IT in Cuba

Telecommunication Infrastructure

Liberalization and Deregulation

Internet Diffusion

Electronic Commerce

Hardware Manufacturing

Software Manufacturing

Who Uses IT?

IT Labor Market

IT Geographics

IT Financing

Government Policies

Legal Environment

Transborder Data Flows

Analysis: IT Strengths and Weaknesses

Analysis: Impacts on the Business

Sources and Links

About the Authors

Information Technology in Cuba

Electronic Commerce

Introduction

Cuba faces a dilemma with its beginning e-commerce infrastructure. Self-employment is strictly regulated by the Cuban government to limit competition with state enterprises. For example, self-employed individuals cannot hire employees unless they are in food service (53). Companies such as the Pure Cuba Play Corporation are attempting to attract technology and e-commerce ventures to the island. However, foreign investment is welcomed only in select business sectors, not including retail sales or e-commerce. The Cuban Ministry of Foreign Investment and Economic Cooperation (MINVEC) dictates which economic sectors are approved for investment (54). By restricting foreign investment, Cuba is missing out on the rapidly-expanding e-commerce market. Latin American e-commerce revenues have been growing rapidly and are predicted to reach $580 million in 2000, compared with $109 million in 1999 (55). A governmental e-commerce commission is attempting to clear regulatory hurdles to domestic B2B transactions and exports. However, its efficacy remains to be seen.

History of E-Commerce

Cuban e-commerce started with Cubaweb.cu, a tourism website attracting foreign visitors and investment partners to Cuba. In June 1996, Cubaweb's creator signed a joint venture deal with Teledatos GET, the electronics arm of the Cuban tourism industry, to create Cubaweb as a legal entity within Cuba. Cubaweb expanded to Cuba's first e-commerce site by selling Cuban music CDs. Payments were routed through a Canadian service, InternetSecure, to avoid American embargo restrictions. Cubaweb's revenues have grown to approximately $750,000 per year. However, few Cuban entrepreneurs have followed Cubaweb's lead. Only two portals, Islagrande.cu and Cubanacan.cu have been created. Cubanacan.cu allows people outside Cuba to buy gifts for relatives living in Cuba. A Cubaweb protégé created a B2B system that streamlines orders from tourism operators.

International Assistance in Cuban E-Commerce Development

The United Nations' Sustainable Development Networking Programme (SDNP) has been working to reduce the disparity between high-wealth nations, primarily the United States, and developing countries. According to UN estimates, the United States has a substantial lead in deploying and using e-commerce solutions for B2B and B2C ventures. Europe lags behind 2-3 years while developing countries maintain at least a 5 year lag. The SDNP works with participating nations to launch and support local Internet sites and build national capacities and knowledge resources. In the Caribbean basin, the Dominican Republic and Haiti projects are already received infrastructure upgrades of Hewlett Packard equipment under an HP/SDNP agreement. However, Cuba and Trinidad and Tobago are in the preliminary negotiations phase.

 

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