US Chamber head urges Cuba to open economy more

U.S. Chamber of Commerce President and CEO Thomas Donohue speaks during a conference at the auditorium of the University in Havana, Cuba, Thursday, May 29, 2014. Donahue urged Cuba to deepen economic reforms in the island, and the US to take steps to normalize relations with the Caribbean nation. (AP Photo/Ramon Espinosa)

HAVANA (AP) — The head of the U.S. Chamber of Commerce has a prescription for communist-run Cuba’s struggling economy: less government control and a heavier dose of the open market.

In a speech at the University of Havana, Chamber president and CEO Thomas J. Donohue cautiously praised what he saw during a visit to evaluate economic reforms that have hundreds of thousands of islanders working independently of the state.

But he added that the challenge now is to consolidate and expand the changes.

“We at the U.S. Chamber of Commerce believe in the power of private enterprise to help societies progress and improve,” he said Thursday, before heading back to the U.S. “And it is in that spirit that we come to your country … and offer these observations.”

About a dozen business leaders arrived this week on the chamber’s first trade mission to Cuba since 1999. During the visit they met with entrepreneurs and government officials to talk about the reforms, which President Raul Castro began in earnest in late 2010.

“We have come to Cuba to assess the seriousness of this effort and to encourage and support it in any way we can,” Donohue said. “We’re trying to engage Cubans of all walks of life and explain how private enterprise can dramatically improve the lives of your citizens.”

State television reported Thursday night that Donohue met with Cuba’s president. It showed images of the encounter, but did not say how long it lasted or what they discussed.

About 455,000 islanders are currently running or working for private small businesses as a result of the reforms, and about 450 new non-agricultural cooperatives are operating autonomously.

“Their efforts to start their own businesses show that the spirit of entrepreneurship and enterprise is alive and well in the hearts of many Cuban citizens,” Donohue said. “And indeed, when that spirit is properly encouraged and given the freedom to operate, the country as a whole can do much better.”

He cited China and Vietnam’s economic overhauls as a model for improving Cubans’ lives. “It can happen here, too.”

Cuba has also decentralized a number of bloated state-run businesses and undertaken a big port project west of Havana that seeks to turn the sleepy fishing town of Mariel into a regional shipping hub. An adjacent special economic zone aims to lure much-needed foreign investment.

Island officials say they are not abandoning the socialist principles that have ruled here for more than 50 years, but rather are “updating” Cuba’s model to perform better in a globalized economy.

Donohue disagreed with those back home who criticized the trade mission by arguing it would be a mistake to strengthen commercial ties with Cuba due to questions about its record on civil liberties and political freedoms.

He said the Chamber of Commerce takes human rights concerns seriously, calling it an issue that should be part of a “constructive dialogue” between the U.S. and Cuba.

He called for Washington to allow imports and exports of goods and services involving a number of sectors in Cuba, saying it would be in the interests of American citizens and U.S. business. He cited telecommunications as one area with great potential.

Donohue said the chamber has lobbied for years to end the now 52-year-long U.S. economic embargo that bars most commerce between the two countries. Some exceptions exist for food and agricultural goods, but as Cuba turned to other partners such trade has fallen by nearly half in recent years to about $509 million in 2012, the most recent year for which officials figures are available.

“Changes take time, but if (President Barack Obama) wants to get it done before the end of his term, he’s got two years,” Donohue said. “And it’s going to take a while to do it, so he’ll have to get busy.”

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