National Geographic

has a long and thoughtful article about the changes in Cuba. Nov 2012 issue that just came out.

Nothing to indicate that they are soliciting Gringo retirees yet :) but can that be far in the future (along with high speed ferries from Key West, Fort Meyers, and Miami)? I noticed a lot of advertisement for Christmas and New Year's trips to Cuba while I was in Tijuana.

Can that universal $50 month paid to brain surgeons and street sweepers continue in the face of new opportunity? Won't the brain surgeons, engineers, and university professors open private restaurants (or similar businesses) that cater to tourists and easily earn 10 or 100 X their government salary? Where does that leave the street sweepers?

One noteworthy quote in the article: "A job where you can't easily pilfer something is no job at all". The next few years are going to be very interesting, watching the transition from one of the last Communist economies to ??whatever??. I don't think they know yet, but one thing is sure, no shortage of investment capital for Cuba . .. . Probably some really great opportunities for "hobby farmers" ; their agriculture is a real mess.

A good map of the island too, this is Nat Geo after all.

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Taking some guesses

While I don't want to turn this into "Cuba living", I do think what is happening in Cuba is going to have a lot of impact on Nicaragua making it well worth discussing. Here are my thoughts.

Pre-Castro, Cuba was booming as pretty much an unregulated extension of the US. That is, it was an acceptable place for a usano to travel to for the typical mafia-related services that, today, typically require a trip to Las Vegas and other equally undesirable locations. Location and climate are the two big advantages Cuba has over any other place. The real key to Cuba's future is whether it can develop what it has which is socially acceptable rather than having another mafia takeover.

If Cuba can use the China model of development it should do very well. That is, maintain government control of the economy but with a capitalist face for the outside world. The biggest difference is that China sells products whereas Cuba needs to focus on selling services.

In particular:

  • Medical care and medical training -- Over the last 50 years, Cuba has sent doctors all over the world and has trained doctors from other countries. One of the recent changes in travel to Cuba is that you must have medical insurance. This can easily grow into medical tourism. Cuba has two big advantages over Nicaragua here: existing infrastructure and very short travel time from Florida.
  • Retirement communities: With baby boomers starting to retire, this could be a very lucrative option. By communities I am thinking this can be apartments, assisted living facilities and such. With a reasonable path for people and available medical care, this could be very lucrative. Short travel times would mean that family could easily visit thus increasing the income even further. The important ingredient is that the government needs to maintain ownership of the facilities rather than selling land to non-Cubans.

The problem is how you effect this transition without creating the typical have/have not society you see in Nicaragua and so many other Latin American countries. Cuba has a very different starting point than other contries because almost everyone is a have not. It seems that the key is to make sure you continue to offer government services such as educaiton and health care to everyone with the growing revenues from the services you sell to the outside world. If this is successful, Cuba is likely to get a lot of income that could otherwise to to other countries in this region.

For Nicaragua and other countries in this region, Cuba does not have the location advantage for potential customers from outside North America and, in fact, not even for people in parts of the US such as California. It would seem there is not going to be any shortage of baby boomers any time soon so, hopefully, Nicaragua can learn from Cuba rather than compete with it.