October 29, 2015

WE TAKE THEIR YOUNG, THEY GET OUR OLD:

Cuba's semi-untouched markets offer rare opportunity for U.S. businesses (Vikram Mansharamani,  October 29, 2015, PBS Newshour)

[O]il demand has decelerated, in large part due to a global economic slowdown led by China at the same time that fracking has dramatically increased supply. This combination pushed oil prices lower, reducing the compensation Venezuela provided to Cuba. Might the loss of Cuba's economic safety net have played a role in its desire to liberalize and negotiate with its neighbor to the north? I think so.

As the Cuban market opens, there will be many opportunities, and none is bigger, perhaps, than medical tourism. Cuba has one of the most concentrated supplies of doctors in the world, with 6.7 for every 1000 citizens. On this metric it is behind only Monaco and Qatar, according to the World Health Organization. But in Cuba, labor costs are extremely low: general practitioners make $44 dollars per month. Thousands of Canadians and Europeans already travel to Cuba every year for its affordable healthcare, but this may be a drop in the bucket compared to the opportunity.

Let's not forget that a nonstop flight between Havana and Miami would take less than 30 minutes. And with almost 4 million senior citizens in Florida alone, conditions are ripe for a boom in outbound American patients heading to Cuba for medical care.

General tourism from global consumers is also starting to boom. While travel for Americans is still restricted, tourism from the United States rose by more than 50 percent in the first half of this year. Total inbound international tourism to Cuba was up almost 20 percent last year. Not surprisingly, Airbnb recently entered Cuba, and the island became the fastest growing new market launch in the company's history. [...]

It will also need to build out its infrastructure to support the swarms of inbound vacationers that might flock to the island. It currently has 62,000 hotel rooms -- roughly the same as Phoenix -- but already has plans to build 13,600 more by 2016. Cruises to the island have quintupled over the past three years, but its ports need to be upgraded to host the biggest ships. And indeed there are billion dollar plans to upgrade the island's Port of Mariel and set up a special economic zone there, with much of the funding coming from Brazil.

Posted by at October 29, 2015 6:25 PM
  

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