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Castro gets wish list from U.S. businesses Top executives woo Cuban leader, hope embargo ends soon

THE BALTIMORE SUN

WASHINGTON -- Cuban President Fidel Castro flew home to Havana late last night with a wallet full of American business cards.

He collected them in New York from company executives anxious to cut deals with his island nation but prevented from doing so by a trade embargo dating 33 years to the Kennedy era and the Cold War.

"It's best to get your luggage out but not pack it yet," said Tom Cox, executive director of the Washington-based U.S.-Cuba ,X Business Council. The organization was founded last year to represent 45 major companies looking toward future investment in Cuba, among them the Big Three automakers -- Chrysler, Ford and General Motors -- Coca-Cola, PepsiCo and Colgate-Palmolive.

The prevailing mood among business leaders -- readiness tinged with caution -- is based on two primary factors:

* A post-revolutionary Cuban market could be potentially worth billions of dollars to U.S. companies.

* Communist Cuba's politics and economy are in crisis in the wake of the Soviet collapse. Its credit worthiness this year was ranked 126th out of 135 countries in an international rating by Institutional Investor, a prestigious financial magazine.

"It does kind of put some cold water on near-term expectations," said Mr. Cox. "Even if you set aside the issue of the embargo, there are key issues from the business perspective which need to be addressed and which suggest very strong commercial and political risk in Cuba."

What many executives want, apart from an end to the embargo, is more freedom in Cuba than foreign companies now have to hire and fire Cuban workers, a reliable claims arbitration system and restitution for or return of property seized in the 1959 Cuban revolution, estimated to be worth about $6 billion today.

But there was little sign of such misgivings as business leaders indulged in what a New York Times headline termed "Fidelmania" while Mr. Castro was in New York this week to address the United Nations.

If the 69-year-old patriarch of Cuba's revolution was a pariah on the diplomatic circuit and shunned on the Big Apple's social calendar, he was a hit in the world of business.

He had more than 200 invitations from U.S. executives to breakfast, lunch or dinner, according to John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a nonprofit liaison group between U.S. business and the Cuban government.

Dwayne O. Andreas, chairman of the board and chief executive of agricultural products processor Archer Daniels Midland Co., sat next to Mr. Castro at a Saturday night dinner in New York.

"It was like two businessmen talking," recalled Mr. Andreas. "It's kind of amazing. What he said was, 'Look, those of us who were in the revolution now have an entirely different role. Now that we are in charge, we have to run businesses just exactly like you do. I am running and creating businesses all over Cuba as fast as I can.'

"Businessmen were eager to get his pitch and know what his plans are. I don't know how many companies would go in there, but when you are the only companies in the world shut out by your own government, naturally that tends to exacerbate your own feelings about it.

"We should inundate him with American businessmen. Why not? That would bring about freedom and democracy faster than any other thing."

Despite all the excitement, neither the Clinton administration nor the Republican-controlled Congress shows any sign of ending the economic embargo. Congress is considering legislation, currently in a Senate-House conference committee, tightening the sanctions in an effort to speed the end of the Castro regime.

"Fidel Castro is on the ropes," said Sen. Jesse Helms of North Carolina, the Republican chairman of the Foreign Relations Committee. "He is looking around trying to sell anything he can, whether he owns it or not, in a search for hard cash."

Mr. Clinton this month announced a two-track Cuba policy, tightening enforcement of the economic embargo to increase pressure on Mr. Castro but also easing travel and communications links.

Many analysts believe that the embargo on Cuba will last, in one form or another, as long as Mr. Castro is in power.

Waiting for the relationship to change is Kurt Carlson, chairman of the board of Carlson Companies Inc., parent company of Radisson Hotels International and TGI Friday's. In 1989 he was invited to Cuba to look at potential hotel sites.

There was, he recalled, "a meeting of the minds" on a promontory 40 feet above Varadero Beach, southwest of Havana, on what he was told was the former Dupont family estate. But, because of the embargo, nothing could happen.

"I still think that they are going to keep their promise on that lot so we can put that hotel up," said Mr. Carlson. "We will just wait until the time comes, and we will be down there as soon as Cuba opens up."

Reeling from the withdrawal of Soviet political and economic patronage, the Communist system has all but imploded on Cuba. The island's total output has been halved between 1989 and 1994, according to the Central Intelligence Agency.

Cuba has been forced to turn increasingly to the industrial world to shore up its fortunes, easing restrictions on foreign investment, mainly in tourism, minerals, oil and agriculture.

By 1994 nearly 200 joint ventures, worth $1.5 billion, had been signed between Cuba and companies in 28 countries, and Cuban enterprises are lining up to find more foreign partners.

This spurt in oversees commerce has not gone unnoticed in U.S. board rooms. Business leaders point to Cuba's need for improved air and sea ports and highways, an efficient agricultural system and modern telecommunications, and rice and beef to feed its population.

"Their competitive juices are flowing and there's not much they can do about it, except invite Castro to lunch," said Wayne Smith, professor of Latin American studies at the Johns Hopkins University and chief of the U.S. interests section in Havana from 1979 to 1982.

Kim Elliott, trade analyst with the Institute for International Economics, predicts that Cuba will likely follow Vietnam's example in emerging from the U.S. embargo: Frustrated business leaders, who are losing out to foreign competition, will intensify their lobbying for an end to U.S sanctions, and the Cubans will gradually reform their economy to make it more attractive to foreign investment. Mr. Clinton lifted the trade embargo against Vietnam in February 1994.

"That is the dynamic you are seeing in Cuba," said Ms. Elliott, adding that it could still take years to overcome the opposition, spearheaded by many in the Cuban-American community, to ending the embargo.

Certainly, the lure of a market of 11 million deprived consumers, lusting for anything made in America, on an island just 90 miles from the U.S. coast, is strong. In pre-Castro days, the United States dominated 70 percent of Cuba's foreign investments, and American brand recognition remains strong.

"These people know Nike, McDonald's, General Electric and General Motors," said the U.S.-Cuba trade council's Mr. Kavulich. "They want them."

Cuba

Politics Communist since 1959 Castro revolution Population 11 million Total output $14 billion Economic growth 0.4 percent Exports $1.6 billion (main customers Russia, Canada, China) Imports $1.7 billion (main suppliers Spain, Mexico, France) Telephones 20.7 per 1,000 people TV sets 1.53 million Industries Sugar, petroleum, tobacco, food, textiles, chemicals, nickel Agriculture Tobacco, citrus fruits, rice, coffee, potatoes, sugar, beans Life expectancy 77 years Literacy 98 percent

Source: Central Intelligence Agency

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