Arkansas Economic Development Commission

AEDC Podcast with Mike Preston - How Castro Will Affect Cuba and Arkansas


December 28, 2016

AEDC Executive Director Mike Preston recently sat down with Mark Raines to discuss opportunities for Arkansas companies and growers to do business with Cuba. The discussion also includes reaction to Fidel Castro’s death and what this could mean for U.S. and Cuba relations.



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MARK: Welcome to the weekly podcast from the Executive Director of the Arkansas Economic Development Commission, Mike Preston. Each week Mike discusses economic development issues important to Arkansas and the entire country. 

Mike, since we last talked some recent news on the death of Fidel Castro. What was your first impression when you heard the news?

MIKE: Well coming from Florida we’ve all kind of been waiting on that day to get the news that Fidel had passed. Now being here in Arkansas and since having the opportunity to go to Cuba I understand now even more what it means for Arkansas, for the U.S., but more importantly for the Cuban people. Sure I think there are some strong feelings in Cuba. They lost Fidel and what does that mean for the future. I really look to the folks in Florida and around the country, the people who have been oppressed for many years by the Castro regime.

I think in them it instills a new sense of hope, a new sense of what is the future going to hold and I think it looks promising. The story is going to be told in the next couple of months, in the next year or so in how the new administration, and the U.S., handle relations with Cuba and what really is Raul, Fidel’s brother, going to do as the president.

There’s been a lot of speculation that maybe he’s kind of held back on implementing some reforms in respect to his brother, while his brother was still alive, that he didn’t want to tarnish his legacy of what he had done there while he was still alive. Now that he’s gone what does that mean? We’ve seen Raul starting to loosen things. Granted they’ve got a long way to go with Cuba and the Castro regime in how they’ve treated their people and oppressed the society there and the human rights violations they’ve had. They have a lot of that to work through but I think you see that sense of hope now, especially from the folks in the United States who escaped from Cuba. They have a sense of optimism that maybe things will now, that maybe that was the first domino that needed to fall to let the rest of the dominoes fall in place if you will.

There’s a Mark Twain quote that you never wish death upon somebody but sometimes you read the obituaries and you smile. I don’t think I got that exactly right but I think that’s how a lot of people in the U.S. and especially those who were oppressed by the Castro regime probably feel.

But to me, we have to turn a corner. Now is an important time for us and our relationship with Cuba. We need to move forward. We have a person who was in power for many many years where the struggle began between the two countries. Now we can get past that. Let’s take that next step forward. The Governor here in Arkansas has kind of laid the groundwork in working with businesses and the existing government to open doors. Let’s continue to open new doors for the U.S. and specifically for Arkansas so we can focus on getting to a place where while Cuba remains a communist country but they have a mindset like China, another communist country who embraces capitalism, who embraces completion.

If we could get that same embrace that they have in Cuba in that they do in China I think it’s going to go a long way. You know obviously we still have the human rights issues to work through and many other things but I think we’re going to start moving in that direction. 

MARK: You know Mike Raul Castro is not a young man either. He’s getting on up there in years and you can’t help but then look ahead to the future leadership of Cuba and what opportunities that might bring as well.

MIKE: That’s right you know Raul I think is 85 years in age and his brother just passed at the age of 90 so you know one will question how many years does Raul have still in power. I think he made a commitment that in 2020 or somewhere there he is going to step down regardless and there is going to be even more transition of power. So what is it going to look like in those next couple of months, the next year to the Cuban people and the Cuban government? How are they going to change things? How are they going to open things up to trade? Open it up to having more dialogue with the United States and what are they going to do in terms of giving concession in the U.S.?

I feel like the U.S. has moved leaps and bounds over the last couple of years and the Obama administration in normalizing relations. Cuba didn’t really give anything on that. It was all the U.S. coming to the Cuba side. What now is Cuba going to do and what are they going to give? Are they going to free some of the oppressed prisoners and political refugees in their country? Are they going to make concessions to kind of meet the U.S. in the middle? And if they do I think that’s how we really start to tear down those walls. We end the embargo and we actually have a free and open Cuba that we can continue to with because as we’ve talked about before it’s a market of eleven million people who were completely underserved. 

They don’t grow their own agriculture outside of tobacco and the cigar trade and some rum. Outside of that, they are dependent on outside countries to feed them and what better place that the United States and more specifically Arkansas to bring in poultry, to bring in rice, to bring in the infrastructure needs that they need. Now is the time to take those steps that we need to ensure the transition.

MARK: Let’s talk about that because the death of Fidel Castro has kind of prompted the president-elect to address the Cuba situation. Some tough talk from him about possibly rolling back some of the advances and gains that have been made by the Obama administration as far as cracking that door open.

MIKE: That’s right and I think the president-elect probably heard from the campaign trail that the U.S. gave too much into Cuba without Cuba coming to meet them in the middle. I think the talk of repealing what has been done is probably some political posturing by the administration so that they can get tough on those negotiations to make them realize that we’ve made several concessions so far. When are you, Raul Castro and leadership that will come after him, going to make concessions as well so we can continue the work that’s already been done? But let’s take that another step further. 

I think you’ll hear some new negotiation tactics. We’re all still kind of anxious to see how the new administration here in the U.S. will handle it. They have made it very clear where they stand but as they get to the actual details and negotiations, what is that going to look like? 

MARK: There are members of the president-elect’s own party that want to push that door open even wider including Arkansas Senator John Boozman who is a sponsor of the Agricultural Exportation Act. Talk about what that act would do to make it easier to open us those markets for Arkansas goods and American goods.

MIKE: Sure, I really commend Senator Boozman and his work on this because that’s really what we need in terms of getting agricultural products into Cuba right now is being able to extend terms of credit. Right now that’s part of the embargo that we have that we can’t sell on terms of credit going into Cuba.

There’s not a lot of cash in the country. It’s a cash-strapped country. From the government’s perspective and certainly from the people’s perspective they are just not going to be able to pay in cash. They’ve worked out terms with countries like Vietnam, Brazil, and Venezuela obviously. They are able to trade on terms of credit. They’re getting a lot of their agricultural needs, their commodities, from those countries. But you’re going to see an increase in tourism, hopefully from the U.S. but from Canada, Europe and all parts of the world. They’re (Cubans and tourists in Cuba) going to start eating inferior products, especially when it comes to rice. We have the good quality rice here in Arkansas that we can sell and that tourists are going to want and start to expect as they make those trips to Cuba. 

On the poultry side, we have the good quality poultry and protein products in the United States but more specifically in Arkansas that we can trade with them if we’re able to extend terms of credit, we’re going to be able to open that market and start to do trade deals in Cuba. What Senator Boozman’s bill does is exactly that. 

MARK: When you see numbers that the amount of farm acreage around Arkansas and around the country, it continues to decline every year. The rice harvest in Arkansas didn’t exactly have a stellar year and I’m seeing reports similar to that in other states. This would be a big shot in the arm to American farmers, wouldn’t it?

MIKE: Absolutely. That’s why the Governor saw it so important to talk to Cuba and to work on restoring of diplomatic ties. Because what does this mean to our agricultural community? What does this mean to our farmers? Once again, a market of eleven million people that we have not served or at least served in many years. The opportunity for us to add eleven million people to getting crops and poultry out of Arkansas… It’s going to help everyone from the big guy, the Tyson Foods and Simmons down to the guy who has the chicken house and a few hundred or a few thousand birds and a small rice field. It’s going to help everybody from top to bottom. Agriculture continues to be a leader in our state. This is something that we can do to help make sure it’s a leader but give us that boost to continue to grow the agriculture sector that we’re looking for. 

MARK: Mr. Castro has only been dead for a few days but looking ahead to the next year or so. Ideally, what would you like to see happen with Cuba and the nation?

MIKE: Ideally what I would like to see is a recognition from Raul and the other leaders in the government that the U.S. has made several concessions and their part to normalize relations and that Cuba makes as equal… I think they should make more steps to meet us in the middle.  That they lessen some of the restrictions that they have, they let go of the old regime mentality. They can start to focus on capitalism and trade. I would see concessions from the Cuban side so that we can continue the dialogue that we have. That we start to see more commercial flights, we see Congress act on Senator Boozman’s bill, that we can extend those terms. This isn’t going to happen overnight. I don’t think you are going to see a full sail change just happen like that. 

It’s going to be many multiple steps. I think the passing of Fidel is another step that makes us realize the importance of what needs to be done. Let’s go ahead and take that next step and pass Senator Boozman’s bill. Let’s have the Cuban government make their concessions and move to the middle and they can get some of their human rights issues taken care of. They can start to work with us a little more openly and we can discuss trade and other issues. 

MARK: This has been the weekly podcast from the Arkansas Economic Development Commission and Executive Director Mike Preston.  We’ll return with another important economic development discussion next week.