or Cuba’s Union of Artists and Writers. —  Visit a doctor and a polyclinic. —  Visit the Alamar urban garden for a view of Cuba’s efforts for growing sustainable, local, organic urban farms. —  Visit the famous Colón Cemetery.
  16. 16. Cuba in Pictures

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