Country specific business

analysis of Cuba and India

By,

T.Deepthi(5133)

Manish(
Republica de Cuba
 Demography
 Population: With a population of over 11 million people,
Cuba is one of the most populous islands of the
Caribbean.
 In terms of ethnicity, about 51 percent of the Cuban
population is mulatto, 37 percent is white, 11 percent
black and one percent Chinese.
 At least 70 percent of the population lives in urban areas
and the other 30 percent is located in the rural areas of
the country.
 The official language is Spanish.
 Religions:
85%- Roman Catholic  Protestants, Jehovah's
Witnesses, Jews, and Santeria are also represented
 Demographics
Cuba India
Population: 11,451,652 (July
2009 est.) Population growth rate:
0.233%
urban population: 76% of total
population (2008)
rate of urbanization: 0% annual rate
of change (2005-10 est.)
Population: 1,156,897,766
Population growth rate: 1.407%
Urban population: 29% of total
population
Rate of urbanization: 2.4% annual rate
of change
 Climate: The climate in Cuba is similar to
that of the Eastern Caribbean islands. The
rainy season is from May to October. The
island lies in the path of hurricanes and
during the rainy season especially from
June, the island is subjected to hurricane
activity. The dry season is from November
to April.
 Demography
Age structure: Age structure:
0-14 years: 18.3% (male 0-14 years: 30.5% (male
1,077,745/female 187,197,389/female 165,285,592)
1,020,393)  15-64 years: 64.3% (male
15-64 years: 70.4% (male 384,131,994/female 359,795,835)
4,035,691/female 65 years and over: 5.2% (male
4,030,103) 28,816,115/female 31,670,841)
65 years and over: 11.2% (male
584,478/female 703,242)
(2009 est.)

Cuba’s youth dependency ratio is low

because of migration and low birth rates.
The elderly dependency ratio is high as
people live longer.
GDP  
GDP - real growth rate: 1% (2009)
GDP - real growth rate: 7.4%

4.3% (2008)
7.3% (2007 ) GDP - per capita (PPP): $3,100
GDP - per capita (PPP): $4450 GDP - composition by sector:
GDP - composition by sector: Agriculture: 17%
Agriculture: 6% Industry: 28.2%
Industry: 42.8% Services: 54.9%
Services: 51.2%
 Cuba’s income per capita in 2007 (current U.S. dollars)
amounted to $4,641.
 This qualifies Cuba as an upper-middle-income country
according to the World Bank’s classification.
 Economic growth slowed from 7.0 percent in 2007 to 4.3
percent in 2008 and was expected to dip below 4
percent in 2009. Cuba achieved strong GDP growth in
the 2005–2007 period, averaging 10.2 percent due to
major new trade agreements, investment commitments,
and credit lines from Venezuela and China provided a
significant boost to import capacity. The slowing growth
reflects the effects of the global crisis. Declines in global
nickel prices, demand for tourism, and export of health
and educational services are driving the economic
slowdown.
Cuba's Economy
 Cuba has a dual economy. The socialist peso economy applies to most
Cubans, providing them with free education, free health care, universal
employment, unemployment compensation, disability and retirement
benefits and the basis necessities of life: food, housing, utilities and
some entertainment at very low cost. The free-market dollarized
economy operates in the tourist, international and export sectors, and
substantially sustains the socialist economy.
 ECONOMIC STRUCTURE
 Cuba has a strong service sector and, like many
developing countries, exhibits low productivity in
agriculture. Nearly 20 percent of the labor force works in
the agricultural sector yet it accounted for only 3.6
percent of value added in GDP in 2006. Agricultural
value added in GDP has been on the decline in the five
years leading to 2006, with an average growth rate of
-12.7 percent. The service sector is the most productive,
accounting for 59.4 percent of all employment and
contributing 77.3 percent of GDP in 2006. The size of
the Cuban service sector is larger than those in all
comparator economies.
 Tourism

 Tourism is the major sector in the Cuban economy. This came about
after the country was forced to restructure its economy following
the collapse of the Soviet Union and the dismantling of Communism
both of which impacted negatively on the economy. Previously
dominated by sugar, the economy was opened up to foreign
investment.
 Among the investors were a number of hotel companies which
entered joint venture arrangements with the Government to
construct hotels. Today Cuba welcomes in excess of two million
visitors and tourism accounts for over 60 percent of Gross Domestic
Product. The majority of visitors to the island originate from
Canada, followed Mexico, Europe (mainly Spain), Latin America and
the Caribbean.
 Agriculture

 This sector was the mainstay of the economy for over 30 years
following the Cuban revolution of 1959. The principal agricultural
activity was sugar production as Cuba had a guaranteed market in
Eastern Europe for sugar, the main export outlet for the commodity.
However, with the loss of Eastern Europe following the political
changes which resulted in those countries attaining their
independence from the Soviet Union, the industry experienced
declines. Although production is lower, Cuba is still a major
producer of sugar, and it exports the commodity to some markets in
Europe and to China. It is involved in a deal with Venezuela where
Cuban sugar is exchanged for oil from that country. Nonetheless,
the Cuban government is looking to attract foreign investment in
the sugar industry in an attempt to lift production.
 Nickel
 Along with tourism, nickel output has boost economic growth to
around 11 percent and 12 percent respectively in 2005 and in 2006.
Venezuela and China have invested heavily in this segment of the
Cuban economy and Cuba is now the world’s fifth largest producer
of nickel and cobalt.
 Manufacturing
 This is another segment of the Cuban economy which has
contributed to the economic recovery following the difficult years of
the early 1990s. The production of food and beverage, chemicals,
cement, tobacco, clothing and textiles, and pharmaceuticals, are
some of the principal goods manufactured by the Caribbean island.
The country has also been exporting these items to markets in
Europe, Canada, Latin America and China.
 Construction
 Construction activity in Cuba continues to be robust, according to
the 2006 Economic Report as outlined by the Government. Foreign
investment in the tourism sector has meant a wave of new hotel
construction to boost the island’s hotel room stock.
 Banking
 The Central Bank of Cuba is at the apex of the banking system in the country. First established in 1948 as the National Bank
of Cuba, this institution was reorganized on at least four occasions, the last being in 1997 when it became the Central Bank.
Its President is a member of the Council of Ministers of Cuba. The financial system is made up of eight commercial banks,
an investment bank, and non-bank financial institutions. The Havana Investment Bank is registered in London. There are
no stock exchanges. The Cuban Central Bank performs traditional central banking operations issuing currencies, managing
the financial system and the economy, specifying monetary policy, and acting as lender of last resort.
Labor Skills:
 Cuba have highly qualified and educated population
as one of the resources the country can rely on
during the future transition towards a market
economy.

Labor force:
 4.3 million workers
Cuban Customs
Cuba is possibly best known around the world for 3 things: communism;
sport (boxing and baseball) and music. However, Cuba really does have
much more of a tradition-based custom than these. For example, food is
important to Cubans; arts (both still and moving) are important to Cubans
and fiesta time is important to Cubans.
Aside from those more mainstream cultural norms that you may see in Cuba,
Cuba also has a few more select customs. A traditional Cuban wedding
would be among these more select cultural norms.
Women’s role in the society:
 66.1% of Cuban professionals and intermediate-level technicians are
women .In 1953, women constituted 19.2% of the work force and now
represent 43.6% of public employees.
Meetings
 business meetings should be scheduled at least 1 week in advance.

You will be expected to be on time for business meetings, but it is a long-standing tradition for
your Cuban hosts to keep you waiting for up to 1 hour. Do not be insulted; this is just standard
practice.

 Before the meeting begins, engage in some small talk. Family is important in Cuba, and the
subject is a good conversation starter.
Dress and Appearance
 Men should wear long-sleeved shirts to meetings, but a tie and jacket are not necessary. Women may
wear dress slacks or a dress to meetings. Though the climate is hot and muggy, casual clothing is not
acceptable for business functions.
Entertaining
 Lunch is the main meal for business meetings and will last around 2 hours. Dinner is more formal and
business is not typically discussed.

 It is common practice for men to stand when a woman enters the room or leaves the table.
Drinking is a large part of the culture in Cuba, especially during business lunches. 
 Politics and law
Cuba India
Government type: communist state. Government type:
 current government assumed power by Federal republic; authoritarian prime
force on January 1, 1959.  minister rule
Independence: 15 August 1947
Independence: May 20, 1902. (from the UK)
Capital: New Delhi
Political party: Cuban Communist Party
Administrative divisions:
(PCC); only one party allowed.
Capital: Capital--Havana (pop. 2 28 states and 7 union territories
million). 
Administrative divisions:
Administrative subdivisions: 14 provinces,
including the city of Havana, and one
special municipality.
 Political System: Cuba is a Communist country. That system was
installed following the 1959 Revolution which brought Dr. Fidel
Castro Ruz to power.
 He has ruled Cuba since then, until he became ill in 2006. The
country is a one party state with the Cuban Communist Party being
the only one of significance. The country is divided into14 provinces,
including the City of Havana and one special municipality, Isle of
Youth.
 Cuba has had a tempestuous relationship with the United States.
The USA has imposed an embargo which not only prevents
Americans from trading and travelling to the island, but frowns on
countries which have been doing so. From time to time the United
States had tightened the embargo and has gone so far by
implementing what is known as the Helms Burton Act which
threatens to sanction countries doing business with Cuba.
 Cuba
The Communist Party is constitutionally
recognized as Cuba's only legal political
party. The party monopolizes all
government positions, inluding the
Council of State and judicial offices.
 Though not a formal requirement,
party membership is a de facto
prerequisite for high-level official
positions and professional advancement
in most areas.
A small number of non-party members
have been permitted by the controlling
Communist authorities to serve in the
National Assembly.
. Citizens do not have the right to
change the government.
India
India is the largest democracy in the
world. The constitution separates the
powers of the government into 3
branches: legislative, executive, and
judicial.
The initiative and responsibility for
executive leadership rests with the office
of the prime minister, not with the
president.
Neither of these offices is gained by
direct popular vote. The president is the
head of state for a 5-year term and is
elected by an electoral college composed
of members of parliament and state
legislatures.
 The president's role is so limited by the
constitution that he or she has rare
opportunities to determine national
policy.
 Terrorism
Cuba India
US-Cuba relations have been sour since Terrorism in India is primarily
the 1959 Cuban communist revolution. attributable to religious communities and
According to the State Department, Cuba Naxalite radical movement.
remains on the list because it has The regions with long term terrorist
"publicly opposed" the U.S.-led war on activities today are Jammu and Kashmir,
terror and maintains friendly Mumbai, Central India (Naxalism) and
relationships with other state sponsors of Seven Sister States .
terrorism, like Iran. Cuba in the past has
provided shelter .and hosted members of
terrorist organizations.
 Official exchange rate:
U.S. $1 = 0.93 Cuban convertible pesos. 
 Cuba has two currencies in circulation: the peso (CUP), and the
convertible peso (CUC), both of which are fixed by the government.
 Since November 2004, the U.S. dollar has not been accepted for
commercial transactions. U.S.-issued debit and credit cards also are not
accepted in Cuba. The Cuban government requires the use of
convertible Cuban pesos or non-convertible Cuban pesos for all
transactions .
 1 Cuban Peso (CUP)=44.275Indian Rupee (INR)
 Business with Cuba?
 With an economic, social, fair and
human policy, the small island of the
Caribbean sea shows a better world
is possible.
 A large Cuban trade delegation has arrived
in India looking for cooperation in cars,
pharmaceuticals, tourism and more. Of
course, armed with its famous rum and
cigars, the hard line communist state that
is gradually opening up its economy to
outsiders also has a lot on offer
 PRIORITY SECTOR OPEN TO
NEW FOREIGN INVESTMENT
 Oil and Gas
  Agriculture (Including sugar) 
 Banking and finance  Tourism
 Telecommunication
 Heavy Industry
 Mining
 Brewing and Rum 
 Tobacco
 Real estate
 Software development
 Biotechnology
 Investment funds
 While there was a period of time when Cuba
welcomed foreign business, that welcome has
cooled in the past few years - and there's much
more need for social work than there is for new
foreign business. Observers have noted that
small business is discouraged as "unneeded",
while the government still welcomes big
businesses with huge influxes of cash to invest.

  The law regarding direct foreign investment is
relatively flexible and, in theory, it allows investment
in all economical sectors. However, the government
favours and offers more advantages to investments
that can bring advanced technology, open new
markets or provide an amount of capital which Cuba
cannot bring in alone, allowing the country to have
the freewill of substituting imports.

 Government measures to
motivate or restrict FDI
 Free industrial trade zones have been established in
order to attract foreign investors (for example:
Havana in Bond, the Wajav zone or the port zone of
Mariel). They are exempt of income tax on profits as
well as labor tax, also exempt of customs duty and
any other additional duties on merchandises
introduced in the free zone. The tax exemption is
valid for 12 years. The following five years, the
company is taxed only 50%. For commercial activities
and services, the exemption period is extended for 5
years.