Tags: Schiffer | Cuba | economic | prosperity

Entrepreneur Schiffer to Newsmax TV: Cuba at Dawn of 'New Period of Economic Prosperity'

By    |   Monday, 22 December 2014 06:08 PM

Expectations about U.S. business benefits from the resumption of diplomatic relations between the United States and Cuba may be exaggerated for the short term, Eric Schiffer, CEO of Patriarch Private Equity and DigitalMarketing.com, told Newsmax TV.

"But long-term the Castro brothers have signaled a new period of economic prosperity for both countries," he said on Newsmax TV's "MidPoint" show.

U.S. suppliers already have been selling corn to Cuba since the early 2000s and grain since 2005, Schiffer notes. "They do about $300 million in exports a year," he said.

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"My prediction is it will be about 10 to 15 times that over the next decade to 15 years. You're talking about an increase to about $4 billion, $4.5 billion a year, which is significant."

Normalized relations are more important for Cuba than the United States. "They need our money, they need our investment," Schiffer said.

"They know it. They see what China has done with that kind of investment and yet remain communist. So there will be a hybrid structure similar to China. And it's going to benefit the United States."

So when will U.S. companies be able to strike deals in Cuba?

"It depends on the product and service that you have," Schiffer said. "If you're in the hotel business, 10 years is realistic for a luxury hotel. But to get products over there — grain and what have you — I mean that literally can happen within a year."

With Cuba "sitting on a lot of oil," there are opportunities for U.S. energy companies, he points out. Medical supplies, vaccines and Cuban cigars also provide opportunities.

For companies such as ExxonMobil and Coca-Cola that had assets confiscated when Fidel Castro took over Cuba in 1959, "the State Department is saying that those types of claims aren't going to be addressed until full diplomatic relations are open, but that that will come, and there likely will be compensation or some type of benefit that'll be given to those companies," Schiffer said.

"However, there's greater upside to those companies just being able to get in, get their foothold. Companies like Coca-Cola that have so much to gain from this kind of opportunity, not necessarily all with the Cuban people but with people that are going to be visiting, tourists, etc. That immediately will increase by about 20 to 30 percent."

Steve Beaman, chairman of the Society to Advance Financial Education, offered much the same message as Schiffer to Newsmax TV last week.

U.S. companies won't see a windfall immediately, but eventually there should be openings in the food and infrastructure sectors, he told the network'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 longshot, but it's certainly a step in that direction," he said.

Our 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.

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Expectations about U.S. business benefits from the resumption of diplomatic relations between the United States and Cuba may be exaggerated for the short term, Eric Schiffer, CEO of Patriarch Private Equity and DigitalMarketing.com, told Newsmax TV.
Schiffer, Cuba, economic, prosperity
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2014-08-22
Monday, 22 December 2014 06:08 PM
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