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July 31, 2001

Carry your cloak and dagger in Cuba

News24, SA. July 31, 2001.

Havana - Packing your briefcase for a business trip to Cuba? Two items not to forget: cloak and dagger.

The economy of Fidel Castro's communist-run island - although still under firm state control - is hungry for foreign investment and opportunities abound. But when it comes to getting down to business, put down your MBA reading and pick up an old John LeCarre novel.

Secrecy and mistrust does not only come from government officials encouraged for years to publicly despise profits and other capitalist tenets.

The foreign business community, caught between the notorious sensitivity of Castro's officials and the fear of US reprisals for breaching the 42-year-old US trade embargo against Cuba, is generally tightlipped and at times seems almost pathologically anxious to keep a low profile.

John S Kavulich, head of the US-Cuba Trade and Economic Council, a non-profit group that studies the island's economy, said many foreign companies trading with or investing in Cuba "want to stay under the proverbial radar screen".

Public comments found irritating by the Cuban government can translate into payment delays, and can also hold companies up to scrutiny by US regulators monitoring sanctions, Kavulich said.

"I'm sorry, we are not authorised to give out names of Canadian companies working here," said a duty officer at the Canadian embassy's commercial section.

"Impossible," responded Alain Marinetti, commercial director for French construction giant Bouyges, when asked to talk about its current projects in Havana, which are said to include at least two hotels.

"I'm afraid we have nobody there who is authorised to speak to you," said Isabel Moreno at the press office of Spanish bank Caja Madrid, which has a majority share in a joint venture with Corporacion Financiera Habana and reportedly plans to install automatic teller machines around the Cuban capital.

Add to that the old saw used by state employees all over the former socialist bloc - "We pretend to work and they pretend to pay us" - and the recipe for 9-to-5 frustration is complete.

During a recent two-week quest for interviews, a few interesting variations on the usual "Sorry, he's in a meeting" excuse were heard.

"Oh, she just got a call from the police. Her house has been burgled and she had to step out to file a report."

"Sorry, but the secretary was suddenly taken sick after your call and forgot to transfer your appointment into the official agenda."

A number of others made appointments but simply failed to show up or suddenly were substituted by lower-ranking representatives with no clearance to give any meaningful information.

Once you get around to hammering out a deal with Cuban officials, expect a long, rough ride from well-prepared negotiators.

The latest edition of Cuba: a guideline for Canadian business, prepared by Canada's embassy here, says Cuban negotiators are "exceptionally well-prepared", but sometimes focus on "short-run financial gains that can ease the country's immediate shortages of hard currency and technology".

"Negotiations with Cuban government entities are characterised by a deep distrust of capitalist motives," the report said, adding that getting approval for a joint venture can take up to three years.

The report also said the Cuban negotiating tactics often don't "follow what foreign executives would consider 'good faith bargaining'".

"In the manner of a used-car salesperson who claims his boss won't approve the deal he has just signed with a customer, Cuban negotiators frequently discover previously undisclosed constraints," it said.

Asked about the report, several foreign businessmen said they thought it was too harsh.

"I think this country is a very straight country," said Stephen Marshall, a British businessperson who runs four joint ventures here.

"Getting a deal done requires a very deep understanding of the idiosyncrasies of Cuba, but that's also true of other countries."

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