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What US-Cuba Normalisation Means For Caribbean Investments

Finance

February 14, 2025

In December 2014, the United States and Cuba shocked the world by agreeing to begin partially normalising relations.

Since then, investors have been clamouring to become a part of a potential inflow of growth into a country that had received the largest US-based investments in Latin America (outside of oil-rich Venezuela) up until Fidel Castro came to power.

What has happened to Cuba since then is a classic example of what happens to any country that practises economic isolation

Propped up by the Soviet Union until it fell in the early 1990s (when Cuba soon after fell into famine), Cuba’s economy has faltered as it has been isolated from much of the world until recently.

In addition to its strategic geographic location, a country so lacking in basic services and all sources of investment for such a long period seems to be a huge opportunity for those interested in both long and short-term returns.

In fact, US broadcaster CNN has proclaimed that Cuba could replicate what Vietnam has done for its own economy over the past few decades, all while being just a little over one hundred miles from Florida.

Vietnam as a Model for Success

When looking at the future of Cuba, Vietnam’s success is indeed something to strive for.

In 1995, the US normalised relations with Vietnam — another formerly isolated communist country. 

Since then, American companies like Microsoft and Intel have poured US$11 billion into more than 700 projects in the country. Many are calling Vietnam the next China due to its lower manufacturing costs and emerging middle-class market.

Today, Vietnam is on pace to become one of the largest economies in the world. As a signing member of the Trans-Pacific Partnership (TPP), it has ensured its place as a trading partner with the West and provided a model for Asian countries wishing to do the same. 

In addition to TPP, the country has also recently passed trade pacts with the EU and South Korea.

In Cuba, there are several reasons that this enthusiasm is warranted, but a healthy bit of caution is also necessary.

There’s still a significant portion of the population that does not have access to the internet and some do not own their own homes. 

While tourism is steadily growing, with increasing numbers of commercial flights, when some people can’t even own property, it’s not reasonable to expect a middle-class in the country to grow quickly.

Secondly, the country’s infrastructure still needs investment. Though it has improved, a weak banking system, shoddy roads, and frequent power outages are still issues.

And, as one of the more corrupt countries in the world, doing any form of business will be more difficult as all business goes through the state.

Finally, the Cuban government has shown that it operates out of short-term convenience. While the steps to economic liberalisation and US-Cuba normalisation that have been taken are very encouraging, there are no guarantees that the process will continue along smoothly and unimpeded.

Despite its inherent advantages, rather than being another Vietnam, Cuba is much more likely to follow the path of Myanmar, at least starting out.

Opportunities in Cuba Following US-Cuba Normalisation

That being said, there are still several reasons why  Cuba could be a good long-term investment option.

The country has a decent education system, which has been praised in the past as the best in Latin America. 

While Cuba is often heralded as having a great medical system, doctors in the country often leave their jobs to become taxi drivers and waiters, as those positions pay better.

Being able to draw on this talent and reward highly skilled labour that requires an education is definitely an opportunity for those looking to invest long-term.

Many of the negatives of doing business in the island nation are also long-term positives for those willing to invest. 

Cuba lacks decent businesses in every sector, from banking to transportation to the more obvious options like tourism, food and entertainment. Coming into the country with an open mind, experience, and a will to succeed presents an opportunity for anyone willing to adapt to its government and culture.

What’s most exciting about Cuba opening up is what it means for the entire Caribbean region.

As Cuba achieves its potential, like Vietnam, it will soon become a valuable customer for both the United States and its immediate Caribbean neighbours. 

Outside of small countries that benefit from tourism and favourable banking and tax laws, much of the region is highly underdeveloped despite its close proximity to the US.

As the largest country in the Caribbean, Cuba’s success will only help those surrounding it.

US Normalisation with Cuba: FAQs

How are US-Cuba relations now?

US-Cuba relations are mixed at best. While there is some engagement, significant tensions still exist. 

How are US-Cuba trade relations?

While President Joe Biden made steps to ease the trade restrictions with Cuba in 2025, it remains unclear how this will play out with Donald Trump in office.

How is Cuba’s regional economic development?

Cuba is making small improvements to its economy but it’s still considered economically challenged in comparison to other countries in the region. 

How is the Caribbean economy performing? 

The Caribbean region, in general, is experiencing a growth in GDP. While many Caribbean nations face high debt levels, limited industries and climate vulnerability, most countries have steadily growing economies.

How are Caribbean tourism levels?

Data suggests Caribbean tourism has returned to pre-pandemic levels, with many destinations experiencing significant growth.  

Should the US normalise relations with Cuba further?

There are arguments for and against the United States further normalising relations with Cuba. It could open further business opportunities for both nations, although there are political and human rights concerns.  

US-Cuba Normalisation: What Does This Mean for You?

The bigger lesson to be gained here is how much government decisions can affect your life.

Countries like Myanmar, Cuba and even Argentina were once some of the wealthiest and most influential in their respective regions, but today, all are known for their backward policies and shoddy infrastructure and as places for ‘project’ investments as they finally begin to turn things around.

It’s foolish to believe that just because your country has been powerful and wealthy for a period of time, it will remain in that position regardless of its government’s behaviour.

Here at Nomad Capitalist, we’re continuously looking for countries across the world that are doing things the right way so you can ‘go where you’re treated best’.

If you’re ready to invest (in Cuba or elsewhere), let us know and we can begin today to develop the right plan for you.

Joe Elvin
Written by Joe Elvin
Fact-checked by:
Tom Kotze
Reviewed by:
Kevin MacDermot

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