Economic freedom, declared Barack Obama – the first American president to speak on Cuban soil for 88 years – is the key to prosperity.
The potential for overseas investment – with the country’s market opening up after half a century of restriction – is huge, and Intesa Sanpaolo is determined that Italy, like America, should play its part.
“We were pioneers, beginning our work in Cuba in 2013 with the first signs of the lightening of the embargo”, says Stefano Stangoni, the bank’s global head of financial institutions. “Since then we have been laying the foundations to support Italian companies there now the time is right”.
For the Italian economy and for a leading bank with a far-reaching strategy of internationalisation, these are exciting times.
The need to be in the right place at the right time is more pressing than ever, says Stangoni. “There are areas of the world where there is growth but the pattern is one of leopard spots. So it is fundamental to be present in the precise countries, such as Cuba, which offer opportunity”.
The lifting of restrictions on trade will create heavy demand for key products and services. Among them Stangoni highlights infrastructure, energy, engineering, technology, machinery, automotive and pharmaceuticals. All, he believes, sectors in which Italy – and many of Intesa Sanpaolo’s major clients –enjoy an excellent reputation.
“Cuba is a country which has in effect stood still for 50 years. So much has changed in that time. Filling that gap will require a huge amount of investment and work – roads, ports, energy plants, dams and more will all need to be built”.
It is a golden opportunity, he believes, for Italian investors and companies keen to market their products and expertise.
"The Made in Italy brand has powerful potential in Cuba. We are very good at being experts”. Early groundwork has already fostered real “appreciation of and affection for Italian goods and construction capacities."
Photo: Stefano Stangoni, Intesa Sanpaolo’s global head of financial institution.
When the trade relaxation began, three years ago – on necessities such as food, medicines and certain machinery – Intesa Sanpaolo was an early and committed player.
“Through our ability to read this situation, to be open minded, financing boats carrying imports for Cuba and through early visits – always within the parameters of the regulations – we seized a big opportunity,” says Stangoni. “We went in as entrepreneurs, sharing the opportunities and the risks and looking for chances to cross-sell and develop links”.
The resulting relationships – with Cuban institutions and businesses, and with the most suitable Italian exporters – will be crucial in building reliable, ethical and profitable trade for the future, explains Stangoni.
“You need vision and interpretation skills, but you also actually need to be there, checking things on site, enjoying real dialogue".
With a local presence – even a light one – you can understand the location-specific needs, spot trends and stimulate business”.
The expertise which can subsequently be shared with investors is – alongside the provision of finance – a vital component of Intesa Sanpaolo’s offer. “We are a reference point for our clients”, explains Stangoni.
But hand in hand with the opportunities of the emerging Cuban economy come significant challenges. Recognising and meeting these is crucial, says Stangoni. “There is always a careful balance to be struck between risk and potential. In Cuba it’s not a question of taking a chance and seeing what happens. Our strategy is an orderly one, always subject to careful analysis by our risk-management and compliance colleagues”.
Delayed payments, bureaucratic obstacles and an outdated fiscal system are all potential pitfalls for overseas investors.
“We need to support our clients to manage this early phase of business. The demands are high. We must offer a really good proposition – excellent products, financial package and service”, says Stangoni.
Ensuring that strength is reflected along the entire supply chain – a priority reinforced by Intesa Sanpaolo’s innovative structuring around key industries – is extremely important. “Our holistic approach allows us to remove obstacles, finance excellent smaller companies and give reassuring guarantees. It is a very attractive business model”.
Though Stangoni is first to admit that the job ahead is far from simple, he is excited and optimistic. “I believe we can truly make a positive impact on the industrial fabric of this country, helping remove the causes of poverty. Doing that, serving growth is truly finance at its best”.
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