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In Cuba, seedlings of capitalism

Entrepreneurship might seem like an odd word to associate with Cuba, but it seems increasingly apt, given the individuals I met during a week traveling the island. From the tobacco fields three hours outside of Havana to downtown restaurants that rival the finest Philadelphia has to offer, one can find the seedlings of capitalism and businesses built for profit sprouting everywhere.

A group of American tourists on a guided tour visit Old Havana, Cuba.
A group of American tourists on a guided tour visit Old Havana, Cuba.Read moreDesmond Boylan / AP

Entrepreneurship might seem like an odd word to associate with Cuba, but it seems increasingly apt, given the individuals I met during a week traveling the island. From the tobacco fields three hours outside of Havana to downtown restaurants that rival the finest Philadelphia has to offer, one can find the seedlings of capitalism and businesses built for profit sprouting everywhere.

Don't misunderstand. Cuba remains a nation of great disappointment and contradiction. Friendly people live amid spectacular scenery but are nevertheless trapped in a socialist system that never delivered on the promises of the revolution. So often, on the same residential block, I was transfixed by both natural and architectural beauty, while distressed by the sight of squalor and blight.

And yet, amid the decay, there are unmistakable signs of initiative and optimism, people who represent hope and the prospect of freedom to come. Or, to put it in our current election parlance, you could say that where I expected to see shades of Bernie Sanders, I instead found Gary Johnson.

Have a cigar

For 30 years, I've nursed a cigar-a-day habit that made me keenly interested to visit farms in the legendary Pinar del Rio province, which generates the world's finest smoking tobacco. The three-hour drive from Havana offered the most picturesque scenery I have ever witnessed, reflective of an artist's palette. Richly colored brown earth, lush green vegetation, gray-tinted mountains, and an azure sky provided a spectacular backdrop for primitive housing in a countryside dotted with roosters, pigs, horses, chickens, goats, cows, bulls, peacocks, dogs, and cats.

Here, Alejandro Robaina was cigar royalty until his passing in 2010 at age 91. His family name still appears on the label of a famed Cuban brand. The man known as the Godfather of Cuban Tobacco was succeeded by son Carlos, who today is the public relations manager of La Casa del Habano, the preeminent cigar emporium in Havana. Meanwhile, Alejandro's grandson Hirochi oversees the family farm.

So imagine my surprise when Hirochi Robaina greeted me at his home by handing me a cigar with a label bearing his initials - made not in Cuba, but in Nicaragua.

The 40-year-old heir to his family's dynasty told me that his chief priority is the future he can provide for his four daughters. And so, while 90 percent of what he grows on his Cuban farm near San Luis automatically goes to the Cuban government for the state-run cigar monopoly - some of which presumably ends up in the Cuban cigars that the government brands with his family name - he himself is eager to promote cigars in which he can share the profits, hence those made in Nicaragua under his personal HR Cigars label.

Handmade cars

One of Hirochi's Cuban contemporaries is Luis Gonzalez Saez, who is self-employed as a mechanic, but seems better described as a magician.

We met inside what he described as his "man cave," a sub-rosa garage in the Vedado section of Havana surrounded by old motorbikes. The 49-year-old lover of all things motorized told me he's been interested in tinkering since his rural childhood. After completing his mandatory state education and military service, Gonzalez turned his attention to keeping Harley-Davidson motorcycles and prerevolution 1950s American automobiles running in the absence of company-manufactured parts.

His own 1953 Buick Roadmaster is testament to his improvisational skill set. The body of the car is all original Buick, but its current suspension came from parts he procured from a Russian jeep. The motor is from a boat (a Perkins 90 hp). He rebuilt the steering with help from a Kia. The transmission came from a Hyundai; the housers from a Chevy; the shocks from a Renault truck; the disc brakes from a Mercedes. No wonder he calls it his "small Frankenstein."

Standing near an operable 1936 Harley, he showed me a long chain he reuses on a variety of motorcycles. It was once part of an assembly line at a now-defunct Cuban Coca-Cola plant.

And to what does Gonzalez aspire? To open a Harley dealership in Havana, of course.

Art and food

Entrepreneurial spirit is also alive and well among many Cuban artists, including Lester Campa and Henry Aloma, both of whom reside at Las Terrazas, Cuba's first biosphere reserve and home to roughly 1,000 residents.

Aloma paints in a small home he shares with his family. He sells colorful, nature-inspired sketches from an easel that stands a few feet from where his young daughter, with an angelic voice, practices her singing with a group of kids from the community.

Campa has already established a reputation that extends far beyond Cuba. He has exhibited in the United States and will soon visit again. In his lakefront home, he proudly displays an acrylic he painted of John Lennon in a pose wearing a hat made famous by Che Guevara.

Campa told me he soon hopes to show this piece to the actor Benicio Del Toro, a potential purchaser, who, I suspect, had better be ready to pay six figures should he be interested.

There is another revolution in Havana today - this one involving restaurants, not government overthrow. Or, more specifically, paladares, which are privately owned.

Among them is the gold standard for fine dining in Havana, La Guarida - a third-floor masterpiece with roof deck set in an otherwise crumbling apartment building. Enrique Nunez is the Stephen Starr of Havana, and his food and ambience would earn him four bells from Craig LaBan. The restaurant was the setting for the critically acclaimed movie Fresa y Chocolate (Strawberry and Chocolate). Foodies in Havana can now access an app called Cuba Paladar offering information and critiques of 50 or so paladares in the city. Of course, that assumes WiFi is available, which is usually not the case unless you are in a hotel or have spent $2 purchasing an access card for an hour of internet in public spaces.

Massimo Carocci and his wife, Lien, have just opened one of Havana's hottest new restaurants, Versus 1900, a paladar on Calle Linea, one of Vedado's main commercial thoroughfares. They serve exceptional fusion cuisine for roughly $20 per meal.

Carocci is a 45-year-old Italian who previously worked in Europe as a corporate financier, and whose only prior restaurant experience was as an investor in Italy and Spain.

Five years ago, after government regulations changed to allow the purchase of private property, he and his wife acquired a grand home built in 1895, featuring high ceilings with full-length windows and doors. The property was in serious disrepair while still in the family of its original Spanish owners, the descendants of whom endured the tumult of 1958 to 1962 but chose to stay while so many other people of means evacuated the island. Their reward for remaining came when they were able to sell to Carocci and acquire a smaller, more manageable home for themselves.

"Not long ago, this was not the situation," he told me. "It's now much easier to start up a business like this."

As we sat in his private office on the second floor, which houses his 50-seat restaurant (he built a plush "chill" deck on the roof), I asked whether the restaurant was really privately owned, or more accurately described as a joint venture with the government.

"Yes, we own it," he assured. "The government is not my partner. The tax rate is similar to other businesses. It's progressive, so it depends on how much you make. It can be as much as 50 percent of profits."

Carocci said the Cuban government is keen to have his type of business established, both for the employment it provides the locals and the attraction it offers for tourists.

"If I compare this restaurant to this same type of food business elsewhere, the margins are potentially better," he said. "The concept is different. Normally here, you own the real estate, and not a lot of people are renting. So this is both a real estate investment and an ongoing business. The rental market is not developed, so that could be another step in the future."

Day to day, his biggest problem is the lack of wholesale purchasing. "We have to go to normal supermarkets, and there is no continuance of supply," he said. "To go and to find is very time-consuming. We spend lots of time looking and buying."

Old and new

Of course, this is still Cuba, and so contradictions abound. Not far from the ambience of La Guarida and Versus 1900, I watched a thirty-something woman obtain her monthly rations at a corner bodega in Old Havana surrounded by slums. Regardless of income, all Cubans are assured of the basic necessities every month. While the Cuba that Fidel Castro conquered was the wealthiest tropical nation in the world, that bounty came with a parallel world of huge impoverishment that sadly remains. And with Fidel's "reforms" came the libreta, or ration book.

When the Soviet Union was subsidizing Cuba, that book meant not only necessities, but also free gas and even free cigarettes. Today, it equates to rice, sugar, cooking oil, coffee, black beans, and salt. President Raul Castro has suggested needs-testing, but that is being met with resistance.

Best positioned among the new business-seekers are those in the travel industry. Sonia Laguna founded as soon as she realized that the Obama administration would chart a different path with the land of her birth. Laguna told me that at age 9, she was aboard the last Pan Am flight from Havana to Miami (on May 12, 1972), together with her parents and 7-year-old sister. Her parents have never been back.

"My mom comes from the old generation that doesn't want anything to happen to Cuba unless the entire political system changes," she said. But Laguna, who lives in Miami, is now busy booking passage for Americans who want to visit. She operates so-called people-to-people interactions, one of 12 categories of license for people to visit legally.

"It requires an agenda to see the country and talk to people," she told me while planning my trip. "You can't just sit on the beach."

I can attest to that. I'd previously been to Cuba in January 2002, accompanying U.S. Sen. Arlen Specter to a meeting with Fidel Castro. I was eager to get back and show it to our four children before McDonald's and Starbucks arrive. Months ago, when I shared with my wife an itinerary Laguna proposed, she responded that "it sounds more like a trip than a vacation." It ended up being both.

'There are cracks forming'

We didn't see many Americans during our stay, but one we did meet was Jonathan Matusky, who was raised on the Main Line and is now the 27-year-old director of the Innovadores Foundation, a nonprofit that is based in the U.S. but promotes technology and design in Cuba. Matusky's mantra is that "Cuban problems can best be solved by the Cuban people."

"We provide resources, education, internet, and workspaces to Cuban innovators and designers looking to solve Cuban problems, primarily tech and design, apps, websites, video game developers, clothing designers and manufacturers, and graphic designers," he said.

Long-term, Matusky seeks to provide investment to Cuban entrepreneurs. He enjoys the backing of American entrepreneur Miles Spencer, a Norristown native who cocreated the reality television show MoneyHunt, and John Caulfield, the former chief of the U.S. Interests Section in Cuba - who was essentially a de facto ambassador at a time when we had none.

"There are cracks forming. We're kind of the water getting into cracks and waiting for it to freeze," Matusky told me as we sat in a cigar lounge in the Miramar neighborhood of Havana.

"There is no shortage of small problems to be solved, so there is tremendous opportunity for entrepreneurs, especially because it's such a unique place. Many things you can't solve from outside. You need to live here or be here regularly, or are yourself Cuban and understand the problem. There is tremendous opportunity for Cuban entrepreneurship," he said.

Matusky repeated for me words he ascribed to the CEO of a Cuban app developer, who told him: "Our technique is to beg for forgiveness rather than ask for permission." By that he means that right now, everything is in a regulatory gray area; entrepreneurs are getting away with more than is explicitly permitted by law.

"The only way to get anything done is by trying things out and hoping you don't get in trouble or are held back by government," Matusky said.

No one I met in Cuba was more knowledgeable about the changes and the island spirit than Christopher P. Baker. The swashbuckling travel journalist possesses a bachelor's degree in geography and a master's in Latin American studies, but his real education seems to have come from a varied and deep circle of friends and acquaintances he's acquired in Cuba during his many visits since 1992. He has authored six books on Cuba alone, and such is the current interest in Cuba that the Moon travel series guidebook he authored will publish its seventh edition in 2017.

"The pace of change is astonishing. It presents a real challenge of keeping this material fresh when the world's attention is now on Cuba. It is the new black of destinations," Baker said over mojitos in yet another paladar, Santy Pescador, a hard-to-find Havana gem that offers fresh sushi.

"The drive of creativity and entrepreneurial expression is being fueled by the tourist boom," he said.

Hidden history

During my stay, and only after exacting a promise from me to never reveal the location, he led me to a hidden garage on the outskirts of Havana where he showed me the body of the last automobile owned by Ernest Hemingway, a 1955 Chrysler New Yorker convertible that Baker is working to restore, along with the actor David Soul (of Starsky & Hutch fame). Among Baker's other passions is leading motorcycle tours all over the island ( He is also is the go-to guide for National Geographic island expeditions. The day we parted, he was leading a dozen motorcyclists on Chilean and European bikes to the Bay of Pigs.

"I've been coming here more or less 25 years. But the pace of change I've seen in the last two years is mind-boggling. I've seen more change in the last two, three years than the previous 20. Not only the tourism, but also the domestically driven change - the money in the system is multiplying, and you can feel it. The sense of commercialism is creeping into the populations and the sense of values is beginning to shift."

Baker cited as an example a Cuban friend involved in tourism who is now opening his fourth business. Already operating a bed and breakfast, horseback excursions, and a photo workshop, he is adding a restaurant while he contemplates introducing jet skis to a local bay.

Still, amid the excitement, Baker worries that history is poised to repeat itself. He ticks off examples of urban deprivation, and notes that where Cubans lack the money necessary to repair the island infrastructure - something I saw while touring the countryside with Baker - they are again dependent upon outsiders, akin to the prerevolution era, when Fulgencio Batista was propped up by the American mafia.

"They are relying on foreigners for investment but are looking for return," he said.

"And the very real prospect is that many Cubans might be left behind - again. There is the potential threat of the circle coming round, whereby a white entrepreneurial upper class benefits while a black underclass is not able to take full advantage. It's the urban underclass I worry about," he said.

Ready to take off

That the now-deprived also want to work and participate in a market-driven economy was evident from the woman in Old Havana who sang a cappella in full costume while selling me peanuts, the roadside purveyors of cheese standing along the main highway from Havana in 90-degree heat, and hitchhikers of all ages and genders in the city and countryside with hands in the air and fingers clutching currency as an enticement for passing motorists to stop.

Baker reminded me that often in the last 50 years, it's been said that Cuba is ready to take off., But this time it feels for real.

Speaking of taking off, prior to departing Havana's José Martí airport, my eldest son dropped into what was billed as the Cyber Cafe. The logo on the glass was of a computer mouse. But inside there was no WiFi, and the clerk didn't seem to know why my son expected to find an internet connection.

Whatever the outcome, the ride is going to be bumpy. That is the only Cuban guarantee.

Michael Smerconish can be heard from 9 a.m. to noon on SiriusXM's POTUS Channel 124 and seen hosting "Smerconish" at 9 a.m. Saturdays on CNN.