A Cuban IT director talks with CIO's Senior Web Editor Martha Heller
about the country's efforts to acquire information technology
CIO.com. May 4, 2001.
IN HIS ROLE AS THE IT director of the Instituto de Información Científica
y Tecnológica (IDICT) of Cuba, Luis A. Mourelos oversees the management
and services provided by all areas of the organization, including de National
Science and Technology Library. He provides consulting services to the teams
that create Enterprise Information Management Systems. Mourelos recently went to
Boca Raton, Fla., to deliver a speech at the CIO Perspectives conference. We
caught up with him after his talk and asked him about Cuba's struggle to acquire
IT in the face of a U.S. embargo.
CIO: What are the IT problems that are unique to Cuba?
Mourelos: Perhaps it's the problem that we have to choose from among ISPs
from parts of the world other than the United States because of the embargo. I'd
like to say also that what the United States calls an "embargo" we
perceive as a blockade. This is not really a good time and place to talk about
this, but "embargo" sounds very soft to us. This is an
extraterritorial embargo that allows the United States to sanction companies
from other countries for simply having entered into a business relationship with
Cuba. For example, there is a company called Sherrit, which is a Canadian mining
company that does business in Cuba, and day after day it is sanctioned by the
United States; its executives are sanctioned, and when it tries to do business
with us they are sanctioned.
CIO: What form do the sanctions take?
Mourelos: The executives are not allowed to enter the United States, and
they cannot use U.S. banks. If there is a boat from that company and it loads or
unloads in Cuba, then it can't stop at any U.S. ports. This is one condition
that Cuba suffers, but there's another—prices—that could also be
because of the blockade. Cuba is very limited in its ability to borrow money.
Any bank that has its roots in the United States—and many do—cannot
loan Cuba money. Since we can't ask for loans from these banks it makes it very
difficult to do business in the area of IT. You have to get a letter of credit
in order to ensure payment and if you don't have a bank that will issue it, you
can't make a purchase. Even at the national level in Cuba, in order to invest in
the information and communications infrastructure, it is often necessary to use
credit.
CIO: In your talk, you suggested that there are ways to do business with
Cuba that are legal. How is it done, and how widespread is it?
Mourelos: According to U.S. law, it is illegal to do business directly with
Cuba, but it is possible, especially if you are a multinational with many
companies around the world. I believe personally, although I don't speak for my
government, that through offices or representatives in third-party countries
that you can do business in Cuba without any problem. [Editor's note:
Spokespeople for the U.S. Department of Commerce and Department of the Treasury
say that it is not legal to use third-party countries or companies to sell goods
or services in Cuba.]
CIO: Are there U.S. companies trading with Cuba?
Mourelos: Yes. There are U.S. companies that are doing business in Cuba:
Western Union is one, DHL is another.
[Editor's note: Spokespeople for Western Union and DHL say they do operate
in Cuba, but do so with special permissions and in accordance with the laws of
the U.S. government.]
CIO: Why should American companies go through the trouble to take the back
door to trade with Cuba?
Mourelos: I think that Cuba is one market that in the last 40 years has done
a very good job developing our human resources. We have an intellectual capital
that in my opinion would be able to very quickly take advantage of not just the
technologies and the applications that already exist, but also add their
experience and their knowledge in the integration of those solutions in our
culture and part of the world. One example, in another sector: Right now more
than 2,000 doctors in Cuba offer help to the health systems in various countries
in Latin America and in the Third World. So if you are trying to bridge the
digital divide, a relationship with Cuba could help. Also, I think it would be
comforting for IT companies to see the kind of receptiveness and the speed with
which business can be done in Cuba because we have such highly qualified human
resources. Doing business in Cuba will help companies take their business to
other countries as well. Cuba could help IT companies launch their solutions in
other Spanish-speaking Third World countries. We're already doing this in health
care. Also, I want to say something the might really illustrate what I believe
about this. Any one of these IT companies has shares on the stock market; and
they're very dependent on the rise and the fall of the stock market. Our money
is not on any stock market; any stock market can have a downturn, but that's
never going to happen with those who invest in Cuba. The disadvantage of being
isolated from the rest of the world can actually be an advantage, because
whatever happens in the rest of the world, your money is safe in Cuba.
CIO: Is Cuba providing any incentives to companies that set up operations
there?
Mourelos: Well, I think the main incentive is that the business that would
be done with Cuba would be done with state run businesses. There is no private
business in Cuba. There is only state run businesses, and this offers an
incredible guarantee for the security of that business transaction because the
law protects those contracts. The government guarantees that business. The word
of the government is the word of the country.
CIO: One big fear for U.S. companies is that their companies will be
nationalized, as they were after the fall of Batista. U.S. companies don't fully
trust the word of the government.
Mourelos: There are various ways to do business with Cuba, and we have a law
that backs up and protects any foreign investment. It would be important to read
that law [I don't know every word in it] to see what the advantages and
disadvantages are. What I know is that the majority of businesses that do
business in Cuba form a partnership in which the investing company provides part
of the capital: they provide the money and the know how, and we supply the
infrastructure and the human resources. These types of businesses are called
mixed businesses. Fifty-one percent of the shares always belong to the Cuban
government and 49 percent belong to the investing foreign company.
CIO: Who are the big investors in the IT infrastructure in Cuba?
Mourelos: The principal one right now is an Italian telecommunications
company in a "mixed company" with ETECSA, the Cuban telecommunications
agency, which is run under the purview of the Cuban IT and Communications
Ministry (MIC). Telefonica de Espana is investing heavily, although it is just
entering Cuba now.
CIO: What is the level of Internet penetration in Cuba?
Mourelos: The Internet is still at an organizational level in Cuba, but this
is due primarily to a lack of telecommunications infrastructure. Because of this
inadequacy, the government has had to prioritize who can have access. The entire
country of Cuba has 10 megabytes of Internet access. That's it! For that reason
the government has had to decide to give access to research organizations—the
expert portion of our business community, the health organizations, hospitals,
educational organizations, universities. We've had to establish priorities based
on what the infrastructure allows.
CIO: Is there a perception that the Internet is a threat to the current
political ideology, and has the Cuban government imposed any censorship on the
Internet?
Mourelos: Do you mean in terms of access? That's the question I'm always
asked. The answer is yes, but it has to do with the priorities that the country
has established and the limitations of the infrastructure.
CIO: Do you think if the infrastructure could handle more access that the
government would allow more access?
Mourelos: In one way or another every country decides to what degree you can
access the Internet and what you can't do and where you can go and where you
can't. I think Cuba also has a right to at least think about how to protect its
culture, its society and its people from things that could be damaging to them.
Posted: May 4, 2001
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