Japanese Firms Enter Cuba

Japanese companies are keen to make inroads into Cuba after the country last month fully restored diplomatic relations with the United States after more than five decades of enmity, informed sources say.

                   

A statue of feudal samurai Hasekura Tsunenaga, who in 1614 became the first Japanese person to visit Cuba, is seen in Havana in April. Many Japanese firms want to make inroads into the Caribbean nation after it restored diplomatic ties with the U.S. | KYODO

Cuba is just 150 kilometers from the United States. In addition, demand for infrastructure development is believed to be strong as many existing facilities, such as ports, are dilapidated.

The Japanese government is ready to help domestic firms win business in Cuba by using official development assistance, according to the sources.

The United States is unlikely to lift all of its sanctions on Cuba until President Raul Castro leaves office in 2018, according to a U.S. research firm. To Japanese firms, the key is whether they can get the jump on U.S. rivals.

Cuba “is in the midst of a bubble,” a source says. The number of Japanese businesspeople who visit Cuba for market research has shot up four- to five-fold year on year since last December, when the United States announced its plan to normalize its relations with Cuba.

A variety of Japanese businesses have sent officials, such as automakers, trading houses and construction companies.

“Some companies have already started preparations to set up representative offices,” a Japanese company official says.

The Japanese government hopes to strategically use grant aid and other assistance programs, mainly in the areas of medicine and agriculture, where Cuban demand is believed to be strong, to promote the use of products supplied by Japanese firms, according to government sources.

Cuba also has expectations for Japan. The Caribbean country is trying to diversify its trade partners as it took a devastating blow from the 1959 breakup of its relations with the United States, which Cuba’s economy had heavily relied on, according to a local academic expert.

But no sign can be seen that Cuba will take drastic economic reforms anytime soon after the diplomatic normalization with the United States. Companies newly starting business in Cuba need to work out medium- to long-term plans extending to the period after the current president leaves, sources say.

After the full termination of the U.S. sanctions, U.S. companies are likely to rush into Cuba. Anticipating this, European companies are stepping up preparations by holding investment seminars and through other means.

Seeds are being sown in Cuba, a diplomatic source says, adding that future success in the Cuban market will depend on the results of such preparations.