Joining us. My name is frank mora. I am the director of the kimberly green latin america and Caribbean Center here at Florida International university. We are, for our friends in cspan, we are here located at the biscayne bay campus of Florida International 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 of programs or centers at the stephen j green school of public and international affairs, again at Florida International university. We are just absolutely delighted to be posting or cohosting these events. I want to thank our dean here, the dean of the Chaplain School of hospitality and tourism management, mike hampton. [applause] thank you for supporting this, and thi this is a great if it to adhere on your campus, right . Also i want to thank another cohost, the Cuban Research institute. The director is here with us today and will be joining in a second. A little bit about why were here and how we got here. Last year the Brookings Institution, specifically the foreignpolicy team and group, and ted picone, in the Latin America Initiative game, reached out to me to see if we are interested in cosponsoring a study, a study on as you all know one of the more Dynamic Industries or sectors of the cuban economy. And all this of course was in the context of december 17, 2014, that many different changes that have occurred in the relationship between the United States and cuba since it then. And so ted reached out to see this and was interested in helping us funding this study and, of course, we reached out and agreed immediately. And so we are very delighted to be pretty much a part of this. The study was first launched in washington d. C. , i think december 2 of last year. And so were doing a kind of miami launch, if you will, of the study with the two authors who are joining us and you will hear from here very soon. So let me tell you how we are going to proceed. Here i will introduce the two coauthors here in the second. They will present their study. There are copies of the study, by the way, in the back in the lobby of the auditorium. So please make sure to take one. They will do the presentation for about 2025 minutes and then i will ask a panel of experts here from Florida International university and st. Thomas university to sort of give the remarks, reactions to the study. We will have a kind of conversation up here on stage before we turn it over to you for your questions and your comments. And then well go from about now until 6 00 when we will end the session. So let me introduce the two coauthors of this important study. First, let me introduce richard feinberg. Hes the gentlemen right there that you see. Dr. 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. Previously, dr. Feinberg served as special assistant to president clinton for National Security affairs and senior director of the National SecurityCouncil Office of Interamerican Affairs back during again in the clinton administration. He is the author of numerous books and works, too many to mention here, but there is one daughter want to mention. Its really his most recent book, open for business, building the new cuban economy. Here it is. Its available both of course at amazon as well as the Brookings Institution website bookstore website. And its getting some really wonderful reviews. And hope you get a chance to read it. Also richard has got this a sort of the plug for a new magazine, new magazine, cuba trade. Richard has a piece, a piece based on this exact study. Where he lays out the basic guidelines of the study so cuban trade, thats the name of the magazine for trade and investment in cuba. The other richard that is author of this important study works with the International Growth center as the country director for rwanda, uganda and south sudan. The idc is a joint venture of Oxford University at the London School of economics. It provides the institute provides independent Research Based analysis at the request of selected countries in asia and africa. He is a senior fellow, nonresident, at the World Trade Institute in bern, switzerland, and a distinguished research, researcher at the North South Institute in canada. He consults with a number of International Organizations including the world bank, the organization of Economic Cooperation development and the International Trade center. Where very, very fortunate to have these two scholars with us today to present their work that span and number of months, and its pretty detailed editing it makes an important contribution in terms of the challenges that cuba faces and expanding tourism in cuba as well as some of the opportunities. So with that i turn it over to our two coauthors who will come up and present their work. [applause] well, thank you very much, frank, for the wonderful introduction. Also thank you to dean hampton for the welcome to the Chaplain School. It really is a pleasure us to be here. You know youre in the right place when the school of management that youre dealing with is located over a wine bar. Richard and i are just humble development economists, and we came to tourism sorted through the lens of growth and distribution in those kinds of issues. And if we had only known what you guys have already figured out, we wouldve started much earlier in our quest to understand the Tourism Industry. Richard and i are going to do a bit of a tagteam here. So bear with us as we passed the baton and discuss this study. Just a couple of points. Let me give you the headlines first. First of all, if i can get this thing to work, one of the reasons we wanted to go to study tourism was the industry was booming. We wanted to ask the question, who benefits. That question is important, has become important politically into United States because of the recent election. And now we see the prospect of possible reversals of some of the obama issues, and theres been the assertion that, in fact, tourism or doesnt benefit the economy. It benefits mainly the military and so therefore we ought to shut down whats been happening already. The question would also interested in was how can the industry be structured so that it drives growth . We didnt want it to be an enclave industry which benefited only a few people, had growth implications that would allow cuban incomes to rise much more rapidly than the rather anemic performance it had in the past. Short answer to both of those questions is that the industry in fact, is benefiting and wide swath of Cuban Society and indeed it has the potential to drive a Sustainable Development into the future. That said, the industry, cuba has fallen behind the other caribbean countries. It operates well short of its potential in our view. One reason is the combination of state sector ownership and regulations that have created obstacles particularly for course industries and Linkage Industries to help the industry grow. So well elaborate a bit on that of course in this discussion. We think the way this is proven in fact, is that even modest changes in regulation that occurred over the last four or five years have unleashed a torrent of private sector activities in britain breakfast, and restaurants, in transportation, taxicabs and so forth. That cluster, that private sector cluster now counts for more than 30 of the industries earnings. The government does in fact, have ambitious plans for the industry. You would like to accommodate some 10 million visitors by 2030. Thats a big increase. What are are the things we wanted to do was look at the realism of that estimate. Could he do this . Rs met suggests its possible but its unlikely unless cuba changes a number of its policies and we will elaborate on what some of those also changes might be to promote growth. And, of course, finally the industry has important applications, if i can get the last point to boot up, for the training. We think in its own National Interest the United States should move forward with normalization process that mr. Obama has launched already. Let me elaborate on these points together with richard. First of all cuba has abundant tourism attractions that could be a driver of growth and prosperity. I dont need to tell the audience that. This was at the top assignment that felt to us when we went there but this is just a photo of santa maria in the north coast of cuba. And, of course, cuba has extensive beaches like this that can be developed further but thats not the only important reason. It has a rich culture and one that also merits consideration and develo developing. So the opportunities for the industry to grow are really fast and enormous. In fact, already of course cuba is booming. There is a graph the number of arrivals over the period 1995 19952015, and you can see theres a number of a steady stream save for a little blip in the mid2000. And, of course, this graph only goes up to 2015. Sally asked me to do projection 2016 based on more recent numbers, and, of course, that would allow i think for the number of tourists to reach almost 4 million by the end of 2016. If you look however at the earnings, the pattern is much more varied. The earnings for tourist varies quite widely from yeartoyear, and response to domestic policies among other things, but in 201415 you see an important upswing in earnings. In 201 2015 its likely to be en greater simply because the industry is operating in a much higher capacity in part due to the normalization efforts of the United States and cuba together. The benefits of the industry as i asserted at the beginning are actually quite widespread. It is one of the major sources of growth in the economy and perhaps you could argue it is the principal growth in economy. Its a major source of Foreign Exchange and earnings. Tourist revenues are twothirds or threequarters of all merchandise earnings. Cuba is a Service Sector exporter as an economy, and tourism plays an important role. Some 70 of tourist earnings stay in the country, which is a pretty good number. Spending on wages, agriculture products, cultural activities, transport and the like. And it is a major force linking cuba to the global economy, exposing cubans on a daily basis to the international environment. This graph shows the fact that the cuban industry has ample opportunity to grow. If you think about, i dont like this term carrying capacity, but this simply shows the number of visitors as a share of the population. And indeed relative to the Dominican Republic here almost. 5 of the total population, its about twice what cuba is today. So there is considerable upside potential he if he just used this measure, and i would argue there are many other measures we could use that would show the same thing. The industry has not contributed to cubas growth as much as it could otherwise occur, as much as it otherwise could. In fact, that our site it is kind of falling behind. This graph simply shows the contribution to the economy on the far left you see in blue the direct contribution to the economy of cuba, its about 2. 5 of gdp. Of gdp. If you use the world travel and Tourism Councils numbers, that number expands some 10 total contribution to the economy, atd this includes induced spending as well as indirect spending. Thats substantially less than what we see in either the Dominican Republic or costa rica, compared to countries that we think are pretty good comparators for cuba. Theres more that cuba could be doing. This graph shows two things. The first is that the bottom line is, this is an index in 1995, sort of putting all economies in exactly the same level and saying lets look at revenue per visitor over the long sweep of things. This is an indication of the efficiency and effectiveness of the industry in growth. And as you can see, cuba is doing rather poorly relative to the other comparator countries, costa rica, the Dominican Republic. This is average for all developing countries. An important point about this is not only cuba doing relatively poorly compared to the rest of the caribbean, the caribbean itself is doing relatively poorly compared to the rest of the world. The caribbean is losing market share to other destinations. Why . Over the last 20 years major new destination have opened up in china and southeast asia, and africa, and as a result the tourist dollars are getting spread over a much wider array of countries, which means that the industry really has to be competitive in order to survive and actually to prosper. Cuba has more to do with this is this isa once to upgrade its industries. One of the reasons of course is that if you talk to some of tourists, one of the things they typically complain about our poor maintenance, the Service Quality or the fact that the internet is virtually nonexistent or very expensive and awkward. These are things cuba is working on. We have some suggestions about this everything part of the reason for this particular factors has to do with the nature of the organization, the industry, and the incentives that industry transmits to its workers and its management. Let me turn over to richard at this point and he will talk about the organization of the industry and its future that way. Richard, thanks very much. So the industry in cuba tourism is dominated by Stateowned Enterprises. Of course it is still a statist economy. There are three main Stateowned Enterprises in the Tourism Sector. Two of them are under mentor, the ministry of tourism. We also see that under the military, we have the third main stateowned enterprise. Some of these three Stateowned Enterprises, only one of the three is the military. Of these three, one accounts for about 40 of the rooms in the Tourism Sector. You may have heard, its often said rhetorically that tourist money is all going to the cuban military. Is that what this graph says . Or is actually only 40 going to the military owned stateowned enterprise, one of the three . Plus as i will explain him and you had a boom in the purely privatesector tourism. People opening up their homes, remodeling rooms and creating places where travelers can stay in the bedandbreakfast. That accounts for about another 25 of rooms, about 16,000 rooms. Add that to the total tourism capacity and gaviota is only 2530 of total international rooms, four or five star quality where you might consider staying if you were to visit cuba. The main point is, it is simply not true that all of these traveler revenues are going into the coffers of the far of the cuban armed forces, okay . The other point here is that as you can see, 45 of the main hotels, the four and five stars, have some foreign partnership. Of course not with u. S. Companies except a little bit of marriott but mostly with spanish, canadian and other International Hotel operators that are active now in cuba. So most of the hotels that you would stay at there is some international presence. However, we. 24 main problems with the way the Tourism Sector has operated. One is a lot, there are endless beaches. Thats with a growth is you dont see many cranes operating in havana. But if you travel to these beach resorts youll see a lot of cranes. It seems odd, doesnt it . Why i did not build them a capacity in havana . That are various reasons which are reported flames had to do with incentive structures. Of the 44,000 rooms of four to five star quality, only 6000 are in havana. If you want us to indigo to tell you will pay three to 400 a night. There are only three and four new hotel sites currently under construction in havana. There should be a dozen. For various reasons its easy to build boxes on the beach than it is to do an Interesting Hotel in havana, and there are also questions of profitability. So thats one problem. Over emphasis on beach resorts as opposed to urban sites, havana and elsewhere, and spreading the investment around the country, for example, to ecotourism, et cetera. Second problem, the Tourism Sector needs to be better integrated into the entire economy. There are no numbers published actually on what percentage of food and beverage is provided to domestically versus imported. Itll have accounts that look at in those categories. We roughly estimate that twothirds of food and beverage is provided domestically, but certainly it could be a higher percent and that has to do with the sluggishness and Agricultural Sector. Basically t