If you want to buy on the ground floor of some hot emerging markets, now is a good time. The unlikely duo of Barack Obama and John Kerry are giving you two opportunities.
Putting money in your pocket was certainly not their intent in opening doors to Cuba and Iran, but it will be the effect. Both nations have been off-limits to American investors for decades. The barriers haven’t disappeared yet, but they will soon.
Am I suggesting we trade with the enemy?
No, not at all. The Cuban and Iranian people are not our enemies. They never were. The enemy was in the two governments, neither of which did its citizens many favors over the years.
In that respect, Americans have much in common with Cubans and Iranians. Like our politicians, theirs mismanaged their economies instead of letting them grow as nature intended. We all need our respective governments to get out of the way.
Oddly enough, that’s what the Obama administration is starting to do. Even a stopped clock is right every now and then.
Free trade is the fastest and most effective way to turn enemies into partners, if not exactly “friends.” Giving more people a stake in stability and economic freedom changes political incentives in ways that are very hard to reverse.
When Iran’s middle class prospers by producing oil and pistachio nuts for the West, and when Cuban resort workers find themselves getting big tips from vacationing Americans, governments in both places will work to maintain that status quo.
Now, you might say that Iran is a brutal regime that is destabilizing its region. It certainly can be brutal, but the U.S. trades with many harshly governed nations. Saudi Arabia’s rulers behead more people than ISIL does and its bombing of Yemen doesn’t exactly promote regional stability. Yet we still trade with the Saudis. Why is Iran any different?
Obama’s openings to Cuba and Iran won’t allow truly “free” trade. The politicians will dole out favors to their friends and interfere in all the usual ways. Regular people will only get the crumbs — but there will be many crumbs and they will grow larger in time.
Cuba and Iran have what they need to become thriving, open economies. They are already thriving in some ways, even without American involvement. Economic sanctions were not having the desired effect in either place, just as they are not driving Russia out of Ukraine
With the U.S. government out of the way, I have no doubt that American business relations will compel leaders in Cuba and Iran to change their ways.
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