Tuesday, September 25, 2007

Canadian: Cuba has a different system, but people are fair and honest

Tue, September 25, 2007

A Canadian businessman has published an interesting, fair, and unbiased article in the Toronto Sun. The article is titled "With capitalism on the rise in socialist Cuba, a Canadian businessman says now is the time for foreign firms to venture in." Making the Cuban system work better does not mean a return to the dog-eat-dog capitalism of the Batista era.

Here is the article:

By JOE WARMINGTON

HAVANA -- His phone rings and he answers in Spanish.

"Hola."

The call is from his hometown of Montreal. He switches to French.

"Bonjour."

When he hangs up the phone, the 53-year-old Canadian looks out over the Malecon and makes this comment. "There are lots of opportunities here. And I am a facilitator."

Now he's speaking in English.

Jean Galipeau is a man of many languages. And many talents.

He is one of the few Canadian business consultants in Havana bringing Canadian investment to socialist Cuba. But it's not just the languages that helps make it work for him. It's his knowledge and experience. "To be successful down here, you need two things," he said. "Patience and money."

You actually need a third.

"Contacts."

Galipeau is a man who has them. For a fixed daily fee, he works in association with the CIH (Centre International of Havana), putting company officials in touch with the people they need to meet in Cuba.

He has as many as seven companies exploring the market at the same time. The inquisitive business people are referred to him by the Montreal firm, Export Assistance Canada -- or referred to him by others.

Galipeau also acts as consultant in what he describes as the "transfer of technology" for the Group Cesigma, a firm specializing in environmental technologies under the ministry of science technology and environment.

"In Cuba it's all about contacts," he said. "You have to have persistence. You cannot do business with the Cubans by Internet or by telephone. You have to be present down here on a regular basis."

This is why Galipeau lives in Cuba. In fact, if you are looking for him, he is normally in a lounge in the Melia Cohiba Hotel with a phone by his side. "I have lived in the hotel for four years," he laughed. "It just makes more sense than living in a house. Everything I need is here."

He has been working on developing businesses in Cuba for nine years. Prior to that, he was an executive in the private security business. He sees his future here in Havana.

"I love it here," he said. "The people are great and if I want to go to the beach, I can get there for a $12 taxi ride."

The rest of the time he's working -- "seven days a week."

Contacts and meeting face to face are the only way to move the layers of bureaucracy. But it can be done and it has been done. There will be more done in the future.

"As Canadians, we have to be getting in here more now," he said. "We have to be ready and ahead of the Americans and everyone else should the day come when Cuba opens up more than it currently is. If it ever does, if you are not in, you will find it hard to get in."

Galipeau views a more open society -- possibly, in the next few years -- not only beneficial for foreign companies, but also for ordinary Cubans.

"I was talking a few years ago to a Cuban official who made the comment that we would not want to turn into a capitalist society in 24 hours like they did in Russia. It needs to be more progressive."

But with Acting President Raul Castro at the helm, there is a desire to speed up the progress.

"He has addressed that. He wants to improve the living conditions of its people, raise their salaries."

It takes capital to do that. Ventures and deals. Raul has made some with other countries in different sectors like tourism, mining and oil and gas -- and his government has many other projects on the table in other sectors like the sugar industry.

Drive around Cuba and you get a look at a poor country. Most workers earn a monthly income of $15 and receive government food rations of rice, beans and other products. Many cars are left over from the 1950s and the infrastructure is in decay.

Galipeau doesn't deny this but said it is also deceiving. There is more money here than people think, he added. In Cuba, there are more than 168,000 people who are millionaires in the Cuban peso. Transferred into the Canadian dollar that could mean a person is worth something close to $40,000 or $50,000. That is a lot of money here.

For business people in Canada, it starts with what they need here -- and that's lots. Paint, nails, hammers, glass, computers, clothing -- Cubans have a hunger for such items.

"Agriculture is a good sector," said Galipeau. "Fertilizer and farm equipment. Biotechnology is another."

The goal is to get products produced locally for domestic use and for export.

Canadian firms are needed to put up capital and provide technological know how. Cuba supplies the work force, the shop or building -- and the market.

But where such ventures were once embarked upon with Cuba owning 51% of a company, it is now called an association of co-production. "Today you are investing in Cuban companies," said Galipeau. "But the contract would be negotiated and they come out fair. There is profit to be made."

If Cuba was to open up similar to what is happening in China, those already doing business here would have an extreme edge. There are dozens of Canadian companies already taking that chance.

It does not work for everybody. Some companies never seem to get a partnership moving due -- very often -- to a lack of follow up. "It is getting better but it can take time," said Galipeau. "I recently got a contract for one company that took more than five years to get it done. When I called them, they were surprised. However I told them I had never stopped working on it."

Other deals have been formulated in mere months and this has been more his experience of late.

With each ministry having its own person that needs to sign off on a contract, it often comes down to the discretion of individuals. But, he said, once a deal is done with a Cuban, it is firm.

"They are good people to work with," said Galipeau. "It is a different system, but the people are fair and honest."

As the younger generation moves up, he said, you can see a thirst for moving faster. "Things are definitely improving, no question," he added. "I have been here for years and I have seen lately bars and cafes go up along the Malecon and other development. It is happening."

And it will continue to happen as things move forward. In the meantime Galipeau, who can be reached at Jgalipeau2006@gmail.com, looks at his phone and waits for it to ring. He speaks many languages but the one he speaks best is how to help Cuban and Canadian business people make money and work together.

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