Cuban Emigré Helps U.S. Companies Prepare For An Embargo-less Future

Dec 19, 2014

Emilio Morales doing Cuba market research.
Credit Tim Padgett / WLRN

Now that President Obama wants to normalize U.S. relations with communist Cuba, the big question is: Can the U.S. trade embargo last much longer? WLRN Americas editor Tim Padgett spoke to a Cuban émigré here in South Florida who doesn’t think so – and who’s helping U.S. companies prepare for an embargo-less future:

“It’s like a storm now. A storm. I finished work last night at one o’clock in the morning.”

That's the first thing Emilio Morales says when I walk into his home office in Westchester. Morales is the president and founder of the Havana Consulting Group, a small marketing research firm – and he’s been riding a whirlwind since Wednesday morning, when President Obama announced he was re-establishing diplomatic relations with Cuba, which were severed 53 years ago.

Obama wants to make it easier for Americans to travel to the communist island and, most important for Morales, make it easier to do business there. As a result, Morales’ phone has been ringing off the hook with clients and prospective clients. They come to him because he has something most other consultants don’t: detailed, ground-level data on the Cuban market.

RELATED: The Cuba Illusion Has Vanished – And Now The Embargo Should Too

Morales’ laptop screen looks like economic GPS instructions for Cuba – everything from restaurant revenues in Pinar del Rio to disposable income in Santiago. He knows the Cuban economy so well because he was once one of its players: a top executive at Cimex, one of Cuba’s largest state-controlled corporations, with holdings in banking, shipping and retail.

Morales is a computer engineer with a passion for market research. And he wanted to do a lot of it at Cimex. But for a totalitarian state like Cuba’s, that kind of information can be the economic equivalent of military intelligence. It’s highly controlled.

“In Cuba it’s not allowed to do marketing research [in an] independent way,” he says. “So I had the special permission, but one day they cut my permission, and that’s the reason I [came] here.”

I see the Cuba trade embargo disappearing after the 2016 U.S. presidential elections. -Emilio Morales

He emigrated to Miami in 2007 – and his timing was especially good. Ailing Cuban dictator Fidel Castro had just handed power to his younger, more pragmatic brother, Raúl. To resuscitate Cuba’s moribund economy, Raúl started implementing free-market reforms.

 “So I think that, bueno, this is the new era now,” Morales recalls.

But he says Raúl didn’t go nearly far enough: “It’s poor. The result [has been] poor.” A big gauge, he agrees, is the spike in Cuban rafters arriving on Florida’s coast this past summer.

At the same time, Morales believes this week’s move by Obama raises expectations for change so much in Cuba now that Raúl will have to push deeper reforms.

“Raúl Castro doesn’t have [the] choice [of] going back,” he says. “So now the ball is in his court.”

Morales says that probably means Raúl will let Cubans start what he calls “real” companies: Bigger and more lucrative private businesses that can receive foreign investment and even “export and import products and services.”

IN THE WAY

If and when that broader opening happens, Morales adds, pressure from U.S. business and political circles to get rid of the trade embargo against Cuba – which has been in place for more than 50 years – will get louder.

 “I see the embargo disappear after the next [U.S. presidential] elections,” he says. “The period from now to the next election is the period the United States is going to prepare the way to eliminate the embargo.”

Should the embargo indeed disappear, Morales foresees tourism-related businesses – U.S. hotels and fast-food chains – diving into the island first. But he also sees potential markets for telecom, building materials, small loans – things that Cuba’s fledgling entrepreneurs need most.

Morales obviously has an interest in seeing the embargo go away: It would mean more clients who want to do business in Cuba needing his expertise. And he’s aware of the argument that dropping the embargo would simply give the Castro dictatorship an economic lifeline.

But from his rare perspective, he says the point is that keeping the embargo also deprives ordinary Cubans of a lifeline  – one they can use to undermine the Castros’ authority.

In that regard, says Morales, “I believe that it’s in the way.”

And he doesn’t think it will survive the storm.

Tim Padgett is WLRN's Americas editor. You can read more of his coverage here.