Since the demise of the Soviet Union in 1991 Cuba has had to stand on its own. With the presidential reins passing from Fidel Castro to his brother Raul and, in Barack Obama, someone in the White House showing an appetite for closer relations with Cuba, is the future a bright one? Business World asked Dr. Andy Gomez – Associate Provost and Senior Fellow at the University of Miami’s Institute for Cuban and Cuban-American Studies – for his views.

Business World: Cuba is undergoing a transition of sorts, how does this bode for the future?

Andy Gómez: Let’s start by looking at the Cuban population. There are around 11.2million people. Eight million of these were born after the 1959 revolution; they’ve only known one Cuba. Two million were born after the demise of the Soviet Union. These are the Cubans that are questioning the ideology; they want to know what it’s all for.

BW: So what are today’s Cubans thinking?

AG: In 2007 Gallup conducted a poll in Cuba – a sign of progress in itself. Sixty-nine per cent of the population don’t think the government can fix Cuba’s problems; 63% would vote for a democratic government. And its not politics but fear about the Cuban economy that drives this thinking. Most Cubans wouldn’t know a democracy if they saw one – even before Castro, Cuba wasn’t a democracy. What Cubans want are basic human needs, food and a job for example.

BW: But doesn’t the Cuban community in the US help?

AG: At its peak there was around $800m pouring into Cuba from the US. But, the money comes from a majority US-based white population to a minority Cuban-based white population and 62% of the Cuban population is Afro-Cuban. Most Cubans experience no benefit.

The average Cuban receives $17 a month. A Cuban has to work 57 hours to buy a 400g packet of powdered milk; in Costa Rica it takes only 1.7 hours. The system is failing.

And then you discover the government plans 1.5 million job losses. Most Cubans are leading a hand-to-mouth existence, doing whatever it takes to feed their families – legal or otherwise.

BW: So how weak is the economy?

AG: Just look at the figures, and these are ‘official’ government figures so they’re not erring on the side of pessimism. Growth has declined from 4.1% in 2008 to 1.9% in 2010. Over the same period, debt has increased from $3.1bn in 2008 to $53bn in 2010 – that’s $5,000 for every Cuban!

BW: It doesn’t sound very positive does it?

AG: Well that’s not the end of it. Cuba relies heavily on nickel exports; the price of nickel has dropped in each of the last two years, by 40% in fact. Other exports have dropped by 23% and tourism is down. And Cuba is still trying to recover from the damage caused by two hurricanes – $10bn worth of damage.

BW: What encouragement, if any, can you offer anyone looking to invest in Cuba?

AG: Well, 65% of the economy is controlled by the military. So anyone looking to invest is going to have to deal with these people. To put it into context, they have only approved seven joint ventures in two years and in each case the government made sure it controls 51% of each venture.

What’s more, they control construction, electricity, communications, aviation, sugar, tourism and more. So there are several barriers to entry.

Having said that, the rules on private property are starting to change. The government has started to give the Cubans parcels of land for them to work, cultivate and produce food. The international hotel chains and cruise lines are thinking about the future of tourism. That’s going to be very valuable. And above all, there is this tremendous entrepreneurial spirit.

BW: Can anything change while Fidel Castro is still on the scene?

AG: The rumour is he’s not well so Raul is very much in control. Raul is a more pragmatic leader than Fidel ever was. There is a transition that needs to happen that takes Cuba from a nondemocratic dictatorship to some semblance of a democracy.

The key will be how much the players in this change can open up the market without giving up too much control. This is a difficult balance for them to strike but at least there appears to be a developing appetite for it.

BW: So what does a quasi-democratic government under Raul Castro look like?

AG: A Raul Castro government will want to institutionalise the Cuban Revolution. In other words, it will run through institutions, turning charismatic power into rational power.

The survival of the political structure will be paramount; this is why the party congress will take place in April so it can push through the changes necessary form the ‘new’ government. The average age of the Council of Ministers is 78. Many of them will retire; to be replaced by whom? We don’t know.

The ‘new’ government will also offer limited economic reforms. As for what these reforms look like, we’ll have to wait and see.

BW: What are the institutions you speak of?

AG: Firstly there’s the leader: Raul Castro. He will have the major influence on how things are done.

Then there are the armed forces, probably Cuba’s most important institution.

Next, there are the Communist Party, to be reconstituted in April, and the National Assembly, basically a rubber stamping organisation.

Finally, a controlled civil society – Raul will allow some degree of freedom but only up to a point. For instance, I can’t see the average Cuban being allowed to be a member of the National Assembly.

BW: Can this new government satisfy the basic Cuban needs you referred to earlier?

AG: People who study the Cuban situation closely thought Raul Castro would concentrate on the basic needs before making wholesale economic changes, needs such as food, housing, jobs, healthcare and so on. But it seems the economy is in such a mess that change has to happen now. The economic plan they have in mind means restructuring the entire economy.

BW: A lot of change then. How long will this take?

AG: Change takes time, especially the change necessary to move from a totalitarian state to a democracy. It will take at least a generation. It’s not only about changing a political system; it’s about changing the mindset of the Cuban population: they’ve never known democracy. It’s a lot easier to change a system than it is to change the way 11 million people think.

BW: So how does Cuba remodel its citizens?

AG: You can’t just tell the people that democracy is the way forward; they don’t understand what democracy is. What they are conscious of, however, is that there is something wrong with the current system.

Before Cuba moves forward it is probably in for a period of instability. We’ve seen it in Tunisia; we’ve seen it in Egypt. This is what happens when closed societies open up: instability followed by progress. One step back to go two steps forward if you like.

BW: What are the risks and opportunities then?

AG: There needs to be a proper system of law and order. And there is far too much corruption. Also, Fidel Castro is still alive; it will be easier to accelerate the change once he is out of the picture.

As for opportunities, Cuba is in a prime location, with excellent ports. The physical infrastructure is on the verge of collapse and needs to be almost completely rebuilt. Havana’s water supply system was built in 1913 and has never been repaired. These could be opportunities for international companies.

Also on the plus side, Cuba has a very high level of education – one of the highest in Latin America. And, above all else, the people want economic change.