Doing Business : Cuba Is No Longer a Dirty Word in Jamaica : * Some of the island’s most conservative businessmen are rushing to make deals with the Communist state. They’re trying to get in on the ground floor for the post-Castro era.

Cuba was an unspeakable four-letter word among Jamaica’s leading business people and ruling politicians during the late 1980s.

But in an astonishing turnabout, some of this island nation’s most conservative business people are now making deals with Communist Cuba--and anxiously looking to reserve space on the ground floor when Fidel Castro ultimately steps down or falls.

Ironically, the race to do business with the onetime pariah of the Caribbean was not inspired by Prime Minister Michael Manley, a socialist who was once Castro’s closest Third World friend, but by former Prime Minister Edward Seaga, the arch-conservative who, under the tutelage of then-U.S. President Ronald Reagan, broke relations with Cuba in 1981.

“Cuba is an entirely different situation today--it has ceased its (political) adventures in the Caribbean,” Seaga explained in an interview, adding that he voiced no objections when Manley quietly resumed diplomatic relations with Havana last year. “Cuba is no longer the bad boy of the Caribbean,” he said.

Although no friend of Castro, Seaga said he is a pragmatic man who can see that Cuba after Castro may regain the economic dominance it held over the Caribbean in the 1950s.

“Somewhere in this decade the Cuban bombshell will explode” with business activity, the former prime minister wrote in a local news commentary that inspired several Jamaican financiers to fly to Havana on business scouting missions.

He warned that unless Jamaica and other Caribbean nations are alert, they may be left behind as investors and tourists abandon old island haunts for new opportunities in Cuba.

“A free Cuba will immediately divert investment flows from other Caribbean countries on the strength of its own attributes, which are many . . . (including) the historically strong (pre-1960s) connection of U.S. investment to Cuba,” Seaga said.

Among other investment attractions that a free Cuba would have over the rest of the Caribbean, he said, are a disciplined, skilled, literate and low-paid work force, rich farmland capable of expanding production of sugar, citrus, coffee, tobacco, rum and other products and extraordinary potential for tourist resort development.

“More important, there are investors only a few hundred miles away in Miami who need no convincing--the Cuban community, from whom substantial investment would flow immediately,” Seaga said.

Although a number of Jamaican businesses, including private banks and insurance companies, have opened negotiations with various elements of the Cuban government this year, only one firm deal has been reached. But, for competitive reasons, the hotel magnate who pulled it off will not disclose the financial details.

John J. Issa, a major Seaga political supporter who operates five SuperClub resorts in Jamaica and one in the former British colony of St. Lucia, said only that his deal with Cuba involves two new SuperClubs at Varadero Beach, once the most elegant of Cuban resort areas. He said his group already is running the 160-suite Hotel Villa Los Cactus there and has 120 more suites under construction. Issa will break ground soon on the second Varadero SuperClub, to be called Cuba Cuba, which he expects to open next year.

He conceded that even under newly liberalized Cuban investment rules permitting majority foreign ownership in some tourist establishments, profits may be slow in coming as long as American tourists are forbidden to spend money in Cuba.

Although there is no law against Americans going to Cuba, U.S. Treasury Department regulations prohibit even the most mundane financial transactions to all but a select few, such as journalists and scholars. While a trickle of daring American tourists have flouted the ban and flown to Havana from countries such as Canada and Mexico, it has remained effectively off-limits.

“The change could be three years from now or five years from now or a few months, no one knows,” said Issa. But he added that getting his foot in the door is worth the wait, considering that the door may not be open long once Cuba does open up.

“Assuming we weren’t already in there and it opened up tomorrow, do you think a Jamaican would have a chance against the Cuban-Americans?” he asked.

“There’s a lot of potential business in Cuba,” said Dr. Paul Chen Young, one of Jamaica’s leading merchant bankers who recently chartered a plane to take 20 fellow business people to Havana. “We didn’t go to negotiate, just to get the feel of things,” he said, adding that most of his companions sensed opportunities, particularly in support elements of the tourism sector such as car rental and resort financing.

But he said the talk was strictly business. “When I met with Cuban officials, there was no political discussion whatever. They were intent on identifying business opportunities,” Chen Young said. “I was impressed by the business attitude of the officials.”

Issa also credited Cuban officials with capitalist savvy. “The people we are dealing with are just like the people you deal with in a large Western corporation,” he said.

Dennis Lalor, chairman of the banking-insurance conglomerate ICWI Group Ltd. and one of Jamaica’s wealthiest men, also has been feeling the pulse in Havana, sending a special emissary on several get-acquainted missions. “It seemed not unnatural that we should start looking to Cuba as a business opportunity,” Lalor said. “In other words, to try to get in there first.”

But he cautioned that “it’s going to be a long process” because of the difficulty of arranging investment financing in what remains a rigidly controlled Communist country.

“Another thing you can’t discount,” Lalor said, “is that two generations have grown up under that very socialist regime, and a free market is not something that will come easy to them.”

But as Issa’s experience demonstrates, tourism already is beginning to flower, with investors and hotel management organizations moving in from European countries such as Spain, Germany and Switzerland as well.

According to Jamaican Minister of Tourism Frank Pringle, a growing number of European charter operators have started booking Cuba as a joint destination along with other Caribbean resort areas such as the Bahamas and Jamaica.

“Already (the Cuban airline) Cubana is running a couple of flights a week out of Montego Bay, Jamaica, to Santiago de Cuba, about 40 minutes flying time,” he said. Of the many travelers who use the Cubana flights for short day-trips to the historic old city in southeastern Cuba, Pringle said, “the majority are Americans.”

The day-trippers may not know it, but if they spend a single dollar in Santiago, they are liable under U.S. law to penalties ranging up to 12 years in prison and $250,000 in fines. So far none have been prosecuted.

But if an American tourist seeks to be more ambitious and book into one of Issa’s hotels on Varadero Beach, he may have to wait a while.

“If an American asked for a booking, I would turn him down,” Issa said. “It doesn’t suit me to jeopardize my entire business with the U.S. market in the rest of the Caribbean.”

Trying to Make a Caribbean Connection

Jamaican business people are making deals with Cuba, eager to have a foot in the door when President Fidel Castro ultimately leaves power. The force behind the drive was inspired by Jamaica’s former prime minister, Edward Seaga. A post-Communist Cuba, Seaga says, will attract investors because of a skilled workforce, rich farmland and potential for tourism.

CUBA * Population: 10.6 million * Gross National Product: $20.9 billion, per capita $2,000 * Industries: Sugar milling, petroleum refining, food and tobacco processing, textiles, chemicals, paper and wood products, metals (particularly nickel), cement, fertilizers, consumer goods, agricultural machinery. * Agriculture: Accounts for about 11% of GNP (including fishing and forestry). Key crops are sugar cane, tobacco and citrus fruits. Also, coffee, rice, potatoes, meat, beans. Cuba is the world’s largest sugar exporter.

JAMAICA * Population: 2.4 million * Gross National Product: $3.8 billion, per capita $1,529 * Industries: Tourism, bauxite mining, textiles, food processing, light manufacturing. * Agriculture: Accounts for about 9% of GNP, a third of the work force and 17% of exports. Key crops are sugar cane, bananas, coffee, citrus, potatoes and other vegetables. Livestock and livestock products include poultry, goats, milk.

Source: World Factbook, 1990