Caribbean & Central America - February 2015 (ISSN 1741-4458)

Netflix, American Express and Mastercard were some of the big US companies to announce a move into Cuba in early 2015, following the historic deal between the two countries to renew full diplomatic relations announced in December last. Google and the agricultural giant Cargill were among the big US companies heavily lobbying President Barack Obama last year to take his decisive step. With a population of 11m, Cuba stands to be a major new consumer market for US firms, who are anxious not to lose out on this lucrative opportunity to rival Canadian and European firms already well established on the ground.

Shortly after the US Department of Treasury's Office of Foreign Assets Control published revised guidelines on trade and financial transactions with Cuba, as per President Obama’s moves to liberalise economic relations alongside the diplomatic thaw, Mastercard announced it would allow its cards issued in the US to be used in Cuba, effective as of 1 March. American Express followed suit, saying that it planned to begin business activities in Cuba. Visa likely will do likewise; under the new guidelines, US visitors to Cuba can use US credit and debit cards.

The Netflix move is more of a pre-emptive strike, as despite existing and planned fibre optic cables connecting from Venezuela/Jamaica and Miami, most of Cuba does not yet have the Internet capacity for online streaming. However, in a statement, the CEO and co-founder of the California-based company, Reed Hastings said Netflix would be available in Cuba as of 9 February. The current Netflix monthly subscription of US$7.99 is clearly unaffordable to most Cubans, where the average monthly wage was just under US$18 in 2014, according to the national statistics office (ONE), which also reports an internet penetration rate of just 5%, one of the lowest anywhere in the world.

Boosting electronic communications between the US and Cuba has been strongly promoted by President Obama. Cuba has long complained about such surreptitious efforts by the US – ranging from the Miami-based Radio Marti broadcasts to the ill-fated smuggling of computer equipment and satellite phones by Alan Gross; to last year’s rather comical revelations of various covert operations by the US Agency for International Development (USAID, for full details of which see the August 2014 edition of our sister publication, LatinAmerican Security & Strategic Review). Since 2009 Obama has taken significant steps to end restrictions on exports to Cuba of communications hardware, software and services.

Opening up the lines of communication

In April 2009 Obama announced changes under which US telecommunications providers would be able to establish fibreoptic cable and satellite facilities linking the US and Cuba, as well as request licences to enter into and operate under roaming service agreements with Cuban providers. Additionally, US satellite radio and satellite television service providers could get a licence to provide services to customers in Cuba. Persons under US jurisdiction would be allowed to activate and pay US or third-country service providers for telecommunications, satellite radio, or satellite TV services provided to individuals in Cuba, save for certain senior Communist Party and Cuban government officials. People would also, under a licence exception, be able to export to Cuba communications devices such as mobile phone systems, computers, software and satellite receivers.

Obama’s predecessor, President George Bush (2001-2009), in 2008 announced that Cuban-Americans could send mobile phones to family members in Cuba. He also permitted faith-based organisations and non-profit groups working with Cuba to provide computers and Internet access to the Cuban people. That move was in response to President Raúl Castro’s decision the same year to lift the ban on the use of mobile phones by Cuban citizens, as part of his plans to ‘update’ the Cuban economy.

• Google makes web development tools available to Cubans

Following his widely publicised trip to Cuba last year, Google’s CEO Eric Schmidt stated: the “blockade” makes absolutely no sense to US interests: if you wish the country to modernize the best way to do this is to empower the citizens with smart phones (there are almost none today) and encourage freedom of expression and put information tools into the hands of Cubans directly”. Google subsequently launched its Chrome browser in Cuba, followed in November 2014 by its Google Play developer console and Google Analytics. Under the US embargo, it only offers free apps on Google Play, and only the free version of Google Analytics. Notably, third-party developers wishing to offer their free apps in Cuba can do so via Google Play.