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Regime change in Cuba won't be boost for Illinois
By Michael Sean Comerford | Daily Herald Staff

Former Gov. George Ryan met with Fidel Castro in 1999 in hopes of paving the way for Illinois companies to do more business in Cuba. Since then, little has changed, experts say, and the immediate prospects look dim despite Castro's retirement.


Mark Welsh | Staff Photographer

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Published: 2/20/2008 12:14 AM

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In the fall of 1999, a newly-elected Gov. George Ryan lead a delegation to Cuba intending to lay the groundwork for Illinois firms should a regime change end the U.S. embargo.

Executives from Peoria-based Caterpillar Inc., Moline-based Deere & Co., Decatur-based Archer Daniels Midland Co. and Deerfield-based Baxter International Inc. flew down on a United Airlines flight to Havana to meet with Fidel Castro.

Yet as Castro, 81, announced Tuesday he would not accept another term in office when parliament elects a new president this weekend, the intervening years and the pending regime change hold little immediate prospect for Illinois businesses.

"That was really more of a Ryan story than it was an economic story," said John Pelissero, vice provost and a political science professor at Loyola University in Chicago. "The issue was to be ready when there is regime change. But I don't think anything really changed for Illinois."

The U.S. economic embargo of Cuba is going on 48 years, after Castro seized power in a revolution that resulted in the nationalization of both individual and U.S. properties.

Reacting to the news Castro's brother, Raul Castro, may be taking over the presidency on Sunday, the Bush administration said it doesn't intend to lift the embargo anytime soon.

Due to the lack of a U.S. presence, other countries have invested in the country.

Venezuela's Hugo Chavez barters oil for doctors and teachers. Spanish hotels, French power companies, Italian car dealerships and Canadian cell phone companies are present, but U.S. firms are barred from even having subsidiaries working in Cuba.

Economists say Cuba is a potential market for corn and soybean producing states such as Illinois.

Cuba also needs development of its tourism, electronics, telecommunications, high tech, heavy machinery and health-care sectors.

Representatives of Baxter and Caterpillar said Tuesday they don't have any business in Cuba.

ADM said it has limited sales in the Caribbean island.

"Since December of 2001, ADM has participated in trade with Cuba under the Trade Sanction Reform Act, established by Congress to provide food and medicine to the Cuban people," the company said in a statement Tuesday. "Those sales have never been a substantial part of our business."

Because the embargo allows exports of food and medicine, Illinois exported $5.6 million to Cuba last year, according to the Illinois Department of Commerce and Economic Opportunity. The top export was agricultural products.

Analysts agree the U.S. presidential elections will probably need to be decided before any major trade changes are made.

Still, another barrier to investment is the lack of hard currency in Cuba. Once linked to the U.S. dollar, its economy switched back to the Cuban peso a few years ago. Many of its purchases are bartered.

The entire Cuban gross domestic product is estimated at $46 billion. The Chicago-area gross domestic product tops $455 billion.

"Their markets aren't that lucrative," said Antonio E. Morales-Pita, a Havana-born economist at DePaul University. "But I believe 2008 is an important year because Castro is leaving."