Tags: Beaman | food | infrastructure | Cuba

Economist Beaman Sees Opportunities for US Food, Infrastructure in Cuba

By    |   Sunday, 21 December 2014 09:22 AM

President Barack Obama's decision to resume diplomatic ties with Cuba won't instantly create a bevy of opportunities for U.S. companies, Steve Beaman, chairman of the Society to Advance Financial Education, told Newsmax TV.

But eventually there should be openings in the food and infrastructure sectors, he said on Newsmax TV's "MidPoint" show.

"Folks need to recognize that basically what we've said is let's take Cuba off the terrorist list. So this is not normalization of relations by a long-shot, but it's certainly a step in that direction," he said.

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U.S. companies won't be entering virgin territory, as European companies have been involved in Cuba for years. But, "American companies are looking to see how they can get in there," Beaman said.

"A lot of U.S. farmers are singing, because if they can get in there, we're looking at around 500 million tons of wheat that could ship into Cuba. They're going to need our food and agriculture products first."

And then comes infrastructure, he said. "Companies like Caterpillar are looking aggressively at the infrastructure development that could take place in Cuba," Beaman said.

"That presumes the Cuban government has the hard currency to pay for it, which is a whole other issue. But they're going to have to rebuild that country from the ground up. American companies, being 90 miles away, are positioned to capture a large share of that market."

But there will be plenty of competition and not just from Europe, Beaman said. "Let's not forget China is aggressively pursuing Cuba right now," he said.

"Companies from around the world are going to be knocking at their doors, because American tourist dollars will come down there, and that's going to be a huge boom for their economy."

On a separate subject, plunging oil prices, the drop to five-year lows benefits consumers by leaving more money in their pockets, Beaman noted.

"But it's also geopolitically dangerous, because it hits those countries that rely solely on oil for their economies, specifically Russia." That's largely true for Iran and Venezuela too.

And some U.S. producers will suffer too, Beaman said. "With such a significant drop from $110 a barrel down to around $56 [$57.13 as of Friday afternoon], you're actually putting at risk the ability of some of these [U.S.] shale oil producers to profitably run at that level," he said.

Most of those producers need a price in the low $80s to run a profit. "And so you can see a reverse thing, where the supply now starts to taper off a bit," pushing oil prices back upward, Beaman said.

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President Barack Obama's decision to resume diplomatic ties with Cuba won't instantly create a bevy of opportunities for U.S. companies, Steve Beaman, chairman of the Society to Advance Financial Education, told Newsmax TV.
Beaman, food, infrastructure, Cuba
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2014-22-21
Sunday, 21 December 2014 09:22 AM
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