Speaker 1: Cuba right now is an island in transition. Entrepreneurs can
Speaker 1: now run private businesses, Tourism is taking off, and people
Speaker 1: across the country are gradually getting access to the internet.
Speaker 1: In November, my husband and I went there for eight
Speaker 1: days on vacation while everyone else in the US was
Speaker 1: enjoying Thanksgiving. And you took some recording equipment with you
Speaker 1: just in case you found an interesting story. Even though
Speaker 1: I try to encourage you to just enjoy your time off,
Speaker 1: you did. You did. It's true. But it was on
Speaker 1: my very first day there that I found my story. Omero,
Speaker 1: my taxi driver was driving us around Havana in this
Speaker 1: beautiful pink convertible Cadillac. Okay, tell me. We passed by
Speaker 1: all these parks and public squares that were teeming with people,
Speaker 1: but they weren't really hanging out and socializing with each other.
Speaker 1: They were wheezed onto public benches as if they were
Speaker 1: on the subway, like hunched over their smartphones. Is many
Speaker 1: people for gheefly phase will It turns out those crowds
Speaker 1: were enjoying a fairly new luxury in Cuba three or
Speaker 1: four year before it's impossible for internet for the people
Speaker 1: but is figure out before. It's a many change, and
Speaker 1: that change that Omero is referring to, that's when the
Speaker 1: state owned telecom company at Texas began rolling out the
Speaker 1: country's very first WiFi hotspots. That's when the Internet first
Speaker 1: became available to the massive It's possible. The Internet is
Speaker 1: not limited. The bird is the corn is no good connection,
Speaker 1: his bird is low. But it's possible. It's through this
Speaker 1: very patchy network access from the crowded benches of Havana's
Speaker 1: parks that the Internet is just starting to change the
Speaker 1: way Cubans live and work, decades after it's transformed our
Speaker 1: lives lives in the developed world. Hi am Akito, and
Speaker 1: I'm Pat Cary, and this week on Decrypted, we're going
Speaker 1: to be asking you to imagine a time before we
Speaker 1: hailed Uber's, before we asked Sirie for directions, before we
Speaker 1: got to watch our favorite movies with just a couple
Speaker 1: of taps or clicks. As I traveled around, I asked
Speaker 1: people to tell me their stories. I really wanted to
Speaker 1: understand what the internet could do for young people and
Speaker 1: especially for people trying to set up their own businesses Cuba.
Speaker 1: Maybe just a short flight from the US, but it's
Speaker 1: actually really unlike anywhere I had been before. Okay, so
Speaker 1: I've heard that it's an idyllic island, vegetation long, pristine beaches.
Speaker 1: I've always wanted to visit. Yeah, Havana is like full
Speaker 1: of gritty charm. Um. It was a wonderful place to be.
Speaker 1: But actually, the thing that really struck me as soon
Speaker 1: as I arrived is how different the economy is from
Speaker 1: what I'm used to in the US. A couple of examples, Um,
Speaker 1: government wages are really incredibly low, just twenty five dollars
Speaker 1: a month, and that's in the cities. In the countryside,
Speaker 1: it's only fourteen dollars a month. Another thing I noticed
Speaker 1: is that access to information is controlled in interesting ways,
Speaker 1: so it's not often as easy as you would think
Speaker 1: to access news, for example, about the rest of the world.
Speaker 1: And before I arrived, I had heard about how there's
Speaker 1: a shortage of cars in Cuba, but I just didn't
Speaker 1: understand until I got there, really how limited access to
Speaker 1: a vehicle is is. In fact, in the countryside, most
Speaker 1: people move around by horse and cart because there's so
Speaker 1: few cars. Sophia, you getting driven around in that pink
Speaker 1: Cadillac by your very own driver, Romerrow. That's a pretty
Speaker 1: big luxury. Yeah, that's a treat. And it's not like
Speaker 1: cars are technically banned in Cuba. It's just that they
Speaker 1: are so expensive to buy that most people can't afford them.
Speaker 1: One taxi driver told me those classic cars that you
Speaker 1: see in all the photos driving down the Malican, they
Speaker 1: can cost as much as fifty thousand U S. Dollars.
Speaker 1: And remember, most people are just earning twenty dollars a month.
Speaker 1: And he said that if you do manage to somehow
Speaker 1: save enough cash to buy one of these cars, then
Speaker 1: the authorities can often get suspicious about how you manage
Speaker 1: to get so much money. And there's no such thing
Speaker 1: as getting a loan for a car if you want
Speaker 1: to buy one. In the airport in Mexico on our
Speaker 1: way to Cuba, we saw people checking in flat screen TVs,
Speaker 1: air conditioning units, and are the large home electronics. Big
Speaker 1: ticket items are still prohibitively expensive for most people in Cuba.
Speaker 1: So what about smartphones? Actually, interestingly a lot of young
Speaker 1: people do have smartphones, but again they are still really expensive.
Speaker 1: A few people told me the latest models aren't easily
Speaker 1: available unless you buy them on the black market. This
Speaker 1: is something I asked Omero, our taxi driver about. Now. Remember,
Speaker 1: by Cuban standards, Omero is very well off. He owns
Speaker 1: five classic cars in a place where most people don't
Speaker 1: even have one. But still he had to depend on
Speaker 1: his relatives in Miami to send him a smartphone from
Speaker 1: the US. No, I my phone is and buy in Miami. Okay,
Speaker 1: every ELECTRONI is a spencer in Cuba. It's very spencive.
Speaker 1: He's positive because my family living in Miami, Like, I'm
Speaker 1: gonna buy the phone and the TV for me. You know.
Speaker 1: The people is not possibly um Miami, because I know Miami.
Speaker 1: No resize there. They gone to Marino how the morning
Speaker 1: for goo. The made the flight and like a lot
Speaker 1: of other developing economies, I assume a desktop computer is
Speaker 1: completely out of the question. Yeah. I didn't see a
Speaker 1: single one while I was there. And actually until now,
Speaker 1: Cubans have not been able to access the Internet from
Speaker 1: their homes. Interestingly, that may be about to change. I
Speaker 1: spoke to one Cuba trade expert. His name is Timothy Ashby.
Speaker 1: I'm the former senior Republican political appointee in the Commerce Department.
Speaker 1: Myself and two administrations. Timothy told me there are pilot
Speaker 1: programs underway in Havana to bring internet connections to at
Speaker 1: least one neighborhood. The Cubans have just started experimenting with
Speaker 1: home internet access UM in Old Havada, which is the
Speaker 1: recently restored area of the five d year old General
Speaker 1: and they have a pilot puggle with two thousand homes
Speaker 1: that have been set up for home internet access, which
Speaker 1: is a quite revolutionary in Cuba, which because home internet
Speaker 1: access was prohibited until quite repas unless you were a
Speaker 1: government official or a teacher or a foreuner. So that's
Speaker 1: that's quadramatic. Can they do plan to Experiand he also
Speaker 1: said there's a lot of interest inside the Cuban government
Speaker 1: in developing the country's infrastructure in the coming years, and
Speaker 1: a couple of American companies are definitely interested in helping
Speaker 1: build out that infrastructure. Google is one of them, and
Speaker 1: in December they reached a deal with Cuba. They're going
Speaker 1: to set up service locally on the island to store
Speaker 1: content like popular YouTube videos for example. At the start
Speaker 1: of the show, we heard Omero talking about those frustratingly
Speaker 1: slow internet connections. Well, this deal with Google should speed
Speaker 1: things up. And you found the Airbnb is also growing
Speaker 1: in Cuba, and wireless carriers like Verizon in eighteen he
Speaker 1: are now offering roaming services for tourists visiting the island,
Speaker 1: and I'm told that US carriers are looking for ways
Speaker 1: to offer services not just to tourists but also to
Speaker 1: local Cubans. Netflix is another US company that's technically available
Speaker 1: in Cuba, but they won't really see the benefits of
Speaker 1: being there until the Internet becomes more accessible to more people.
Speaker 1: And this is this is an interesting thing thinking about
Speaker 1: why US companies are even bothering to come here. Because
Speaker 1: Cuba is a tiny economy, the revenue that they generate
Speaker 1: can't really compare to the opportunity in other markets like
Speaker 1: China or Greater Africa. Yeah. I wondered about this too,
Speaker 1: and I suspect part of it must be related to
Speaker 1: the fact that they are finally able to do business
Speaker 1: in this place that's been off limits for literally decades.
Speaker 1: But I discovered something else to Cuba actually trains a
Speaker 1: lot of world class computer scientists and programmers. That's because
Speaker 1: they have a few very respect table technical universities and
Speaker 1: it's kind of a surprising detail. I think for a
Speaker 1: lot of our listeners, because so far we've been talking
Speaker 1: about Cuba, is this incredibly poor economy. Right, most people
Speaker 1: have very little disposable income. But the government has invested
Speaker 1: in good schools, good hospitals, and good universities. Sure, so
Speaker 1: they have all the raw ingredients for for good talent.
Speaker 1: But these people, they come out of these great educations
Speaker 1: and they have nowhere to apply those skills. Right, And
Speaker 1: when I spoke to Timothy, he said that for American
Speaker 1: companies it may not be so much the market opportunity
Speaker 1: as the engineering talent that they're chasing in Cuba. The
Speaker 1: Cuban government is on board with this too. Their goal
Speaker 1: is not to be another India, but to be something
Speaker 1: closer to Israel, where they have highly trained innovative um
Speaker 1: software developers and other types of entrepreneurs. And the entrepreneurial
Speaker 1: sector has actually been encouraged in Cuba. Yeah, Okay, so
Speaker 1: that's all on the pipeline. And yet right now most
Speaker 1: people still need to sit on a park bench to
Speaker 1: check their email. So let's walk everyone through it. How
Speaker 1: do people actually connect to the internet. So first you
Speaker 1: have to buy a scratch card to connect to the
Speaker 1: national WiFi network. You can buy the cards at state
Speaker 1: run general stores and in major hotels, so like phone
Speaker 1: cards way back in the day. Yeah, no, exactly. And
Speaker 1: the going rate for an hour online is about two
Speaker 1: U S dollars. Now that's incredible. You know, earlier we
Speaker 1: talked about people's salaries being twenty five dollars a month,
Speaker 1: So an entire month's wages is equivalent to about ten
Speaker 1: to twelve hours of time on the internet. Yeah, Cuba's
Speaker 1: internet is one of the most expensive in the world.
Speaker 1: I talked to a woman called Laurie. She works as
Speaker 1: a guide in a national park in a town called Vignalis.
Speaker 1: It's about three hours away from Havana. Here's how she
Speaker 1: explained it. But it's not easy. It's sometimes we don't
Speaker 1: have a connection and is just in the one blope
Speaker 1: of the town and in some hotels we have only
Speaker 1: to hold us. The early have senior too, but not
Speaker 1: in all Vignal. It's not in the house. It's impossible
Speaker 1: in the house, and even if we want the internet
Speaker 1: in the house is really expensive and they don't want
Speaker 1: people with internet because we use internet. We have acted
Speaker 1: at all the information and they don't want that now.
Speaker 1: When she says they, Laurie is of course talking about
Speaker 1: the Cuban government. But it was almost as if Cuba's
Speaker 1: method of information control was to make it so expensive
Speaker 1: and so slow and in convenient to use the Internet.
Speaker 1: I checked it out while I was there, and interestingly,
Speaker 1: you can access Western websites like Facebook and Twitter. They're
Speaker 1: not censored, so very different from a place like China.
Speaker 1: Exactly here's him again. Cubans also communicate now um by
Speaker 1: linked In. They are active Facebook subscribers. They also access
Speaker 1: international news, and this is something that's very intriguing to
Speaker 1: that they are not censored, that the government will close
Speaker 1: down violently antique Castro government types of science. But I've
Speaker 1: actually tested, as you may well have too, such just
Speaker 1: like Google, see you and I can access news from
Speaker 1: anywhere in the world. That seems there's no independent media
Speaker 1: in Cuba, but there is an ability to access um
Speaker 1: foreign media, which I think is a very key differentiation.
Speaker 1: Did you get this sense of what people use the
Speaker 1: internet for? Yeah, Well, since it's so new, people are
Speaker 1: just getting used to it. They use mostly basic applications,
Speaker 1: things like sending emails and video calling their relatives. Who
Speaker 1: live outside Cuba. Another thing people mentioned was social networks
Speaker 1: Google Facebook. Interestingly, I didn't hear anyone really talk about
Speaker 1: e commerce, so that there's no Amazon there, no no
Speaker 1: one recognized the name Amazon when I tried it out.
Speaker 1: The only person who said they occasionally buy things online
Speaker 1: was Omero, the taxi driver we mentioned before. He said
Speaker 1: he uses eBay to get spare parts for his car. Okay, so,
Speaker 1: just until a few years ago, it was really hard
Speaker 1: for normal people to start a business. You either had
Speaker 1: a government job, you served in the military, or you
Speaker 1: worked the land as a farmer. There were some limited
Speaker 1: opportunities to run your own business. You could maybe be
Speaker 1: a hairdresser or rent a room to tourists, for example,
Speaker 1: But before Raoul Castro changed the rules, you couldn't have
Speaker 1: any employees unless they were related to you. And it's
Speaker 1: really striking in Cuba how little industry there is. Towns
Speaker 1: have no shops, literally no shops, and almost everything is
Speaker 1: still run by the government, even restaurants and cinemas. But
Speaker 1: it has recently become possible for Cubans to set up
Speaker 1: small businesses, which usually have something to do with serving tourists.
Speaker 1: So if you have a car. You might become a
Speaker 1: taxi driver like a marrow, or you might make small
Speaker 1: craft objects like painted pictures or jewelry out of everyday materials.
Speaker 1: Here's Laurie again. You can compare our business now then
Speaker 1: um some years ago, and now we have more opportunities
Speaker 1: and we have more money. And it's incribll because all
Speaker 1: the people are common before of the American people. So
Speaker 1: when they came, the hotel is full and they have
Speaker 1: to go at the houses with trendrom or sometimes they
Speaker 1: don't like the hotel because it is um a little
Speaker 1: bit um different in the house. They want came to
Speaker 1: know the real people. They want to came to see
Speaker 1: our life and to know about our culture. So so
Speaker 1: it's Laurie said. Most towns just have one or two
Speaker 1: government hotels, and as a result, there's a real shortage
Speaker 1: of hotel rooms. Luckily, renting rooms to tourists is by
Speaker 1: far the most lucrative kind of business people could run
Speaker 1: in Cuba, but until now hosts have had to rely
Speaker 1: on word of mouth to attract guests. They depend on
Speaker 1: host families in other towns recommending them on to travelers,
Speaker 1: or they hang signs in front of their doors. So
Speaker 1: this is one area where the Internet is totally transforming
Speaker 1: the way people do business. You know, it's really hard
Speaker 1: to imagine how businesses could manage without being able to
Speaker 1: do simple things like sending up a website. Yeah, I
Speaker 1: was very curious about this too, and some of the
Speaker 1: most interesting stories I heard came from the families that
Speaker 1: we stayed with that She and her husband, Yovanni, have
Speaker 1: a home in the north of Cuba. Their cottage sits
Speaker 1: on a sandy spit of land poking out into the
Speaker 1: Gulf of Mexico, surrounded by warm turquoise water and narrow
Speaker 1: white beaches, and their home is idyllic. They have a
Speaker 1: small garden in the shade of an avocado tree. They
Speaker 1: grow fruit and salad. The chickens out back, and about
Speaker 1: eighteen months ago they started renting three extra rooms. They
Speaker 1: set up a website, and then about a month ago
Speaker 1: they signed up with Airbnb. With Airbnb, it's only been
Speaker 1: twenty days more or less of them, it's going very well.
Speaker 1: They send us a lot of bookings. Basically, I'm booked
Speaker 1: for the whole year with them. It's not just Island.
Speaker 1: Everywhere we stayed our host families told us, Airbnb has
Speaker 1: had a big impact on their business. Your friend recommended
Speaker 1: Airbnb to me and I searched for it on the
Speaker 1: internet and it looked good for growing my business. We
Speaker 1: got our first client through them under member nine that
Speaker 1: was great who hosted us in a little sky blue
Speaker 1: cavania in Vignalis. Now, before Airbnb, you would never know
Speaker 1: when a guest would come looking for a place to
Speaker 1: stay before your friends and neighbors would give you a call,
Speaker 1: ask if you were free or if you had guests
Speaker 1: right now, and then sometimes people would say they're coming
Speaker 1: and then not show up. On those days, hosts would
Speaker 1: simply lose the income. And Ailem told me that knowing
Speaker 1: her security deposit is guaranteed is one of the best
Speaker 1: things about signing up with Airbnb. Well before, it was
Speaker 1: a bit difficult. My house was not very well known.
Speaker 1: A lot of clients would reserve, but without the security
Speaker 1: that they're definitely coming and if they don't show up,
Speaker 1: sometimes I would send away other guests and not get
Speaker 1: the money from any of them. So I started only
Speaker 1: to accept day of booking. Another big bonus with Airbnb
Speaker 1: is that posts can take bookings far in advance on
Speaker 1: the night we stayed with Alem, we saw her actually
Speaker 1: take a reservation as far out as April, as she
Speaker 1: says that never used to happen before. Okay, so I
Speaker 1: lem not having easy access to the internet. How is
Speaker 1: she maintaining her Airbnb account? Yeah, you're right. She doesn't
Speaker 1: have any internet signal at her house and she lives
Speaker 1: an hour away from the closest WiFi hotspot, which is
Speaker 1: in the town, so she can't manage her own Airbnb accounts.
Speaker 1: Someone actually called her that night to update her about
Speaker 1: the booking, and what she told me is that usually
Speaker 1: Airbnb will keep in touch with her by email, so
Speaker 1: a couple of times a week or whenever she goes
Speaker 1: into the town, she can get online and pick up
Speaker 1: any updates that they've sent her. Here in Cuba, we
Speaker 1: are not free to connect to the internet from home
Speaker 1: as well. It's very difficult. I have an email account
Speaker 1: and that's how I keep in touch with Airbnb. This
Speaker 1: is the way I connect with Airbnb. They connect with
Speaker 1: every one this way and they do everything. They upload
Speaker 1: the photos of the house. When I have new photos,
Speaker 1: I send them to a representative who is based in
Speaker 1: Havana and he has to communicate with the guests because
Speaker 1: I don't have access to the internet. That representative I
Speaker 1: LM is talking about. Those are people working for Airbnb
Speaker 1: and Havana. It's their job to basically manage the hosts
Speaker 1: accounts for them. Yeah, and I didn't really get it
Speaker 1: at the time, but now that I'm thinking back, when
Speaker 1: I was looking for places to stay in Cuba, almost
Speaker 1: every listing offered instant booking. And you know, maybe that's
Speaker 1: the reason that because it's just too hard for hosts
Speaker 1: to get back to you quickly if you try and
Speaker 1: message them and asking questions before you make a reservation.
Speaker 1: So what do you think we can expect from Cuba
Speaker 1: in the next few years. I think everyone is waiting
Speaker 1: to see US companies, I mean international companies in general
Speaker 1: are all eager to get into the country. But so far,
Speaker 1: the pace of dealmaking, at least between US companies and
Speaker 1: the Cuban government has been relatively slow. Um and there's
Speaker 1: a number of pending deals that haven't closed yet. One
Speaker 1: thing that we can count on is that the Cuban
Speaker 1: government is interested in expanding internet access within the country,
Speaker 1: so likely the first thing we'll see is more WiFi
Speaker 1: hotspots and hopefully something cheaper to something cheaper than two
Speaker 1: dollars an hour. Yeah, well, I mean, O'Mara told me
Speaker 1: that it used to be ten a couple of years ago,
Speaker 1: ten dollars an hour, So it may come down further,
Speaker 1: and it'll be interesting to see what happens to the
Speaker 1: relationship that the US has with Cuba under our new
Speaker 1: president Donald Trump. I agree, I think that's a big
Speaker 1: question mark right now. But I was interested while I
Speaker 1: was reporting out this story to hear that a lot
Speaker 1: of people are actually very hopeful the Cuban government um
Speaker 1: is not expecting any kind of rollback what I've heard,
Speaker 1: especially from Timothy, who is still very plugged in with
Speaker 1: policy officials in Washington. He said that there may be
Speaker 1: more scrutiny of deals, there may be more enforcement of
Speaker 1: existing regulations on the U S side, but he's not
Speaker 1: expecting to see a rollback. We'll just have to wait
Speaker 1: and see. And that's it for this week's episode of Decrypted.
Speaker 1: Thanks for listening. Tell us what you thought of this episode.
Speaker 1: Send us a voice message. You can email me at
Speaker 1: p G A D K A r I at Bloomberg
Speaker 1: dot net, or write to me on Twitter. I'm at
Speaker 1: Pa Gadkari and I'm at aki Ito seven. You can
Speaker 1: subscribe to Decrypted on iTunes or wherever you get your podcasts,
Speaker 1: and leave us a rating and a review. It helps
Speaker 1: more listeners find your show. This episode was produced by
Speaker 1: aki Ito, Magnus Henrickson, and Liz Smith. Alec McCabe is
Speaker 1: head of Bloomberg Podcasts. We'll see you next week as
Speaker 1: Radio Rubber Last. L