Following the demise of Fidel Castro, there have been wide expectations in the business community around the possible acceleration of the liberalization of the Cuban economy, and the ultimate end of the US embargo.
To this respect, FSG recently published an article on Harvard Business Review’s online platform discussing the relative importance of the passing of Fidel Castro and the election of President Trump for doing business in Cuba. Here, we summarize our conclusions from this article with a matrix showing the likelihood of different outcomes through 2018, and their level of impact on business.
Given the current context, FSG believes that the most likely scenario for Cuba is one in which the government continues to advance liberalizing reforms in the short-term (though at a slow pace), while the incoming Trump administration (even after the death of Fidel Castro) maintains the US embargo of Cuba in place, at least during his first two years in office. Nevertheless, there are sufficient forces in play to justify a base case view in which Trump retains most of Obama’s policies of economic and diplomatic rapprochement. For business, this means that current evolving opportunities may continue to develop, but that the ultimate end of the embargo, and more rapid economic expansion, is likely at least a few years away.
Clients can access the full report, Sizing the Cuban Opportunity, on the FrontierView platform. Not a client? Download the executive summary here, or purchase the report directly on FSG’s online store.