CubaNews / March 2009
By Larry Luxner
Carlos Saladrigas, who envisions a $300 million Cuban Enterprise Fund to jump-start small businesses in his homeland, arrived in Miami in 1961 as a 12-year-old kid — with exactly $3 in his pocket, five bottles of rum and a box of cigars.
The Pedro Pan refugee had been sent to South Florida by his parents, who didn’t want young Carlos growing up under communism.
During his first year in the United States, he saved $400 by doing mowing lawns and waxing neighbors’ cars. His parents arrived the following year, though his mother developed cancer, and Saladrigas had to quit high school in 11th grade to support his family.
His father, who had been a lawyer in Cuba, washed dishes at Miami’s Cedars of Lebanon Hospital to make ends meet.
“I was never a teenager. I went from being an only child to being a grownup and having to deal with the difficulties of life,” Saladrigas told CubaNews in a recent interview.
“At 19, I got married and very soon I had a family and started going to college at night, completing four years in three. So I didn’t have time to think about anything else.” Saladrigas eventually earned an MBA from Harvard Business School and went on to become a successful banker and entrepreneur.
But once he reached the top — he’s now chairman and CEO of Regis HR Group, which offers outsourced human resources services to small and mid-sized businesses — Saladrigas found himself spending plenty of time thinking about Cuba. More specifically, how to help the island’s 11.2 million people dig themselves out of poverty and frustration.
“The Cuba Study Group began in 2001, in the aftermath of the Elián González fiasco,” he said. “We decided to come together be-cause of this perception that the exile community had been incredibly reactive to events orchestrated by Cuba. The truth is, the exiles were being monopolized by certain groups, and those perceptions did not reflect the sentiments of the entire community.”
CubaNews talked with Saladrigas, 60, at his office along Miami’s Kendall Drive, where he’s surrounded by mementoes of a lifetime of philanthropy: a plaque from the Juvenile Diabetes Foundation, an official key to Miami-Dade County and a certificate from the Greater Miami Chamber of Commerce.
There’s also a trophy from the local Latin Builders Association honoring Saladrigas as “Entrepreneur of the Year 1997.”
And on a bookcase is a portrait of Saladrigas and his wife posing with President Obama. The photo is signed simply, “Carlos and Olga, thanks for your support, Barack.”
Although the Cuba Study Group is officially nonpartisan, there’s little doubt Saladrigas — himself once a hardline exile — now favors exactly the kind of opening Obama proposed as a candidate: a total rollback of all Bush-era restrictions on exile travel and remittances.
“I think the right policy is one that recognizes we’re incapable of changing Cuba, just as we’re incapable of changing any other nation short of military invasion,” he said.
“Therefore, making everything we do conditional on Cuba’s response in effect gives Cuba veto power. Enough of that. We need to do what is best for America.”
The Cuba Study Group consists of 18 to 20 members, each paying a “substantial fee” to belong. Saladrigas wouldn’t discuss how much it costs to be a member, though he did say “we don’t take any government money and we never want to.”
Membership fees are used to pay a full-time staffer in Washington, Tomás Bilbao, and to conduct polls that measure public sentiment in the exile community on important issues like immigration, travel to Cuba and whether or not the embargo should remain in place.
“We are not an academic institution. Our task is thinking about new ideas and how we can help Cuba achieve its goals,” he said. “We want to see a free and democratic Cuba. In that sense, our objectives are the same as anybody else’s. But we don’t go out every day and react to things that happen. We give a lot of thought and discussion to events. Once we agree an issue is important, we take action.”
As a Section 501(c)(3) nonprofit organization, the Cuba Study Group cannot lobby Congress, but it can certainly advocate ideas — and not everybody agrees with those ideas.
“There’s still a very vocal minority of Cubans who tend to be exclusionary and intolerant. They cannot accept any other point of view, and if you don’t agree, they brand you as a communist, a Castro-lover — except that it doesn’t matter that much anymore.”
In 2002, hardline Cuban exiles in Miami called for a march to protest pollster Sergio Bendixen’s surveys showing that their influence was waning amidst the changing demographic in Miami-Dade County.
“The next day, they held the march and said well over 200,000 people took to the streets,” Saladrigas recalled. “So we hired an aerial photographer to take pictures of the protesters. The pictures showed just over 5,000 people. These groups were using the same tactics that Castro used to promote his political beliefs. We decided enough with this crap, let the truth be known.”
Last December, the Cuba Study Group issued a 24-page report urging the U.S. government to unilaterally lift all restrictions that limit the ability of American citizens to travel to Cuba and spend money there.
But even if Obama keeps his promise and lets exiles visit Cuba and send remittances freely, that’s only the beginning.
“Cuba’s biggest problem, when it begins to reform its economy, will be access to capital. You can’t depend exclusively on foreign investment, so you’ve got to create a domestic source of capital,” Saladrigas explained.
“Therefore, we believe that making private equity available to Cuban enterprises will be incredibly important in bringing in capital early in the game. Microenterprise can allow people to create capital by risk-taking and the fruit of their labor, which will quickly grow.”
To that end, the Cuba Study Group has called for the creation of a $300 million Cuban Enterprise Fund that would be financed by the U.S. government, the European Union and private companies hoping to encourage capital growth. The idea is that each of these three sources would kick in $100 million, following a similar initiative set up in 1989, when
President George H.W. Bush signed into law the Support for Eastern European Democracy Act. SEED helped create a viable private sector in Hungary, Poland and elsewhere.
Along with the Cuban Enterprise Fund, CSG wants to set up a microlending program with an initial start-up kitty of $10 million.
“Unlike recipients of microloans in the rest of the world, Cubans are highly educated people,” Saladrigas told us. “That’s the single most important strategic asset of the Cuban people — their level of education. Yet Cuba today has the lowest return on its educational investment of any country in the world. Through microenterprise, we think we can turn that around very quickly.
“All it takes is for the Cuban government to give us the green light. When that happens, I think we can put the plan into motion,” he said. “We must put egos aside, and we need to do this on both sides of the Florida Straits. To paraphrase Kennedy, we need to ask what can we do for Cuba, not what can Cuba do for us.”
Saladrigas said the Microlending Fund is a private effort to raise money to provide micro-loans in Cuba — from $500 to $2,500 each.
“The fund doesn’t exist yet. We have an operating partner, Banco Compartamos SA in Mexico, which is the largest microlending institution in Latin America,” he said. Yet the fund isn’t legal in either Cuba or the United States, where it would clearly violate the terms of Washington’s trade embargo.
“We are asking the Cuban government to allow small-enterprise formation and to allow microlending. Eventually, they’re going to have to say yes, because the current system is not sustainable. Cuba’s economic system is an absolute and total failure and they know it.”
He says “it cannot be fixed, no matter how much Raúl Castro talks about fixing it. Therefore, we must offer some kind of alternative.”
Saladrigas said he’s tried to go to Cuba on several occasions, “but they don’t want me there. Cuban officials consider me part of the exilio blando [soft exile], which they say is much more dangerous than the exilio duro [hardline exile] because it’s easier to refute a fanatic than one who is open to dialogue.”
Meanwhile, the refugee who once mowed neighbors’ lawns for a living isn’t giving up.
“Transitions are like a jigsaw puzzle; it does not really matter where you start. The important thing is to make sure all the pieces are on the table,” Saladrigas told CubaNews. “And with the Microlending Fund, we’re putting one such piece on the table.”