Transcripts For CSPAN2 Tourism In Cuba 20170418

Relations under the Trump Administration, and economic prospects for the future. Panelists also speculate whether President Trump will change the Obama Administration cuban normalization policies. Good afternoon everyone. Thank you all for being here. A special thanks to our audience in the cspan world for joining us. This event is being recorded by cspan. Thank you for being here and for the audience for joining us. My name is frank moore. I am the director of the kimberly green Caribbean Center here at Florida University. Our friends at cspan, we are here located at the biscayne bay campus of Florida University here in miami. We have another campus where the center is located in west dade. The center that i direct is one of the institutes and programs or centers at the Steven J Green school of International Affairs and university. We are absolutely delighted to be hosting or cohosting this event. I want to thank the dean of the Chaplain School of hospitality and tourism management, my campton. Thank you for supporting this and this is a great event to have here on your campus. I want to thank another cohost, the Cuban Research institute, the director is here with us today and will be joining the panel in a second. A little bit about why we are here and how we got here. Last year, the Brookings Institution and specifically the form policy team and group and ted picone and the Latin America Initiative team reached out to me to see if we were interested in cosponsoring a study, a study as you all know, one of the more Dynamic Industries or sectors of the cuban economy, and all of this within the context of december 17, the many different changes that have occurred between the United States and cuba since then. Ted reached out to see if the center was interested in helping funding the study, and of course, we reached out and agreed immediately. So, we are very delighted to be very much a part of this study. It was first launched in washington d. C. I think it was december 2 of last year, and so we are kind of doing a miami launch, if you will, of the study with the two authors joining us. Let me tell you how we are going to proceed. I will introduce the two coauthors in a second. They will present the study. There are copies of the study in the back and lobby of the auditorium so please be sure to take one. They will do the presentation for 20 or 25 minutes and i will ask a panel of experts here from Florida University and st. Thomas university to give their remarks, reactions to the study. We will have a conversation appear on stage before we turn it over to you for your questions and your comments. Then we will go from now until 6 00 p. M. When we will end the session. Let me introduce the two coauthors of this important study. First, let me introduce richard feinberg. He is the gentleman right there. Doctor feinberg is a nonresident senior fellow in the Latin American Initiative at brookings and a professor of International Political economy in the school of Global Policy and strategy of the university of california in san diego. as well as the broken Institution Website bookstore website and it is getting some wonderful reviews. A new magazine. And lays out basic guidelines of the study. Cuban trade is the name of the magazine for trade investment in cuba. The author of this important study, the International Growth center in uganda in south sudan. A joint venture of Oxford University cool of economics, it provides it provides independent Research Based analysis at the request of selected countries in asia. A senior fellow nonresident in switzerland, and distinguished Research Researcher at the northsouth institute, and the world bank, and development and international trade, very fortunate to have these two scholars to present their work that span a number of months that is pretty detailed, and important contribution to the challenges to expand tourism, and some of the opportunities. They present their work. Thank you very much for the wonderful introduction, thank you for the welcome to the sharpless school, it is a pleasure to be here. You know you are in the right place when the school of management you are dealing with is located over a wine are. Richard and i are economists that came to tourism through the lens of growth and distribution, we started much earlier in our quest to understand the Tourism Industry. Bearing with us as we pass the baton, to study. First of all if i can get this to work, to study tourism, who benefits . It has become important in the United States because of the recent election and the prospect, with oma issues and the assertion that really doesnt benefit the economy but mainly the military. The question we were interested in was how can the industry be structured for growth. We didnt and it just to be in enclave industry the demonstrated a few people but role duplications that would allow cuban incomes to rise more rapidly than the performance in the past. Short answer to both those questions is benefiting a wide swath of cuban society. Falling behind the caribbean countries operate well short of this potential in our view but one reason is the combination of state sector ownership and regulations that created obstacles for the support industries and Linkage Industries to help the industry grow. We will elaborate a bit. The way this has proven is modest changes in regulation over the last four or five years unleashed a torrent of privatesector activities in britain, breakfast and restaurants and transportation and so forth, that privatesector cluster counts for 30 of the industrys earnings. The government has ambitious plans for the industry. It would like to accommodate 10 million visitors by 2030, that is a big increase, look at the realism of that estimate. Could they do this. It is possible but unlikely unless cuba changes a number of its policies, to promote growth. If i can get the last point to boot up for the United States, in National Interest the United States can move forward with normalization process mister obama has launched already. Let me elaborate on these points. Cuba has abundant Tourist Attractions that could be a driver of growth, dont need to tell his audience that, this is a tough assignment that fell to us when we went there but this is a photo of santa maria in the north coast of cuba and cuba has extensive beaches like this that can be developed further but it has a rich culture inland that merits consideration and development so the opportunity for the industry to grow our vast. Already cuba is booming, this graph simply shows the number of arrivals 1995 to 2015 and they have increased with a little blip in the mid2000s. This graph goes up to 2015. Sally asked me to do a projection based on more recent numbers and that would allow for tourists to reach 4 million by 2016. If you look at the earnings the pattern is much more varied. Earnings very quite widely from yeartoyear and respond to domestic policies. We have seen an important upswing in earnings. In 2015 it is likely to be greater, the industries operating in a higher capacity in part due to the normalization efforts. Quite widespread, one of the major sources of growth in the economy, the principal source of growth in the economy, major source of Foreign Exchange and tourist revenues, two thirds and all merchandise, cuba is a Service Sector exporter, as an economy and plays an important role. 70 tourist earnings stay in the country, a pretty good number. Agricultural products and transport, it is a major force linking cuba, exposing cubans on a daily basis to the international environment. And ample opportunity to grow. And the number of visitors to share the population and indeed relative to the Dominican Republic, almost at 0. 5 of the total population, it is twice what cuba is today so there is considerable upside if you use this measure and i would argue many other measures show the same thing. The industry has not contributed to cubas growth as much as it could. There are times it has fallen behind, this graph shows contribution to the economy. On the far left you see the direct contribution to the economy is 2. 5 of gdp, the travel and Tourism Council numbers, that expands to 10 of total contribution to the economy. The Dominican Republic or costa rica, good comparatives, more that cuba could be doing. This graph shows two things. The bottom line, this is an index in 1995, and lets look at revenue per visitor over the long swath of things, this is an indication of the efficiency and effectiveness of the industry. And the Dominican Republic were developing countries. And the caribbean itself is doing relatively poorly compared to the rest of the world. The caribbean is losing market share to other destinations. Over the last 20 years new destinations of opened up in china and Southeast Asia and africa and as a result, the tourist dollars are spread over a much wider array of countries which means the industry has to be competitive in order to support and prosper. Cuba has more to do with it industries. One of the reasons is if you talk about tourists, poor maintenance, the service quality, the fact that the internet is nonexpensive and awkward. These are things we are working on. Part of the reason for these particular factors has to do with the nature of the organization of the industry and incentives the industry transmits to its workers and management. Let me turn it over to richard who will talk about the organization of the industry and its future that way. Thanks very much. The industry in cuba is dominated by state owned enterprises. Many, three enterprises in the Tourism Sector, two of them are under the ministry of tourism. We also see under the military, we have the third state of enterprise. Only one is the military. These three accounts for 40 of the rooms from the Tourism Sector. And to the cuban military. Is that what this graph says, 40 going to the military. In the private sector, people opening their homes, remodeling rooms and travelers stay at a bed and breakfast. That accounts for 25 of rooms, 16,000 rooms, add that to the total tourism capacity. 25 to 30 of total international rooms, four or five star quality, you might consider staying if you want to do that. And revenues go to the coffers of the cuban armed forces. The other point here, 45 , four and five stars have some foreign partnership, made with us companies and marriott, mostly International Operators that are active in cuba. Most of the hotels out there are international presence. Four main problems the way the Tourism Sector has operated. One, there are in the speeches where the growth is. You dont see many cranes operating in nevada but if you travel to beach resort you will see a lot of creams. It seems odd. Why arent they building more capacity . There are various reasons, 40,000 rooms, in havana. And 400 a night, only three Important Hotel sites currently under construction in havana. It is easy to build boxes on the beach than to do it Interesting Hotel and questions of profitability. Overemphasis on urban sites and elsewhere and spreading investment around the country to ecotourism etc. Second problem, the Tourism Sector needs to be better integrated into the economy. And what percentage of food and beverage, and accountants in those categories, and domestically, that has to do with the sluggishness in the agricultural sector, and would be better integration from the rural sector into the overall Tourism Sector. And in labor, International Hotels do not directly hire labor, labor is hired, Human Resource entities, our government, not directly hire than hotel. The average human voices two pauses. And this Employment Agency is productive from the underinvestment in training. The other point is why not more direct international participation, not just Management Contract but joined ventures. Only about 6000 rooms include joint ventures, the government projected of the 110,000 rooms they want to add over 15 years only about 30,000 of those rooms, under 30 will have Foreign Investment, joint ventures, 70 of the new investment going into the Tourism Sector is projected to be paid with domestic capital. We will explain that. I mentioned the private sector growing dramatically. Anyone who has a house, 15 to 20,000 investment, put up a new room, go on air b b, getting high rates of occupancy. You estimate roughly one third of money flowing into the economy is going to the private sector in cuba. We cannot emphasize this this goes to policy recommendations willake it a bit, but why cutting down visitors, trying to close off the globalization will destroy the growth of the private sector, counterproductive in National Interests. The private sector operates under various disincentives outlined in the report. Im not going to go into in detail now but just to point out there are a lot of reforms that could be made which would provide yet more dynamism in the private sector in cuba. These are two places where eventually there will be plaques, private homes renting out bed and breakfasts, plaques eventually which will say here slept new farmer ed feinberg. You want to continue . Not sure it warranted that. What is interesting about this picture, one on the left, this is a private bed and breakfast, the sign they are advertising is english. I thought it was revealing the new clientele they are catering to internationally. One point, to go back for a moment, should be mentioned here is air b b has set up a program with more than 4000 listenings in cuba and this to me augurs a new impetus to growth because a person can go online, look at the myriad of offerings in havana, get testimonials from people who stayed in those areas and see what the price is, pay with a credit card in dollars and show up in cuba the piece of paper, and happily stay in that place as well. Air b b had a trust problem that links individual entrepreneurs with the global marketplace in the place of cuba and elsewhere. Particularly in havana this is worth emphasizing. Richard thought it would be worthwhile to analyze those plans, and think through the implications of them. Basically the government would expand the current level of participation, the industry of tourism up to 10 million from 4 million at the end of last year. That is a big increase. To do that they plan to build 108,000 do rooms on stock of 8000 rooms of international quality, three or four star hotels in the state owned enterprises and it advertises sites to prospective investors from all over the world including golf courses, marinas and other tourist potential developments. We met with in havana earlier this week we met with the head of the Port Authority and they are talking about doing any number of investments including like a theme park in cuba so there is a lot of broad thinking looking to the future. We wanted to look at its feasibility and economic implications bause the plans you get frequently you dont find much information about the Economic Investment requirements and the like. If these numbers were realized it would given impetus to growth and the history could be a real locomotor, locomotives of the economy, for purposes of our calculations we want to project the investment over 15 years at a steady state of 7 to get that 108,000 additional rooms we talk about including refurbishing depreciation hook up charges and other things so those of you in the Business School in the Tourism Industry will immediately recognize the complexity of this but bear with me for a moment. We put it all together in a table in the report and i will highlight a couple numbers coming out of this complex table. The first is 108,000, the number of rooms they seek to add over the next 15 years or so. The second number is the cost per room which in the United States and europe. And when it costs to build the hotel room, he by the way went to some industry sources, to verify the number, and this performance review. The other things we did, depreciation, restoration is out of order, some of them have large number of rooms which forever reason have not been refurbished. We added normal depreciation and remodeling clause should occur, 30 billion of total investment over the last 50 years to realize this objective. Anyone know what the gdp of cuba is . 86 billion according to the statistics, if you were to apply depreciation to the currency for market based formulation is substantially less, it is a big number relative to the small economy. If you look at the share of gdp, doesnt look to be very big. That will more than triple over the next 15 years if the number holds correctly, if cuba doesnt grow faster than it has the last four if we assume it grows over the last 15 years at 2. 8 more importantly, and total investment, it is not realistic to assume cuba is going to invest 33 33 of its total investment in the Tourism Industry because education needs, and the renovation of these. Under the current circumstances if we get this to work again, under the currencircumances, the industry is unlikely to be a driver of rising incomes without major internal policy changes. The internal policy changes have to focus on two or three things, has to focus on increasing domestic savings. How can it do this. One way is to accelerate the government of the b bs, restaurants and so forth. Similarly it has to begin to think about ways to tap into foreign savings more efficiently than it already has. Foreign direct investment which are very important but more importantly might be savings from the diaspora of the Cuban Community in florida that financed much of the b b development. To structure financial remediation, investment coming from a transition period into housing and expanded Development Might be undertaken without alienating property in cuba from cuban ownership, something we think is particularly important in the transition period but to make this happen, to increase investment, let me talk about policy in cuba. We conclude our study with policy recommendations forgiven government. We put forward some suggestions for them and the us gornment. We hope you find policy recommendations flow organically from our analysis. More Foreign Investment is clearly needed. Cuban government officials want to . 5 billion in capital and flows, and president castro chastised, for not improving Foreign Investment, and why hasnt more Foreign Investment been improved and that has to do with foreign signals from the top, misaligned incentives for bureaucrats and decisionmaking his too centralized. That has to be solved and those are profound problems if they bring in a Foreign Investment which they clearly need to do. The booming bedandbreakfast sector, in the private sector tourism that is emerging showing entrepreneurial capacity of cubans are unleashed. Cubans own legally one house, one beach property so you cant build a chain legally, bed and breakfast, cant expand the entrepreneurial sector in the private enterprise sector. Those overly strict rules should be modified, cubans should be allowed to own more than one home, particularly if they are renting some of it out for income that comes from abroad for foreignexchange. Cuba has to start to build a modern tax system. Many options, valueadded tax, tax on personal income, property taxes as cuba moves toward a more marketbased system. As a way to restrict forces from the Tourism Sector. Those n flows can finance the rest, infrastructure and social services and growth and riculture. Pricing system dramatically out of line, distortions are mindboggling, so much work to do in that sector, prices have to reflect scarcity, market conditions, supply and demand, incentives to export. These seem obvious to anyone who has taken economics 101. To learn all of that. Within the Tourism Sector itself, the current cuban model particularly in the beaches is loan Value Tourism bringing in essentially bluecollar tourists from quebec, russia, other areas of europe, it is good value, not optimal from the point of view of tourism. They need to move from a model of tourism based on value, low cost, higher value, Higher Quality and that means more income per room, and Higher Quality services. Not least is more investment in training to the labor market, and more employees per visitor per client. That is where tourism is all about, of course, Better Internet service, any of you who have been there know how frustrating that is and that is important to the entire economy of course and important for tourists in the business sector or even looking for Higher Quality tourism in the luxury tourism market. And cuba is such a Beautiful Island they can accommodate many more tourists but dont want to ruin the beauty that will attract tourists in the first place. A number of recommendations in that regard, one in, transparency, we have done our best in putting together numbers to analyze the Tourism Sector. A heroic effort, the amount of published data by the cuban government is very thin. Large Stateowned Enterprises i talked about earlier, where is their annual report . With their financials . There are none, the whole idea that the state with responsibility for the population and published data so people can analyze and make decisions on Public Policy needs to be put in place so analysts like ourselves and most importantly the cubans can have a better set of data for Critical Situations with the main reason we publish this paper is to help the cubans themselves begin to think in terms of numbs and strategy so the they can drive a more rational transparent and productive and efficient Tourism Sector moving forward. We suggest one talks about sustainability and beauty and aesthetics, it is about coastal areas, it is also cityscape. What will it look like in 20 years but are they bringing to bear the best possible quality of architect and city planners, what highquality topnotch architect living anywhere in the world wouldnt want to advise what is going to be the new havana . Why not draw on that and set up an Advisory Committee that would still have rules that would be set by the cuban government but would provide top level highquality stateoftheart to the cubans. We suggest us firms going into cuba are to be encouraged to abide by highquality Corporate Responsibility standards. Finally the United States, where we sit today, we fully realize theres about to be an important event tomorrow in washington, not all members of the new Administration May be fully in agreement with our point of view, nevertheless this is our best advice, we think it is in the us National Interests. We were encouraged with the probable next secretary of state being asked about future cuba policy, we dont know where that might land, there are different tendencies for the Incoming Administration, the future secretary of state said he thought first on cuba policy we should undertake a careful review and that seems to be a good starting point in making Public Policy. What we suggest first and foremost, some of you may have seen the open letter published two days ago by a number of business groups including the Cuban Study Group and council of the american society, my name was on that as well. We are suggesting that it would be counterproductive to try to reverse course and once again revert to a policy of cutting off relations and trying to squeeze the cuban economy. Among other reasons aside from united carrying aspect of that, the incipient private sector, the United States on a worldwide basis has only had as a policy to support a private sector for its own reasons but also a private sector will tend to promote a more open economy, more friendly economy to business interests and a more pluralistic and diverse polity internally. For us to cut relations, completely eliminate the flow of travel, etc. Would kill the growing private sector, it would be so counterproductive i cant imagine why he can help them with connectivity to some degree, we can suggest, does it not make sense to allow us firms to provide the infrastructure necessary to support those visitors . You may have seen a paper with bookings in 2011, suggesting to cuba the only country in the world that is not a member of the International Financial institutions, dont we went cuban economists to have the best advice on open marketdriven economy with the experience of so many other countries undergoing transition from a highly centralized economy to a more marketdriven economy. That is what we once. The cubans may or may not accept that advice. They have an opportunity to dialogue those washington dc based, and stand in the way. Finally finally, with regards to Sustainable Development a lot of Us Government organizations on the island, we should promote that occasion. Overall as a wrapup, we suggest a policy of engagement at the governmental level, the level of privatesector business, the level of the diaspora and cubans on the island, the nongovernmental sector, nonprofit sector, the us National Interests to continue that connectivity and communication. Thank you very much. Smack thank you, richard feinberg. If i can ask other panelists to join me on stage and as you come up let me introduce them. Let me introduce doctor maria speed, professor of economics at the university in miami florida, has been at st. Thomas since 1999, she was on the faculty in the department of economics at Florida International university 19851984, a fulbright scholar in columbia and has had several other appointments here in the United States. She is an activist, on Environmental Issues and minority issues, something i respect she does on a consistent basis. John thomas is assistant professor at the chaplain of hospitality and tourism management. John is a lawyer, practicing attorney for 30 years and saw the light it became an academic and now he is fulltime here at fiu and is a partner at law offices, long career practicing transaction and litigation, board certification, maritime law for the florida bar, served as chair the frida bar Law Committee and last but surely not least, my colleague at the main campus, who i introduced, the director of the Cuban Research institute and professor of anthropology came to us a few years ago from the university of rico and his work on migration is known by many of you. Had Research Positions at a number of universities in the United States so thank you for joining us. What i would like to do is have each of them and 5 to 7 minutes, discussion before we turn it over. Let me start by thinking fiu. This is a wonderful report. Many things i like in it. I pretty much agree with all the conclusions but i start with some of the disagreements, things i see that are problematic a little bit each one of the things i thought the report should not have used is the comparison of tourist revenues from country to country. Let me tell you why. The methodology is so different from country to country, not only the methodology but the capability of collecting data from country to country, the comparison is really meaningless or meaningless. With the cuban economy, the caribbean economy, the direct approach to estimate tourist expenditures to take surveys, and international tourists, and leaving the country, cuba does not do that. And different entities, calculate what portion of that expenditure, to international tourists, when we were in a purely enclave economy it was relatively easy, becoming very hard, very hard to determine if we have a consistent series. I dont think it is. Identified three different theories over time and it does not really include things that are not usually included for tourist expenditures, for guidelines for it which the other thing, you never know they are giving you nominal or what Exchange Rate they are using. And that the province level, and some were in pesos and dollars. A couple things, any receipts for anything including comparison to gdp, im not sure it is overestimated or underestimated, and it seems to have been for a couple years. That reflects the poor quality of Tourism Industries and i agree with you, the quality of the tourist industry. And a different measure, for tourists, we have a shift, we had a shift in the last we 10 years, the European Market, the European Market was american, to be substituted with canadians. And cubans living tourist calculation. To leave it out, and in this e, and talk about it later. And the using of cuban gdp, and its own methodology, and whether it is a better methodology, i am not going to argue, not be compared to anybody else which and using the percentage of direct expenditures, and the gdp, in the numerator and denominator, the comparison, i would be weary about that. And it is not a concern, the idea, the use of the revenues coming in, the vintages effect, you estimate only a 30 , 30 import component and that seems very low. Back in the mid90s there was a cuban publication that i cited in some words, that estimated it to be around 70 and i tried to keep track of what has happened since then and the only thing that has been published is a got a little bit better and i agree with that. The private sector is driving but i cannot believe it is that much better. A little concerned about that. Imac emphasis on the concept of the multiplier, using not only the direct, and talk about what comes first, the chicken or the egg. The concept of the multiplier rests on the idea that the man creates his own supply. The supplies forthcoming. And in all the sources, what we are seeing now is instead of creating because of the restrictions, and in price and food prices, a negative social effect, increasing the housing process because there is no way of producing more in that production. It is an idea, and sustainable tourist growth and development, both work at the same time. The increase in expenditures with more tourists coming in with reform in the system that allows for the supply to actually be creative. One more thing i am concerned, i am too sort of but cuba has an incredible housing shortage, and because of the households, being open to multigenerational, the kids coming in. And renting rooms, and exacerbate a little bit of this and could result construction and in the housing sector. Thank you very much. You did a wonderful study but is that all there is. I hope not since now that i am an academic, more things to study. I have four more, two of which you touched on in two did not so first i will talk about tourism and cuba. The Chaplain School of hospitality, a school in china so we are familiar with their influence on tourism around the world and we are very connected to chinese influence. Few cultures are more diametrically opposed than the Chinese Culture and cuban culture and you got to wonder why do i think this has anything to do with cuba. In havana, approximately 150,000 chinese living in cuba. Now it is down to a couple thousands, and still exists and there is a great deal of cultural connection between the socialist regime in cuba and the socialist country of mainland china. Is china actually doing anything in cuba . They are. They up to 12 visited cuba, it is important for the president of china to have visited a couple years ago, the premier and vice premier in havana. Three Chinese Navy Ships paid a visit to this is not something they do all over the world, they used chinese loan money to build the seaport which is being built by the Chinese Communications contracting company, they are Building Infrastructure in cuba. Railroads, communications, they are now currently building, find the correct number here, 13 Chinese Hotel and results currently under construction by chinese companies, not that they are going to run the hotels or own the hotels but they are building the hotels and that exceeds 416 million in Chinese Investment and there are multiple numbers of golf courses being built by the chinese in cuba. There is a direct flight from beijing to havana. Once a week now, they plan to make a three times we can bring a lot of Chinese Tourists to cuba. There will be chinese visitors, tourists to cuba in the university of havana and there are Chinese Students studying there as there are here in miami. Cubas after venezuela fading fast, second largest trading partner is china. The Chinese Military government Hospitality Company has produced a promotional video with chinese subtitles showing Chinese People in 5 dark hotels and chinese food. They are interested in the chinese market. Why is it important in the discussion today . Because it is uncertain from a us policy what the future of american tourism and Hospitality Development and investment will be in cuba. Im bringing up the possibility that if there is a vacuum it may well be the chinese influence in cuba. One other type of tourism you did mention is the cruise ships, cruise ships are the easiest type of tourism to take into cuba and i looked on todays was sick of cruises in cuba, i saw 6 different cruise lines scheduling cruise ships going to cuba. They would like to stop there. 19 ports, not big ports, not ports with big peers that can take large cruise ships, 19 ports available for stops in cuba, rightful cruiseship operations, cruise ships bring the rooms, their n food, the tourists will go ashore and visit and go to cultural places, food and dancing and other activities, we have the american restriction against americans traveling as tourists so even with those restrictions there is a great deal of possibility for groups, Tourism Development very quickly and cuba. I am sure cruise lines are looking at this and it deserves more study. Medical tourism, a great deal of medical technology. They have been exporting medical tourism, and medical devices to the United States, little known that they do. Im not sure what will happen. It may be going to cuba will involve people looking for healthcare. Just bring that up. The fourth topic that you didnt mention, the Agriculture Sector for cannabis. People arent talking about marijuana tourism. There is a market, the possibility for quick growth of that type of agriculture in cuba and anecdotally, there is evidence of cannabis in cuba, latin american countries decriminalized, 30 states have to what extent or another decriminalized marijuana for medical use, the next medical tourism i dont know. Another aspect of tourism needs more study. [applause] was that applause for the cannabis for the presentation . Hopefully the presentation. Jorge. A minor personal comment on the report which refers to morality. I am a little insulted. To the attributes, morality, it is a little exaggerated but the mic closer. In the 1990s after the disappearance of the soviet union and the fall of the berlin wall. Until recently the export of medical services to other countries. I think the authors have done a great job at describing and analyzing a host of different sources of information on the structure and composition of the tourist industry in cuba. I havent seen anywhere else the kind very detailed observations about the composition of state owned and private sector and the Tourism Industry as well as so of the Economic Significance and the projections of these data. They have scanned official sources of information. I agree with the professor is difficult to compare to that but thats whats available. But they also went further and interviewed the owners of private bed and breakfasts, family restaurants, visited many of these Hotel Facilities throughout the island and contacted experts on these topics. I think theyre done a really good job by putting it all together in one place. And i congratulate you for that. They also i think provide uptodate and balanced perspective on what may be the future growth of the industry, particularly the combination very strange combination to some extent the private public facilities on the island because of course many of the privately owned restaurants and bed and breakfasts are, in fact, connected to the government industry, and many people have thought peter independent businesses but in fact, theyre very much connected to the rest of the economy. They realize that quite clearly. Their analysis suggests an order for cuba to fulfill its own projections, it will have to raise 33 billion to invest in Tourism Infrastructure and improve the quality of its facilities and services, and attract a growing number of tourists in the next decade and a half. The question is where is that money going to come from . They have some suggestions in the report but at this point its very difficult to image that cuba will have access to the kind of solutions of credit to expand its financing to tourism. I think the report is quite optimistic and assessment of its present and future temperature contribution to the islands economic tillman. Element. Not only in terms of Stateowned Enterprises but perhaps more importantly to the nonstate sector, the selfemployed sector. The authors have done a great job of steering away from strictly Political Considerations in their very balanced analysis. Different policy options. They do go into some of the possibilities in terms of what the future may bring in terms of use cuba relations, terms of possible transitions in the cuban government. I think thats not really in the report but, of course, a year or so from now we do expect major changes in alleys the personnel raul castro has announced he would retire from the presidency. They remain cautious with regard to the possibility of ending the u. S. Embargo of cuba, which limits clearly the benefits or the potential growth of Tourism Industry. I just want to end with three major areas in which i think there might be some discussion. First of all precisely i think the elephant in the room is really the embargo. Although they do refer to the embargo, i think at this point its quite clear that the bargo will not be lifted in the next four years, not with Republican Controlled Congress and not with donald trump in the white house. Although again i would be the second part of the discussion, which is given the fact we expect changes in use policy towards cuba, although we dont know exactly what that will mean, once the Trump Administration takes office, it will could have an impact on travel to cuba and will probably mean a restriction, growing restrictions on the number of people based in the u. S. , u. S. Citizens who can travel legally to cuba. Although again we dont know exactly what kind of quality measures will be taken. The cubanamerican sector of this travel industry will continue to expand. Its difficult to imagine that the Trump Administration will restrict the number of trips a cuban americans might make, but thats also a possibility which has already been put in practice by george w. Bush. So i think the main problem that i want to raise is what exactly will the scenario b or any kind of future, potential growth of the tourist industry if the u. S. Tourism market is not open . So under those conditions, in other words, if more u. S. Citizens who are not cubanamerican are not able to travel to cuba, then where does the growth come from . And the subtitle of course suggest that it will, the writing way to phrase towards asperity. Prosperity. We should talk about what the cuban government might do to make it easier for cubanamericans who wish to come the cuba and, of course, the numbers are quite difficult to get. The last figure sightseeing suggest anywhere between 300,000400,000 cubanamericans have traveled to cuba in the last year. Many more than use citizens are not of cuban origin. I think thats where the main sector of any future growth will live. I try here on my own personal experience. For instance, why is this a difficult for people who want to visit cuba who were born on the island to get a passport, to get a visa . Why is it so expensive to do that . Last june also saw the controversy about whether cubanamericans could go or not on those crew ships. If cuba is serious about expanding its tourist industry and given the fact that politically speaking, i doubt that more u. S. Citizens who are not of cuban cuban origin will not be able to travel to cuba easily come tomorrow. And i think the main chunk of the market will be cubanamericans, and cuban born people in other countries. Reducing the costs of these transactions, perhaps even not record any kind of visa or a a cuban passport for those of us who were born in cuba. Other countries do it and it seems to work quite well in order to attract the kind of diaspora tourism as its been called in the literature. Thats one area that needs to be discussed. The final point is, the report mentions, the estimates of cubanamerican remittances to cuba are difficult to corroborate come anywhere from 3 million 3 billion 5 billion had been put out there. The question for me becomes how can you harness those millions and millions of dollars that are being sent to cuba so that they could be used productively in addition to solving immediate household issues, which we know are very important, food and housing and other com and medicine, but also as we know him from it because s difficult to get that kind of data, a lot of this money that is sent to cuba is being invested in the bed and breakfasts and the taxi drivers and so on. What kind of policy measures would be appropriate to induce more of that money being invested into the trust interest to . So those are my comments. Great. Thank you very much. [applause] so if i can ask the authors to briefly respond to anything that our panelists have said. Why dont we start with you, richard . First of all on behalf of both of us let me thank all three panelist very much for your very thoughtful comments. You clearly read the report very carefully and took it to heart and very much appreciate the thought you could give two responses. Ill let which respond to many of the comments on use of some statistics, but we did what we could with the available stats that richard can amplify on that. You didnt dispute our basic conclusions i believe, so thats heartening. [laughing] on johns comments, on the point about supply restraints, of course one of in our report very much emphasized that, thats the link between any sector including the Tourism Sector and reform needed throughout the economy. Thats a major thrust of the report, and we fully agree that it would release the supply constraints, many reforms are necessary throughout the Agriculture Sector and the housing sector, et cetera. On johns comments about china and, dare i have to say if i can advertise again my book, on for business, building a new cuban economy, i do have a section there on china with many other themes that you emphasiz emphasized. I met from time to time with the chinese authorities on the island. Debris much to commend his expansion in chinese and other asian tourism, already you can see in havana. I had to say that my own view of overall u. S. Hemispheric relations is, this is not the time to try to pull back and antagonize in the hemisphere, winter is obviously another emerging great power who would love to fill the vacuum. Surely, surely the Incoming Administration understands this and will not make false steps in that regard. So i completely agree. But in any case china, so if the United States restricts our tourism that will slow the growth of the Tourism Sector, but will it stop it . Theres a hold of the world out there. You have more european tourists coming actually from many european countries, in part because of the parts of the mediterranean are not as secure and safe as they were ensley have a displaced it there. The cubans are making a big effort to draw more latin american tourists and weve seen some of that from argentina, mexico, brazil. Asia is that they growth market, and that is already happening and will continue to happen, as you pointed out. So i couldnt agree more about that. On the issue of medical tourism, course or Something Like 40, 50,000 medical personnel working abroad now as a major income or pick me up and should be able to stay in cuba and provide medical assistance on an international basis. That would require Better Internet connections of course another facilities, but that is a longterm vision actn of the Cuban Medical Services as you probably know. I think eventually that will happen. Whether or not that is linked to canadas tourism would require a dramatic change in cuban policies i think cuba is very hard lined on use of illegal substances cannabis you dont want to be caught in yuba in any way linked to Drug Trafficking or use. Youll get a very rough prison since. I dont think were likely to see that in the near term. But certainly i think the idea of increasing medical tourism as tourism in cuba becomes not so much, so heavily, a major part of our study, sun and surf is fine that they can dramatically diversify their tourism offerings, crew ships, adventure tourism, but also certainly medical tourism. Then finally jorge, thank you so much for many of your thoughtful comments. Just responding to two of them, richard address other thoughts, on this issue of where part of the 33 billion would come from. What our suggestion is direct investment as opposed to commercial credits. We know of Many International hospitality firms that are dying to set up joint ventures in cuba, and for reasons that are hard to fully comprehend the cuban democracy is dragging its feet. But yes, rather than, they can take on some debt, rather than debt financing, direct investment is what were suggesting to cover parts of that 33 billion projections. The final point that i would make, yes, absolutely agree, the aspirin makes so much sense as an expt of course diaspora there we suggest some of the restrictions on investment in the bed and breakfast sector or in the real estate sector could be modified in ways which would encourage both National Investment as well as the aspirin invested so thank you very much for all those comments the aspera. Yes, let me echo richards thank you and appreciation for these comments. I think they are really terrific. Just to pick up a couple of them in order, professor, couldnt agree with you more, the data are miserable. We spent many sleepless nights just trying to record accurately the number of arrivals which wouldve thought would be fairly basic. In fact, richard and i have for long time for discussion about how Many Russians are coming into the cuban economy. He was wildly overestimating by the way. In any case the data are difficult. That said, i think as you yourself said, some of the basic conclusions prematurely even if you just 20 off for 20 down. I dont think this industry is doing very well relative to other countries in the caribbean. They havent upgraded as rapidly as they could. Their strategy is i think at least as richard said in discussing the beach boxes, maybe a little underdeveloped because in party does recognize at all the emerging private sector and get that could be important part of this. These things we all agree on. A couple points that maybe i would just pick up. One is the linkage affects. Whether or not the industry is so important intensive as it was 20 years ago, today i dont know. Im somewhat skeptical of that. I think 70 import coefficient coefficient would be extremely high. I mean, youve got the economy as a whole of course we dont know what imports to the total economy are because the gdp numbers are sort of messed up. Actually the import accounts are messed up, too. If you use mirror daily you end up in an entirely different place. I could go on for a long time about the inadequacy of the data but i think the conclusions are pretty robust. 1. 0 would make that a think is important here is the role of the b bs and the housing shortage and how to think about that. You could also think about it in terms of the competition between the industry for food and the domestic clientele for food. The name of the game is changing policy to expand supply and grow more rapidly over time. That includes housing as well as includes domestic food production. So the trick i think from a policy maker standpoint is to sign a transitional period when you can both expand the supply of the tourist industry and the b b industry on the one hand, and expand the supply on the other. You cant do with only 10 of gdp investment rates which is what they are now. So to do that they have to change policy and a think the kind of policies outlined in the report are the way to go to deal with the issue of the supply. Your point is well taken. The transition has to be managed carefully to avoid addressing backlashes. Let me pick up just a couple of other points. John thomas suggestion, a number of areas, i have a different view of richard. I think we should study the marijuana industry. I think this will come back with a proposal, following up on studying beach tourism. The sounds to me to be the next logical step. California is moving bigtime into this industry. Uber will have a hard time i say that all ingest, please. What would be the effect to increase travel restions . That is an interesting question. He had to put this together in combination with our speculation and it is only speculation with the future course of u. S. Policy would be. If the future course of your spouse has to do with some a travel restriction on the one hand, but combined with a very substantial macroeconomic statements which of course the president elect has promised, you could see a very strong growth impulse, and this is what the markets are telling us will happen, to the global economy. When that happens, that means rising incomes in europe and asia, and other parts of the world. All of which will generate more money that will be spent in the tourist industry. Im sure that will make his audience a quite happy but also make the cubans happy because there will be more europeans and Chinese Tourists coming to the region. One of the things that smh me when you look at the numbers over the last two or three years is that since brexit you have seen no appreciable fall in european arrivals come into cuba, which at this may be a result of early contracting, who knows what, but we dont see with the depreciation of european currencies even preceding brexit a major downturn in europeans coming to the cuban economy, which is a good sign. I think its an unlikely to increase with rising incomes associated with a trump lead stimulus. The final point i want to make goes back the issue of investment in cuba. And tap into the enormous potential wealth in the miami committee, the nice instrument and also in europe, to invest in the bedandbreakfast and salt in part the housing shortage. One thing cuba lacks a course is any kind of a Mortgage Market your if you were to suddenly liberalize complete the cuban economy and prevent Foreign Investment, i would expect half of havana would be immediately thought that. Why . Prices are so low right now in nevada. Youll find a lot of illicit Foreign Investment come into havana. If there were a way to set up a mortgage facility that would take through bond borrowing, lets eat into the miami market for the European Market, put it into mortgages for the expansion of domestic housing which would allow those households to borrow in, would be at international rates, much cheaper than what is available in cuba, they could expand the housing market, maintain ownership and could be a very highclass debt obligation in the u. S. Or foreign markets. Its worth thinking about. Im sure theres some financial engineers in the audience that could set up this kind of arrangement and i think it would be extremely valuable for cuba over the long run. The final point i want to make is all of the discussions that we focus on here on u. S. Policy are really only a small part of whats going to affect the industry. Whats going to affect the industry over the long run is cuba policy itself. Cuba controls its own future in this regard, irrespective of what the United States, should the traded canada for some difficulties for the industries development, particularly cruise lines and some of the others but, frankly, if cuba were to liberalize it could swap any effects coming out of the Trump Administration. Thank you gentlemen. [applause] so we are not at this stage of question and answers. Weve got 30 more minutes. We have microphones on this side, both sides so please you have to come up and make sure that our friends in cspan can hear. I have just two requests in terms of your questions. One, if you could identify yourself whichever way you want, and since we want to make sure that everyone has a chance to ask questions in the comments, please make your comment or question as brief as possible. Let me in advance apologize for interrupting you if you go a bit too long. Okay . You have the mic. Thank you very much. My name is nicholas sanchez, Professor Emeritus of economics at the college of the holy cross. And i will have three very brief questions. I was surprise really very surprised that in your presentation your graphic presentations, you do not show information for puerto rico. And, of course, it appears to me to a great extent, puerto rico is really the big elephant in the room. And the reason for that is because i would like to ask my second question, which is do you think it iin the National Interest of the United States to support puerto rican tourism cracks rather than tourism to cuba. I mean, you have heard trump talking about america first, right cracks and i think even trump knows that puerto rico is part of the United States. [laughing] so the idea that this would be in the National Interest of the United States, when puerto rico is having such a difficulties is really difficult for me to grasp. My third and final question has to do with the comment on taxation in cuba. When i visited cuba a few years ago, i talked to everybody there and i said what are your taxes like . And everybody said there are no taxes here in cuba. So the government apparently has this huge expenditures and there are no taxes. My own calculations about taxation in cuba, is that it runs from 7080 of personal income. So are you trying to talk about taxing the cuban people even more . Thank you. Thank you. Richard newfarmer, why dont we start with you . These are great questions. Why not puerto rico . We just had to pick a number of other countries. We looked at the Dominican Republic and costa rica because, and put them in many of the grass simply because they were similar in size and similar in structures. Thats the first point. The second one was the cubans themselves are quite interested in the costa ricans and the author be interested in the domican republic. So taking your point that professor espino made, the numbers on the comparisons may be a little funny. The fact is cuba has a lot to learn from those two countries and probably has much to learn from puerto rico itself. Certainly in terms of debt management. So that point is well taken. The point on taxation, your absolute right that taxes are very high. The tax system, the point we make in the report, is very insufficient. Or its a funny set of taxes that come valid on the one hand, state enterprises contributing surplus to the treasury which is reallocated on the other for the multiple Exchange Rate which is an extremely expensive and difficult system to both administer and to collect taxes from. Its terribly inefficient if we havent talked a lot about the multiple Exchange Rate dual currency system but it really is a major shackle and weight around the neck of the cuban economy. You are absolutely right, tax modernization as richard pointed out is really quite important. We are not suggesting u. S. Government support as in subsidize u. S. Relations with cuba. We are simply saying that u. S. Government should not impede relations. That is, freedom of travel and askeas mr. Tillerson has a think often argued, economic sanctions which are not multilaterally enforced are not likely to be effective. So thats our arguments. Anybody of the other panelists want to react just quickly . The mic. One of the things, i dont see puerto rico in cuba competing. They have very different type of tourism, primarily. The Dominican Republic, jamaica are more like the competitors for the type of tourism that cuba has. As a matter fact one of the things i think that cuba is missing is the type of tourism that puerto rico haskin which is a mixture of the beach and the urban, one next to another, and a noninclusive type of deal. They will only get that if they develop that also some social constraint, some environmental constraint, and theres plans to do that but i think thats going to be very longterm. Until they do that theres no direct competition between tourism in cuba and tourism in puerto rico. And let me just add on that that i think one of the things that might be very beneficial when we talk about tourism in cuba is not to lump all the tours together, recognize or that were talking about complete different products. The people who come to the all inclusive are different from those are going to havana, different from those going to tourism, differ from those going to medical tourism. So in each one of these yet different competitors. I dont see one competing with the other at all. Just like i dont see them competing with miami, which is a complete different type of tourism. Thank you. Please, go ahead. Hello. My name is chad. Thank you all for coming today. The report was very informative and on behalf of the crowd we appreciate your insights. Im wondering if you see any tension between the growth in the private sector and the state sector tourism as it relates to competition for resources like food in cuba, or tourist dollars and attention . And if so if there had been any new restrictions orroposed restrictions on the private sector growth, other than the limitation on homeownership that you mentioned . Thanks. Thats a great question. Like in new york city, for example, a lot of hotels are upset at airbnb because they see competition, direct headtohead competition. By and large thats not the case in cuba, and the reason for that is that the Stateowned Enterprises are not Building Hotels fast enough in the urban areas whereas the u. S. Travelers are going. So the private sector are filling a need to increase supply and theyre doing it in fact, in a costeffective way. Which are providing first quality. At the state owned restaurants cannot provide. So there were a number of newspaper articles that suggested that the private sector in cuba was being squeezed by the government so we were just there a few days ago and i met, made an effort to try to find out what was the truth to this. There were a couple nightclubs and restaurants, high profile that have been shuttered by state inspectors. You dont see as many food and investable push carts on the streets that you saw before, but on the whole, the private sector is booming in cubaand i saw and had the opportunitto see many new restaurants, new nightclubs, not enjoying myself, just doing research. So i think really, on the whole despite some crackdown, of course the inspectors in the private sector, most people in cuba referred to as parasites and theres tension there. On the whole, i think the private sector, january 20 continues to expand in a healthy way in cuba lets go to our next question. s im center shave with the qe journal. My first question is very quick, does anybody have an update on club creditors, have you been able to find anything on that . Second has to do with the seating of reforms, more advanced, capable economies in support of the imf and world bank struggle with one or two of these problems simultaneously, that is unification, agricultural reform, labor reform, attracting Foreign Investment get its just bewildering, where do you start . If you are cuban, here in the government, can you take a guess at where you start . Thank you. Ill let richard handle the easy question of this one. Which is the one that hes written actually a paper on and ill preempt him saying that which is a good paper so you might take a look at it. Where do youstart . Thats really the tough question that they have obviously been struggling with. One place i think to start is of coue liberalization in agriculture, theyve made some tough moves in that direction. Theyre worried however about rising food prices and what the impact will be on urban labor in the cities, if you dont adjust wages at the same time so if you begin to unify the currency and eliminate the multiple Exchange Rate system, youve got to raise wages. This entails inflation and redistribution of income within the society, winners and losers so it has to be managed very carefully. The second point i would make is that it has to be part of a coherentprogram , thats administered over a period of three or four years and theres going to be a lot of it and starts in doing so and weve seen in poland or even the chinese unification of currency way back in 1994, which is arelatively smooth story , that its a complex process. The third point i make is that growth is really important. If you can get your growth rate up from its anemic rate of now, this year is a recession so its a terrible time to do any reforms but if you can get your growth rate up from the average recently of lets say 2. 8 percent up to five percent, it makes it really much easier to lubricate the process of reform and do this reallocation process, thats the reason why the Tourism Industry is so important because if you can liberalize the Tourism Industry, get growth, link it to agriculture, then you can begin to do some of the other things that they very much need to do. To my surprise, they have been able to lay off people in the publicsector quite dramatically and created all this , something that is not committed very nicely and richard book and when they have done that, to my surprise its been absorbed relatively quickly. The cond surprise i thin that we have is that unification of the Exchange Rate may be a lot easier because they are already , they produced multiple Exchange Rates, not just one to one or 24 to 1, now you find up to seven different Exchange Rates in the system. That helps make it a little bit easier so they are moving slowly, wed like to see them moving faster, getting the growth rate up is important. External help, to the end extent they could be helped by the ifis, they tried to make some incipient moves to join the congregation, the caf which is a first step toward multilateral, that would provide an enormous push. They would be awash in money from donors if they had a coherent program that donors could support. All the comments. The relationship, the historical credits. Fidel castro had a cavalier attitude toward toward International Borrowing and any number of times, he made the payment when governments would come to him and say how about payments on the credits we extended, he would say oh, contract . How about International Solidarity . Is that sufficient payment . Very cavalier so cubas Credit Rating was on the floor and when castro came in he said look, he said this very publicly, were going to be more serious now about our International Credit. Were going to make our payments on time and reestablish regularly our International Credit and he sat down and the first step is your question just, negotiated for, or renegotiated official credit. Some dating from the cold word. , others more recent and mostly International Creditors, official creditors, they have renegotiated in the context of the private terrace club. Cuba is now so far making payments on that portion of the restructured debt that it agreed to make paynts on a couple hundred million a year. Its not a lot of money for a normal economy but for an economy which struggled so hard to export, he was merchandise exports are under 5 billion a year. Guys, any mediumsized American Company produces that much in annual revenue. But they are making those payments so far. Now then you have a question you asked about the london club which is credits owed to commercial enterprises. To my knowledge, those negotiations have not reached any conclusions as of yet. Cuba can still not really borrow on private credit. Any credit might receive from suppliers are shortterm and very often linked to direct external earnings, which is to say an escrow arrangement because the Credit Rating is still not high and even the current crunch the economy is in, theres reason to do that in venezuela and several places, etc. I think hugo will continue to struggle to improve their Credit Rating. Yes, my name is mayhew and im a phd student in anthropology here at fiu. I have a comment about Racial Equity in the Tourism Industry incuba. This is a significant issue, it is well documented. It is a concern of groups on the island and in the diaspora that in terms of who is getting the job, whether it be the tour guiding jobs or picketing positions in hotels and other aspects of the Tourism Industry, there is a lack of representation of african and black cubans and some of the best jobs in the Tourism Industry so i havent had a chance to read the reports very thoroughly but i didnt see any mention about inclusion and equity in the report and if you want to comment on that, thank you. So this is an issue about Income Distribution that one has to think about very carefully. Because it can be twisted in a way which im sure you dont intend it to be used. Some people on the island, the hardliners, they say look whats happening, we are introducing market mechanisms. We are allowing more tourists, thats generating inequality, therefore we should go back to the old way of the centralized socialist system. Poorly i would hope you dont mean to suggest that. So yes, how does one deal with an economy which is becoming more diverse if id and with more market mechanisms, investments which will generate me inequality . You go back to a completely directed mandate of economy or as we suggested before, do you think about introducing various incentive structures, tax reforms, labor reforms that allow you to combine greater efficiency while you try to meet your equity . With regard to issues of inequality on the island, most, the bulk of africanamericans, to your point about these things being welldocumented is not correct. I note no numbers in the last 10 years that really layout Income Distribution in cuba. I have not seen them, there are no surveys that ive seen, if you have some idea interested in seeing them. There are anecdotal reports but numbers, i dont think we have. Certainly the eastern part of the island, the more afrocuban has fallen behind. When the revolution first occurred, in santiago, up in the hills of sierra maestro, the government tried to redistribute money away from the data into the provinces but in recent years thats been reversed. The wealth once again, dynamism of the private sector and tourism, partly by the way because of us laws. You have the people in cultural tourism, that means it starts staying in havana and not traveling around the island which is more difficult and less easy to document than youve done with this cultural urban tourism. So on the eastern part of the island, one of our governments and diversified tourist offerings has been suggested by some of our commentators, that would move it into the eastern part of the island where you would naturally get a pickup in hiring on the afroamerican community. Absolutely. Is there as much racism as in i would say probably not but certainly there is no a lot of it. Some of that has to do with the left over stereotypes etc. If you have American Hotels that are allowed to go in, right now what leverage do we have . The issues that youre discussing. If you had American Hotels investing in cuba, then one could suggest that they themselves as well as suggested by the Us Government, that best practices including Corporate Responsibility would bring into play gender equity and antidiscrimination standards. Do you want to address that in any way . Just to underline the last part of your comment which is in addition to racial inequality which, even though we may not have statistics i think all the evidence suggests that it has increased over the past few years or so in conjunction with the rise of the Tourism Industry but i think you explained very well that much of it has to do with the regional imbalance. To the extentthat the tourist industry has been concentrated or reconcentrated in havana , we are just back from this so we can talk about it personally, there has been less of the province where you have larger responsibility of the cuban people so theres a correlation between race and region that is quite perverse in the way the Tourism Industry has favored the western provinces. So we are running out of time, we have two questions. Whydont we take those two questions now , go ahead. My name is mohammed muzzy, head of Digital Marketing with the hotels. One thing you guys touched on was the sector impacting cubas tourism. A few months past they had a baseball game there so do you guys see whether its baseball, basketball having an impact on cubas tourism . You have a question . Great. My name is greg so lonnie, im a hospitality student and i have a few questions but i could shorten it too, for the sake of time. When i saw that all the outline for what you recommend both cuba and the United States go forward to help improve the growth that we are seeing there, my question is at least from a policy perspective you see in the future cuba starting to adopt or do you consider like once cuba has a few systems in the 80s where we would have open free trade areas but not the entire island itself in order to facilitate the group growth of the private sector. As a hospitality student and someone who inspires to create an open my own businesses in the future, how hard would it be what barriers to entry do you see right now for many business peopleduring the United States who want to start their own venture. Thank you. All right. A terrific question. To the sports question, this is an important thing culturally. Fidel himself was a baseball fan, one of the things that led to the breakdown in the us relationships in the very early days was when the Us Administration unilaterally prevented Major League Baseball from having expended exhibition matches in cuba. As i recall the story. I think theres a whole new area, to the extent that there can be increased commerce and interchange between the two countries, sports is a really good form of engagement that would win the hearts of both sides of the florida straits. The issue on whether or not these special Economic Zones could be as they were in china a vehicle for initial liberalization, you may be beginning to see part of that in the court area although i think the problems are quite different and ultimately probably will have to take a different course of liberalization. I go back to the question about where do you begin first, i think you got to formulate an overall Macro Program at the serious program that adds up, secondly you need to have somatic deregulation, start with a negative list rather than saying cubans can do these hundred 92 countries, hundred 92 activities, say cubans can do anything they want in terms of economic commerce accepts the following several things. That would i think leash a torrent of private savings that is now hidden from the uses that would be coming in to spur investment so deregulation is the second part of the story. I think liberalization, gradual perhaps combined with programs to support the court so there are a lot of poor people in cuba and i think to the extent that there has to, you have to use the National School policy to compensate losers in the process of reform, programs have to be through to make that happen. Cuba is in a position where it can do this because it has the administrative apparatus and the knowledge of its workingclass and people that it can set up these programs so i think focusing on the negative list of deregulation and twice liberalization is wasted to solve some of these problems. This is our last shot, so let me want to again thank i you and our sponsors. The palatal is in particular very thoughtful and exciting feedback. On these particular questions. In terms of the cuban divers defying its economy and diverse of finance offerings, sports of course is a very exciting athletic in cuba and the creative industry, music, dance, art, architecture, tremendous talent in cuba that will hopefully grow in cuba and have more of an international across the straits trajectory. With regard to americans investing in cuba, the official cuban position is that us citizens can participate in the cuban economy like any other citizen from any other part of the world, they have to go through this elaborate and earn some approval process. There is no discrimination against us citizens in general, maybe some us americans but the major restriction is on the us died, even under obama regulations, most if it is from the us side would be prohibited so my last point frank, here we are january 19. I have to speak with the panel in saying the thrust of our study is that the interaction that the United States has by and large advanced us interests in cuba, has advanced us interests, has helped promote an explosion of private independent Economic Activities on the island, its a tremendous sense of excitement and entrepreneurialism in cuba today and the us purposefully destroyed that with the tragic and counterproductive, not only for the us book for cuba National Interest. Please join me in thanking these. [applause] and our three commentators, thank you so much and thank you all for being here and thanks to the cspan audience for joining us. Again, thank the Brookings Institution for allowing us to partner with Kimberly Greene and the Caribbean Center. Follow us and look at the programmingwe are doing at the center. We have twitter and our website and we hope to see you soon at another event, thank you so much. Join us later today when President Trump travels to kenosha wisconsin, he will tour the snap on tool company and sign an executive order making changes to the h1b visa program asking the Homeland Security and the state department to propose new rules to combat visa fraud. Watch that live 3 20 p. M. Eastern on cspan. The museum of the American Revolution in philadelphia opens wednesday. The anniversary of the start of the revolutionary war. Watch our live coverage of the ceremony starting at 10 30 a. M. On cspan2. Pictures include joe biden, historian andauthor David Mccullough , the American Revolution president Michael Quinn and a journalist and author Cokie Roberts plus musical performances by the philadelphia boys choir and sidney james harcourt, and original cast member of the Broadway Musical hamilton. Watch the opening of the museum of the American Revolution live wednesday at 10 30 a. M. On cspan2