Return to Transcripts main page
Quest Means Business
E.U. Policy Chief Arrives in Cuba; Tsipras Looks for Support in Berlin; U.S. Travel Industry Prepares to Visit Cuba; Cruise Industry Eager to Enter Cuba. Aired 5-6:00p ET
Aired March 23, 2015 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(MUSIC PLAYING)
[17:00:19] RICHARD QUEST, CNN HOST (voice-over): The closing bell rang on Wall Street. The Dow fell 11 points at the start of a new week. When all
was said and done the cheering, the market is now closed. Trading is over on Monday, the 23rd of March.
Tonight, we're looking at a new chapter for Cuba. Europe's foreign policy chief is heading here to Havana.
Stop the stereotypes. The Greek prime minister calls for calm as he meets the German chancellor.
And just what potential does Cuba's economy actually have? We're going to be looking at the Cuban economy as seen through the eyes of the country's
motorcars.
I'm Richard Quest, tonight, live from Havana, Cuba, where of course I mean business.
(MUSIC PLAYING)
QUEST: And a very good evening from Havana in Cuba. For the first time, QUEST MEANS BUSINESS live in the Cuban capital and we're here because this
is just the right moment to be seeing exactly what's happening in Cuba as a rapprochement with the United States seems set to gather speed.
Throughout the course of this program, we'll be talking to entrepreneurs. We'll be hearing the experts' view on Europe versus the United States and
crucially you're going to hear from the next generation, the Millennials and what they want from Cuba.
Improving relations with the E.U. and the United States are priming Cuba's economy like nothing that's ever been seen since the embargo was introduced
more than five decades ago.
But first, Cuba itself, 110,000 square kilometers, Cuba's larger than the Dominican Republic, Haiti, Puerto Rico, Barbados, the Bahamas, the U.S.
Virgin Islands; put them all together, combined, it has the potential to be an economic powerhouse in the region.
The half-century embargo or blockade, as they call it here, has freezed (sic) Cuba out from U.S. markets. It's cost its economy roughly half a
billion dollars every year. Cuba loses out at least 1 percent of its GDP.
Now the economy minister has already revised growth estimates up 4 percent this year.
Why? Simply because more Americans can have increased access to Cuba and it helps traditional Cuban industries like tobacco and rum.
Not surprisingly, when the United States announced it was coming here and was going to improve relations, the European Union decided to get in on the
act, too. In just two hours from now the plane carrying the foreign policy chief for the E.U., Federica Mogherini, will arrive in Havana. It's her
first two-day visit for negotiations and discussions with her counterpart. The visit comes at what the E.U. is calling a crucial time for talks on
trade, democracy and investment. Those talks that began with Cuba about a year ago.
To put this into perspective, a short while ago I was drawn by Herman Portocarero, the European Union's ambassador to Cuba. We wanted him live
on the program, but as you can imagine, he is preparing and sharpening his pencil for Mogherini's visit in just a couple of hours' time.
I asked why now for the high representative to come to Cuba.
(BEGIN VIDEOTAPE)
HERMAN PORTOCARERO, E.U. AMBASSADOR TO CUBA: First of all, the proof of the interests we take in Cuba and we know that Ms. Mogherini has a lot of
things on her plate. The fact that she takes time out to come here just proves how important we find Cuba in our present relationship.
QUEST: What are you finding important because it's a small economy. It's a lot medium-sized island. So what's important for E.U.?
PORTOCARERO: In the long run, that this society may evolve more to its our kind of society than to others. That means, in clear terms, keep all the
achievements of the last 50 years while the unavoidable change has happened.
QUEST: In reality, that means move towards capitalist society, a democratic and openness.
[17:05:04] PORTOCARERO: It means, first of all, that we're talking about let's make the economy to work better, to create jobs, to open up more
economically and then the changes in the society will come gradually. We are convinced of that.
The first order of business is to make sure that people have a decent life and can make a decent living.
QUEST: So one of the reasons of course that the high representative is coming is that the U.S. is building its rapprochement with Cuba and you
don't want to lose out.
PORTOCARERO: We're talking about a triangle, which is of course lopsided. We are at the other side of the world. But we have a longer tradition
here. We know how the country operates. We know and our companies know how to do business here.
So we have certain advantages. Plus we are not coming from that far. We've had diplomatic relations for more than 25 years. So we have certain
advantages. And I think it's also to Cuba's advantage that the future relationship is as diverse as possible, that not all the eggs are in the
same basket.
QUEST: No, but that's certainly true. But as the U.S. gets ever closer -- and I think you would agree we're talking when, not if, of the embargo
being lifted.
PORTOCARERO: It may take a while, though. And in the meantime, we want to occupy such spaces as we think are good for us and for our companies.
QUEST: The E.U. is also sending a message to Cuba that you've been here in good times and don't forget your friends.
PORTOCARERO: Absolutely. Absolutely. Let's not forget Cuba started to open up in the mid-'90s. And we were there from day one. So were some
partners like Canada and other countries in Latin America.
If there are 3 million tourists now, it's thanks to the openings that happened 20 years. So we have a certain tradition and a certain way of
being here that others don't have as yet.
QUEST: Is there a fear -- and we've seen it before in other environments that -- where countries open up -- that it all goes a bit too far too fast
and suddenly you end up with a clampdown.
PORTOCARERO: Well, it has been back and forth here. There was quite a lot of economic reform in the mid- to late '90s then it came somewhat to a
standstill and we picked up again in 2012 with the whole plan of economic reform that is being implemented now.
So we have seen faster- and slower-paced reforms, but we are very much convinced that what is happening now is irreversible and that we're now
looking at the future.
QUEST: You're sure about that?
PORTOCARERO: I'm sure about that. I've seen hesitations before but I think now the society is different from what it was 20 years ago. People
are much more informed about the outside world. There's a new generation with other expectations and changes will have to happen in the economy
first and then in the society.
QUEST: And the message that the high representative will be bringing?
PORTOCARERO: Again, it's we're here. We are reliable partners. We don't have very important geostrategical (sic) interests here. We are a good
investor. We are a good trading partner. Listen to us also about the future of your society can look like.
(END VIDEOTAPE)
QUEST: That's the E.U. ambassador, who will be greeting his boss, the high representative, Mogherini, in just a few hours from now.
So let's put this in perspective and get some analysis. I've wanted to say this since the moment I arrived. I took coffee cost me a CUC, which is the
money that they -- the convertible currency as opposed to the other one.
Our man in Havana is Patrick Oppmann, CNN correspondent.
Thank you, Patrick. You've been a marvelous host to us here.
PATRICK OPPMANN, CNN CORRESPONDENT: Anytime.
QUEST: The U.S. is coming and the E.U. is worried.
Why?
OPPMANN: And they should be. The geography, America's closer. Think about before the revolution, this was an American colony. That's why the
revolution happened and all over diplomatic cocktail parties now, they want to know what the U.S. is going to do. They hear the weight of history, all
the money that's going to come and it seems inevitable there will be U.S. embassy here. There will be the process of normalization of relations.
It's going to take time, though. A lot of bad blood --
(CROSSTALK)
QUEST: Right, now, that's the point. Everybody -- myself included -- naive, maybe -- and one of the email questions I've asked on Twitter again
and again, @RichardQuest if you've got a tweet question for us here, how quickly will this process take?
OPPMANN: If it's up to the Cubans, it won't be very quick at all. They're afraid, frankly, of too much change. Raul Castro says again and again that
it's almost as dangerous to go too quickly than too slowly. They want to be able to put the brakes on it. It's very hard to do with capitalism.
And back to the Europeans, they feel like they've done the hard work. They've slogged it out. And the Americans are coming in to take the prize.
QUEST: Which will happen inevitably. I mean, even though the ambassador has said that the changes are irreversible, do you agree with the
ambassador?
OPPMANN: It's truly up to the Cuban government as much as anybody, how much changes. They never wanted any of this to happen. Of course, when the
revolution took power, it was to kick the Americans out. Their coming back is something of an acceptance of that they didn't win, we didn't win. But
this is just the geography. They can't change the geography. They want the embargo to go. They know it'll have an incredible impact on this
economy --
(CROSSTALK)
OPPMANN: -- to go.
[17:09:56] QUEST: Patrick, you're an enviable correspondent in the sense that you are -- you're in your posting at a time of change, the like of
which you may never see again in your career.
What, for you, sir, is the quintessential Cuban moment, the Cuban ethos? Explain to me what is Cuba?
OPPMANN: Go to the airport and you see family members get off a flight they haven't seen their family in Cuba in years, maybe have never met them
and they break down. That's what it's really about. It's a family separated that wants to be reunited. Now it's up to both governments to
get where the people are, which they want to reunify this country after so many years of bitter divide and it's time for the government to figure out
how to make that happen, that's both Cubans and Americans want this to happen. It's now time for our respective to get on board that plan.
QUEST: CUC and CUP, by the way, those are the two currencies, there's the convertible and the non-convertible. And I think I might just fathom it
out by the time the plane takes off again.
Thank you very much --
(CROSSTALK)
OPPMANN: Explain it to me once you do.
QUEST: -- I will. What would you like to get paid in, the CUC or the CUP?
OPPMANN: Definitely the CUC.
But I'd take the U.S. -- I'd take the pound, I'd take the lira. They're worth something.
QUEST: Our man in Havana is Patrick, thank you very much indeed for joining us.
Now the U.S. markets, gosh, I never thought I'd be doing this, standing in this country, talking about how the Dow Jones closed in New York, from what
was a Communist revolution to the heart of capitalism, Havana to Wall Street. And the Dow Jones closed with just minor changes.
The volatility of the last few days and the last few weeks seems to have abated. Investors truly trying to work out what it means when the Fed says
patience is over.
As we continue, we're going to come from Cuba straight back to Europe. When the Greeks met the Germans, the stereotypes had to go away. QUEST
MEANS BUSINESS -- live in Havana.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST (voice-over): Welcome back, QUEST MEANS BUSINESS, live in the Cuban capital, Havana, turn our attention back in Europe, where the Greek Prime
Minister Alexis Tsipras is in Berlin on his first official visit to the German capital. He got a welcome from the German tabloid, "Bild," here's
the greeting to the German, "Welcome to Germany, Mr. Tsipras."
And when you turn the cover around, you find the same in Greek. The paper kept the good feeling going with a list of 50 reasons Germans love Greeks
and there was practical advice, too; a tongue-in-cheek article with money- saving tips for the Greek leader.
As for Mr. Tsipras had to say, well, that, of course, was a very different matter. He knows he has to convince the Germans that he is serious about
reform whilst at the same time, ensuring he keeps his own electorate in the check.
Jim Boulden reports.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN CORRESPONDENT: Richard, yes. It's been such an interesting day really in Berlin because Mrtsip went and had this meeting
with the German chancellor. But really at the press conference afterwards, there wasn't anything necessarily northeast. What we were looking for I
think was not necessarily an agreement, Richard, we weren't going to see that but some kind of movement. And what Ms. Merkel said time and time
again was frankly, she cannot make any decisions on what Greece should do or what those who have lent the money should do. It's up to the whole
Eurozone. She kept saying I'm only one leader of 19. We're only one country that uses the euro.
So then we say, well, what could be different? Well, what could be different is what the European Central Bank might do. Now Mr. Tsipras has
been looking to allow the Greek banks to get more Greek debt. In other words, they want to get higher, more loans. They want to get more money
from the ECB. Mario Draghi has said absolutely not up until today.
This is what he had to say about what he still wants to see Greece and the Eurozone do.
(BEGIN VIDEO CLIP)
[17:15:06] MARIO DRAGHI, PRESIDENT, ECB: So -- and I will actually say it again -- that Greece and its international partners should now focus on
setting the conditions for a successful conclusion of the review. That's the most important part.
And the government of Greece should commit to fully honor its debt obligations to all its creditors and to premise all future policies on this
commitment.
(END VIDEO CLIP)
BOULDEN: So, Richard, what we're looking for now -- and what the Eurozone is telling Greece time and time again -- we need to see some definitive
words on paper to let us know exactly what you're going to do, right now, what legislation you'll pass, what promises you'll make to do
transformations in the government, in the country, in paper. What will you tell us that you're going to do to -- in order for you to get the last
tranche of money. Greece is running out of money and Greece needs to make some very tough decisions, very quickly, in order to get any of that $7.8
billion that has been promised Greece as long as the lenders see action on the ground. They have not seen any yet -- Richard.
QUEST: All right, Jim, if you take the totality of the crisis, that started with the election, if that such it be, then went through the
negotiations of the interim agreement and now these further working of things out, is there a feeling that they're way back from the edge of the
cliff?
Or that the precipice is only just around the corner and everyone could go over quite quickly?
BOULDEN: Yes, I think the feeling at this moment is that they are standing on the cliff because we have seen what, in the last month, we've seen very
little action. We've seen a lot of words. We see a lot of meetings. But we also know that you now see no one in the Eurozone backing Greece in this
area. They want to see change from Greece. You have every other country saying they've done it; they need Greece to do it.
So I think we are on the precipice. And what we're waiting for is the government to say we're going to do this reform, that reform; we promise to
do this dependence. We promise to do this with whatever it is that we need to see, privatization is a big one as well. All the things that we've
waiting for for months, Richard, we still haven't seen any of that. And that's what we need to see very soon.
QUEST: Jim Boulden, who's at CNN London for us tonight with the Greek- German saga, which will rumble.
And whilst we're in Europe, let's finish off with the European markets and how they closed. It was a bit of a breather on Monday after hitting record
highs last week. No records; in fact, the FTSE, which did do close at a record 1,738 but the other major indices ended in the red.
Greek stocks were up 3 percent, double-digit gains for Greek banks but early shares were up 1.8 percent.
China national chemical company CNCC is taking a major stake in Perrelli (ph) and will launch a bid for the remaining shares.
QUEST MEANS BUSINESS, live in Havana, as you can see it is a spectacular place to come and visit. There is simply an enormous amount to see.
There's a heck of a lot that has to be done. But for the tourists who are already here, the opportunity to see change before it happens, that's why
the numbers are going up.
After the break, just how many tourists could come to Cuba?
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(VIDEO CLIP, CARMEN MIRANDA)
[17:19:51] QUEST: I promise you, the song may be "Would You Like to Have a Weekend in Havana," but that's exactly what's in prospect for many
people if the embargo or blockade, as they call it here, in Cuba gets lifted.
Think about it. Miami a couple of hundred miles away. It's an hour by flight. Key West just 90 miles away from Havana. It's a short hop in a
helicopter before you could be landing here at the Havana Bay or near the Havana Bay, the El Morro lighthouse and the Spanish colonial fort could all
be yours for just the weekend.
That is the tantalizing promise as the opportunity for more tourism arrives in Cuba. And as more tourists are able to spend the weekend here, Cuban
businesses are most certainly looking forward to substantial increases in the years ahead, as infrastructure improves.
As U.S.-Cuba relations warm, it'll be easier. Cuba could expect a million American visitors per year. They get a tenth of that today, on top of 3
million of around the rest of the globe. The extra tourists could be worth upwards of $2 billion a year and travel and tourism currently accounts for
almost 10 percent of the country's GDP, along with rum and cigars. You'll see cigars as well.
The question, of course, is how easy is it for Americans to come to Havana with the new regulations eased by the Obama administration, many more can
now self-affidavit that they're coming here for legitimate tourism people- to-people exchanges.
Clare Sebastian in New York reports.
(BEGIN VIDEOTAPE)
(MUSIC PLAYING)
CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): Tropical sunshine, carnival even (INAUDIBLE) gambling. In the 1930s and '40s, Cuba was a
playground for American travelers. Now after half a century of frozen relations, U.S. tour companies are coming back. smarTours in New York is
getting ready to start its first trips to Cuba in April.
GREG GERONEMUS, CEO, SMARTOURS: Well, demand was already through the roof. From our existing client base alone, we sold out of couple months' of
departures within a matter of hours.
SEBASTIAN (voice-over): The tours went on sale in November last year, even before the U.S. president announced travel restrictions would be relaxed.
GERONEMUS: There was a lot of confusion about what's possible with travel to Cuba from the U.S. You can't go there as a tourist and just do
touristy, leisure activities.
SEBASTIAN (voice-over): One thing that has changed, U.S. companies no longer need a special license to travel to Cuba. smarTours had only just
received theirs when the policy was lifted.
GERONEMUS: We should probably frame it.
SEBASTIAN (voice-over): Now your travel just needs to fit into one of 12 categories, including family visits, journalistic activity or educational
activities.
JOHN E. SMITH, U.S. TREASURY OFFICE FOR FOREIGN ASSET CONTROL: The roles are relatively simple. They just need to follow what we've said because it
is still a very serious sanctions program that is implemented by an act of Congress.
SEBASTIAN (voice-over): The travel industry is racing to meet the new demand. The U.S. Tour Operators Association says 20 out of its 50
(INAUDIBLE) Cuba. Online booking site Kayak now includes Cuba in its searches and last week saw the first direct charter flight between New York
and Havana in half a century -- Clare Sebastian, CNN, New York.
(END VIDEOTAPE)
QUEST: Clare Sebastian in the frozen New York and this, of course, is the glorious spring weather in Cuba. One of the big growth areas for tourism
will undoubtedly be the cruise industry, they're huge in the Caribbean. Thirty-five percent of all cruises globally are taken to the Caribbean.
Now here in Cuba, there is just one ship in Havana's port. It's the Louis Cristal, which is from Cuba Cruises -- not surprisingly all the major
cruise lines, particularly the two largest, Royal Caribbean and Carnival Cruises, are salivating at the prospect of being able to come here.
(BEGIN VIDEO CLIP)
RICHARD FAIN, CHAIRMAN AND CEO, ROYAL CARIBBEAN CRUISES: It's the Holy Grail of our industry. Cuba's right next door to us and Cuba is such an
amazing destination that if we can solve the political and legal issues, there's a demand there. There will be a huge influx of tourism. It's a
wonderful place, the cultural, the history, the geographic, the mountains, the plains. It's just a tremendous destination.
ARNOLD DONALD, CEO & PRESIDENT, CARNIVAL CORPORATION: You know, when the embargo is lifted, we will be ready to go. Cuba, there's a lot of pent-up
demand as you know in the United States to visit Cuba. There are 11 ports. The Havana port is a shallow depth port. There's a tunnel, so you can't
dredge any deeper. Only small ships that will go direct into Havana.
But there are other ports.
(END VIDEO CLIP)
[17:25:00] QUEST: Now that shallow Havana port that you can see behind me only allows relatively small cruise ships such as the Luis Cristal. And
why is that here? That's from a Canadian company that's come here. All the big American ships would have to remain out in harbor or further up the
coast.
Perhaps no cruise CEO -- cruise line CEO -- is looking forward more to bringing his ships to Havana than the CEO of Norwegian Cruise Lines, NCL.
Frank Del Rio is a native. He was born in Cuba. He left in the Mariel boatlift in the 1980s. He's wanted to come back ever since. He never has.
Now he has a cruise line and he left me in no doubt he can't wait to bring his ships to Havana.
(BEGIN VIDEOTAPE)
FRANK DEL RIO, CEO, NORWEGIAN CRUISE LINES: No question, the most popular destination in the Caribbean, once it opens up and opens up fully because
there are infrastructure issues. But Cuba is more than just Havana. There's at least seven or eight ports throughout the northern coast or
southern coast that we'd love to visit.
QUEST: I understand, as long as the embargo's in place, nobody can. But how advanced are your plans and if they're not, I presume they're getting
advanced because this is going to happen sooner rather than later.
DEL RIO: Yes. There's only so much you can do without the participation and cooperation of the destination that you're going to visit. But in
terms of itineraries, in that special place on my desk, under lock and key, there are seven different reiterations of itineraries, different lengths,
different ports, all starting from South Florida. One of them actually starts from New York City. So from that perspective, we're ready. But
there's a lot more work to be done than just having itineraries.
QUEST: So you've got Havana.
Where else would you want?
DEL RIO: Cienfuegos, Trinidad on the southern coast. What we know as the Isle of Pine now is called the Isla de la Juventud, the Isle of Youth. Of
course, on the other extreme, you have Oriente, where Guantanamo is and then very close to Cuba you've got the Mexican Coast. You've got Grand
Cayman, you've got Jamaica. So it could be more than just a Cuban -- all Cuban itinerary.
QUEST: So now talk to me about how one manages that. Now I understand that with the best within the world, if you cut all the airlines and the
hotel companies, the cruise ships, everybody trying to get in there, the sheer amount of money flooding towards Cuba, I suppose it creates all sorts
of issues of transparency, corruption, bribery, not deliberately by any means. But from this side, you've got sheer amount of money will create an
environment of risk.
DEL RIO: Well, if it's not managed by both sides, it'll choke the very thing that you're trying to get on the ground. And so I think that the
Cubans understand that, that their infrastructure isn't ready, that there's more demand wanting to go to Cuba today than they can possibly handle.
So don't know how they're going to do it, whether it's the lottery, they're going to take their favorite cruise line, maybe welcome the prodigal son
home. You know, I was born in Havana.
QUEST: Tell me about this.
DEL RIO: Well, I was 7 in 1961, August 22nd to be exact. My family, my little brother, mother and father left and unfortunately we haven't been
back since.
I remember a lot. I remember where I lived. I remember the school I went to. I remember my dad worked for Coca-Cola. I remember the Coca-Cola
plant in Havana. I remember downtown Havana. I remember where my parents used to take me -- like a playground. I remember the beach, Varadero
Beach. I remember good times.
And a beautiful city and it'll once again be.
(END VIDEOTAPE)
QUEST: Frank Del Rio, the CEO of Norwegian Cruise Lines. And he made it quite clear that, yes, he may come here in advance to prepare but there'll
clearly be the moment when he brings one of his own ships and he's on the bridge and he gets to pull the horn.
When we come back, what does Cuba opening up mean for industry and for entrepreneurs? Where's the opportunity to make money? We'll talk about
that after the break. QUEST MEANS BUSINESS, we're in Havana.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
[17:31:20] RICHARD QUEST, CNN ANCHOR AND CORRESPONDENT AND HOST OF "QUEST MEANS BUSINESS" SHOW: Hello, I'm Richard Quest. There's more "Quest Means
Business" from Havana in just a moment when we'll be talking to one of Cuban American's best-known entrepreneurs about what opportunities he sees
here in Cuba. And I'll take a ride in a vintage car and show you the Cuban economy as seen through the country's cars.
All that still to come. First though, this is CNN and on this network the news always comes first.
Benjamin Netanyahu has apologized for campaign comments about Arab voters that drew widespread criticism. The Israeli prime minister tried to
motivate his bas by saying Arab-Israelis were voting in droves. He said on Monday he did not mean to offend members of the Israeli-Arab community.
The Afghan President Ashraf Ghani is on his first official visit to the United States since he was elected last year. Mr. Ghani's been meeting
with the Secretary of State John Kerry and the Defense Secretary Ashton Carter in Maryland. Speaking at the news conference, Secretary Kerry said
the country was facing a critical moment.
Tunisia's president says tourists should still continue to visit the country despite last week's deadly attack on a museum in the capital. In
an interview with CNN's Christiane Amanpour, President Beji Caid Essebsi said the country would not be intimidated by the terrorists.
(BEGIN VIDEOCLIP)
BEJI CAID ESSEBSI, TUNISIAN PRESIDENT, VIA INTERPRETER: Tourism is one of the main financial sources of the economy in Tunisia and I'm convinced
since we have to take tourists who are also here that no tourist ask to leave following the events of last week.
And particularly in Europe, there is a major movement which says that tourists should to Tunisia - this would be the best way of showing that the
fascists and extremists cannot stop the development of Tunisia and cannot stop the tourists coming. And we have the hope that this year tourism will
be even better than last year.
(END VIDEOCLIP)
QUEST: Good evening from Havana. "Quest Means Business" coming to you live tonight from the Cuban capital. As the improving relations with the
United States calls into a question - what direction will the Cuban economy be taking in the future.
The collapse of the Soviet economy in the 80s and then into the 90s put severe strain on one of its client's states in Cuba. Perhaps nowhere was
it more keenly felt as the money dried up as the assistance stopped than here in Cuba.
But Cuba's economy today is poised for resurgence. Exports currently account for more than a quarter of Cuba's economic output -- its petroleum,
nickel and of course tobacco rank near the top. Tobacco's crucial with the cigars, add in a bit of rum too.
Almost half the trade goes to just three countries - China, Venezuela and Canada. One of the industries that has suffered greatly but shows huge
promise in the future is the sugar industry. Long a staple of Cuba's industry, now it too faces increased investment, possible new
opportunities. Our correspondent Patrick Oppmann reports.
(BEGIN VIDEOCLIP)
[17:35:16] PATRICK OPPMANN, CNN CORRESPONDENT: In Cuba, man and machine race to cut sugar cane. The zafra, as the sugar harvest is known here ends
in April and officials have promised that this year they will increase the as-of-late lackluster production. So far everything hasn't gone according
to plan says cane cutter Michel.
MICHEL, CANE CUTTER, TRANSLATED BY OPPMANN: "This harvest has had some problems," he says. "There were problems with the motor and other things
and I couldn't work for a month."
OPPMANN: Because of the American trade embargo, replacement parts for Michel's rig couldn't come from Cuba's neighbor, the United States.
Instead, the harvester stood idle while parts were ordered from Brazil.
The United States used to control much of Cuba's sugar industry until Fidel Castro nationalized all American holdings on the island. In retaliation,
the United States broke off relations with Cuba. But ever since the collapse of the Soviet Union, for decades Cuba's main trading partner, it's
been tough going for the Cuban sugar industry.
According to an old Cuban saying, without their zafra sugar harvest, there is no country. For generations, Cuba's fortunes rose and fell with the
island's ability to produce sugar. But in recent years, that output has dropped to a fraction of what it used to be.
The first U.S. agriculture delegation to come here since the change in U.S. policy toward Cuba says revitalizing Cuba's sugar industry to create
renewable energy is an opportunity for American companies.
NANCY HIMANN, INGENUITY WORLD WIDE: It could be done more efficiently and produce more baseload power for the island. And so we're interested in
bringing technology that would help them do that.
OPPMANN: Despite the still rocky relationship, Cuba sugar industry officials say they would accept foreign investments from their old enemy.
RAFAEL RIVACOBA, AZCCUBA STATE SUGAR COMPANY, TRANSLATED BY OPPMANN: "We were all for that," he says. Our regulations don't differentiate between
one country and another.
OPPMANN: If the proposal is a good one and the North American laws permit it, then they could do business. It's unclear to what degree what
relations will be repaired with the United States or when American companies will be allowed to freely invest in Cuba but an opportunity could
be waiting for whoever can figure out how to return these fields to their former productivity.
(END VIDEOCLIP)
QUEST: That's Patrick Oppmann with the - in the - sugar fields of Cuba. The question of course is whether the future of the country's economy rests
on old industries like sugar. Hugo Cancio is an entrepreneur, Cuban- American and that rare breed who divides his time between Miami and Cuba. How often do you make the trip?
HUGO CANCIO, FOUNDER AND CHAIRMAN, FUEGO ENTERPRISES: Two or three times a week, Richard. This is a beautiful country. Miami's only 40 minutes away,
so you know, it's like a ride from my home to my office in Miami - it's that short.
QUEST: Right. And some tough questions here though because we've talked about the industry. Where do you see the future largely - besides tourism?
What do you see as the future industries for Cuba?
CANCIO: Look, look around us. I see opportunity - a beautiful country, we've 11 million people, great human resources, telecommunications sector,
their technology sector, the import/export sector, the agricultural sector. I mean, these are sectors are going to flourish in this country.
QUEST: They're going to flourish but how do you ensure that it doesn't turn into Russia? Firstly, with oligarchs scooping up all the choice
assets and secondly, with bribery and corruption as this wall of money arrives.
CANCIO: Well, President Raul Castro had the opportunity to - the historical opportunity to look at countries such as Russia, China, Vietnam
and learn from their mistakes. I mean, and he went after corruption the moment he started in power and he has cleaned out house. So this country's
looking forward to not permitting what happened in those countries --
QUEST: How do you - but you see this is the problem I have with this. How do you stop it? What do you think about it? You only need a Sheraton over
there, a Hyatt over there, you need a Four Seasons over there a new terminal over there, and just that sheer weight of money creates its own
corruption, its own greed, if you like.
CANCIO: Well greed is human nature, so greed happens everywhere. Look, this is a country full of opportunities. All these major corporations want
to do business in Cuba, however, the Cubans are going to be cautious in my opinion. They're going to pick and choose who they do business with and
they're going to do it gradually.
QUEST: Is it your feeling on that point that if people like me arrive here and expect it all to happen next Thursday?
[17:40:04] CANCIO: It's not going to happen. Our company before going up prices, we have been trying to position our self for two years and it's
just now that we're starting to get foot on the ground. So it's a lengthy process. It's a country that has been closed up for foreign business and
foreign investments for many, many years and you have to build relationships. You have to create trust. It's all about trust. In order
to do business in Cuba, you need several things. PPPV - what I call patience, passion, perseverance, and vision.
QUEST: Patience -
QUEST/CANCIO SIMULTANEOUSLY: -- passion, perseverance and vision.
CANCIO: A lot of vision.
QUEST: So which one have you got? All of them
CANCIO: All of them. If you lack one of them, you don't have a good future in this country.
QUEST: Thank you very much indeed.
CANCIO: Thank you, Richard.
QUEST: I'm just going to try and remember this - hang on. Patience, --
QUEST/CANCIO: Passion, perseverance, and vision.
CANCIO: You have to have vision.
QUEST: Patience, passion, perseverance and vision. Thank you very much. Good to see you. Thank you, sir, thank you.
CANCIO: No problem. Thank you, Richard.
QUEST: Now when we talk about those things - patience, passion, perseverance and vision - you can arguably say that the former Prime
Minister Lee Kuan Yew of Singapore certainly had all four of those. He died over the weekend and tributes have been paid to the leader, the
founder - the father if you like - of Singapore. We'll look back at his legacy and make comparisons perhaps to what Cuba could learn from the
Singaporean experience. It's "Quest Means Business" and we're in Havana.
(COMMERCIAL BREAK)
QUEST: "I was trying to create in a Third World situation a first world oasis." Those are the words of Lee Kuan Yew who passed away on Monday.
Lee Kuan Yew is known as Singapore's founding father and he let the city state for three decades.
Under his rule, Singapore transformed from a colonial backwater to a gleaming economic power house. Now following the announcement of his
death, tributes have obviously been paid. From the IMF's managing director Christine Lagarde - Christine Lagarde said he was "a visionary statesman
whose uncompromising stand for meritocracy, efficiency and education transformed Singapore."
Singapore's leading companies also expressed their condolences. They credit Lee Kuan Yew for laying the city's financial foundation and for
bringing in foreign investment. Singapore became independent in 1965, the date of independence was just a few years after the Cuban revolution and
after the breaking off of relations between Cuba and the United States.
You can pretty much say the two countries went their own way at roughly the same time. Since then, Singapore, Cuba, have taken radically different
economic paths. Despite having no natural resources of which to speak, Singapore's economic output per capita is amongst the highest in the world,
and nearly $37,000 GDP per capita. That is seven times higher than Cuba's.
[17:45:12] Now much of that success in Singapore is down to Lee Kuan Yew and exactly the changes that he put in place. His legacy extends far
beyond Singapore's borders. His idea helped shape China's economy and economies across Asia. Joining me now is Jamie Metzl, a senior fellow at
the Atlantic Council.
Mr. Metzl, thank you for joining us. I have been to Singapore many times and you talk about the Singapore miracle - if you like - let's deal with
the economics of it. How much of it can we put down to Lee Kuan Yew.
JAMIE METZL, SENIOR FELLOW, ATLANTIC COUNCIL: A huge amount. When you think about where Singapore was in 1950s/1960s, it was really nowhere. I
mean, certainly there were the benefits of the British Colonial presence, but when you think of what incredible growth has happened in this country
which only has the natural resource of its incredible people.
And there are amazing Chinese people all over the world, but what Lee Kuan Yew has done and what he did was bring everybody together into a country
that worked, where there was a sense of national unity, there was an efficiency, there was environment - a very practical environment -- where
they would try different things and to see what would work.
And the results speak for themselves. Singapore today certainly has its problems, but it's very efficient, very dynamic, it's a great place to
live. And a lot of that rests on the shoulders of Lee Kuan Yew.
QUEST: Right. And he was unapologetic - if you like - at the lack of what one might describe of a fully open press - of a full, open political dialog
of basically there were opposition parties in name only. And he didn't care about that. He said, if I understand correctly, that was the price
for the first world-class country that they built.
METZL: And in some ways, it was. And myself and others can be very critical of the soft authoritarianism that Lee Kuan Yew and others have
shown over the past in Singapore. But he results speak for themselves when you look at the incredible improvement in the standard of living among
Singaporean people, the productivity of the Singaporean population and Singapore is just a great place to live.
So, yes, there are issues and it's not an absolutely perfect record, but you have to look at what was achieved and it's really absolutely
phenomenal.
QUEST: Jamie Metzl from the Atlantic Council. Thank you, sir for joining us.
METZL: My pleasure.
QUEST: (Inaudible) the comparison can be made - it may be a poor one - between Singapore and Cuba -- but they did both go their separate ways at
roughly the same time in the same decade, and the evidence perhaps is there to see as some might interpret it.
We will interpret it in a very different way after the break. One of the most famous parts and sights of Cuba is the old vehicle - vehicles that
come from the time when revolution took place. But you can tell a lot of Cuba's economy by its cars on the road.
"Quest Means Business" - rumba in Cuba.
(COMMERCIAL BREAK)
[17:50:01] QUEST: Welcome back to Havana, the old guard may be retiring and in some cases dying off. The young new millennials of Cuba are getting
ready to take over. Manuel and Annabel are journalists, they are young, they are in love and they live together.
And they joined me on Sunday afternoon to discuss their vision of what Cuba - with all its changes - is going to take place. It's the millennials of
young Cuba.
(BEGIN VIDEOCLIP)
ANABEL MEDEROS, JOURNALIST: There's a lot of expectations about these changes because a few years ago, the only opportunity was going outside and
to buy (ph) the new life outside.
QUEST: A lot of people watching will say the question they want to know is do you want to leave Cuba? I mean, or do you see your future here, helping
develop the country?
MANUEL VALDES, JOURNALIST: It's always better to know different realities in order to better understand your own reality.
QUEST: But you want to stay - you want to make your future in Cuba?
VALDES: Yes, yes. Cuba right now it's a bright future, you know? And actually we both want to be part of that.
QUEST: People watching will say, 'Well, they would say that. They're being careful about what they're going to say.' But you say not.
MEDEROS: Everybody knows that - of course. Here in Cuba we need to embuff (ph) (inaudible). There's - it should be a lot of incentive to make a
better country, a better society. But I think that now at least young people - I think they're not afraid to speak about what they think, even
when we are in front of the government, in front of Cuban decision (ph). I think I'm not afraid of that.
QUEST: Do the young people here have any idea what - how we use the internet in the rest of the world?
VALDES: The possibilities here are unlimited. You could make payments using your phones some places, you could check at your plane tickets, your
banking accounts.
QUEST: But you've never experienced this?
VALDES: No. No.
MEDEROS: No, we have not experienced that but we have iPods and we have Samsung Galaxy, so we have access to the internet maybe in the hotel or in
the cafe. So, of course, I was checking my e-mails since my iPhone. I would like to do that every day - not to be in a hotel for doing that. I
would like to be maybe at my home and to check my g-mail, to check my (inaudible), to check a newspaper because I think if young people wants to
be - wants to have a complete idea about everything that is happening in the whole world.
QUEST: Paint for me, please, a picture of your Cuba in five years' time.
VALDES: My dream Cuba is a Cuba more connected to the rest of the world, who are living in highly interconnected and globalized world with a
permanent existential (ph) cultural values and I'm dreaming my country in that way.
MEDEROS: I think that as journalists want to (inaudible) that mean five or maybe in ten years there will be more journals, more newspapers, more
magazines, more TV channels. So, I really hope that.
(END VIDEOCLIP)
QUEST: The two views of millennials in Cuba who may be in a future where journalism will pay more than waiting tables. Waiting tables is an
extremely well-paid job here in Havana.
Finally, from us tonight before our "Profitable Moment," if you really want to understand the Cuban economy, well look no further than the country's
cars. Cuban cars give the secret of how this country survived for the last five decades.
The history of Cuba's cars can be broken into three groups - the classic, the old Soviet, and the brand new. The classic of course comes from the
days just before the revolution. Like this magnificent 1959 Cadillac. It's as old as the revolution itself.
And once Fidel came to power, they realized cars would no longer be easy to obtain, so they did everything to preserve the ones they've got. And you
can see them all around the island on Cuba.
Then you have the Soviet-era cars - the 70s and the 80s like the Lada, the Skoda and the Moskvich. These were given as prizes for loyal, lifelong
service to the Communist Party. They'd swapped the living room on wheels for the tin can.
[17:55:15] Now, they have the brand new cars - the Nissans, Toyotas and Kias. There are no American cars here because of course the embargo's
still in place. The law was changed, now anyone can own a brand new car. The problem is the taxes are so high, it costs a fortune and almost no one
can afford them.
Here at the Peugeot dealership in Havana, the cars are marked up eight times what they would cost in Europe. The most expensive model is more
than $200,000. So, three cars, three faces of Cuba -- the revolution on wheels.
And if there's one thing that will change, it's the number of cars in Cuba. We'll have a "Profitable Moment" live from Havana after the break.
(COMMERCIAL BREAK)
QUEST: I never thought I'd be saying the words "Profitable Moment" in Communist-run Cuba. But the size and magnitude of change is so great, that
is what you're looking at. The government has blamed the embargo or blockade for decades, but now that seems set to go in perhaps the not too
distant future. So let's leave you with the ringing words of the entrepreneur who says he's looking forward to opportunity or the
millennials who say they want to stay right here in Cuba and help rebuild their nation.
That's what this change is all about - opportunity, ambition, goals and not some mass immigration or emigration, but people doing it right here at
home.
[18:10:01] And that's "Quest Means Business" for this Monday night. I'm Richard Quest live in Havana, Cuba. Whatever you're up to in the hours
ahead, (RINGS BELL) I hope it's profitable. I'll see you back in New York.
END
