Cuba--The Economy

January 21, 2014 4:42 AM

Che 1

If the secret to economic prosperity was the erection of Che Guevara murals, Cuba would be the wealthiest nation on Earth. Unfortunately, revolutions are meant as transitions between an inferior form of government, and one that is supposed to be better. Revolution itself isn’t a form of government and socialist sloganeering only takes you so far. In the end, you need to produce things that people need. As one Cuban pointed out, Cuba produces cigars, sugar and more Cubans. That isn’t exactly the making of an economy; ironically, since the advent of communism, all three have seen their production decline.

During my second day in Cuba, a very wise taxi driver tried to explain socialism to me as;

“A big puzzle where you spend years putting the pieces together, only to learn that the last few pieces won’t fit how you want them to. Therefore, every decade, you need to disassemble puzzle and put it back together again so that you can get more of the pieces to fit this time.”

A few devoted socialists humored me by explaining that Cuba had finally created a perfect socialist state without classes. It was working, except that the state didn’t earn any hard currency to pay for imports. Cuba had no choice, but to re-do the puzzle—the foreign currency piece would not fit, yet by redoing the puzzle, they unfortunately took a step away from socialism.

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Cuba then opened up parts of the economy to tourists in an effort to attract foreign currency. At first, it was anticipated that tourists would choose to essentially seclude themselves in beach communities, surrounded by specially selected Cuban workers. The problem was that tourists had money to spend, and it didn’t all go to the state. Suddenly an unregulated market sprung up, driven by tourists. 

In the communist critique of capitalism, whoever has the highest income, is the most valued in society. Today, in the tourist driven economy, prostitutes make the most, followed by tour guides, taxi drivers, bar keepers, waiters and anyone else who is paid in cash, either for services rendered or in tips. Meanwhile, doctors earn roughly US $20 a month while working for the state. Multiple people pointed out that if doctors are now choosing to become prostitutes and taxi drivers, how will there continue to be free health-care? It sounds like socialism in Cuba is having an existential crisis—is it time to re-do the puzzle?

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As one very devoted former communist youth leader pointed out, “Cuba now needs a handful of millionaire businessmen—otherwise prostitutes will dominate the social strata. Too many people have seen spendable money in their hands from tourists, for us to go back to the old system. The current system isn’t tenable. Cuba will have to move forward and continue to liberalize the economy—there is no other choice.”

As investors, that is all that you need to know—they’re about to re-do the puzzle again—now, none of the pieces fit. Once you start to liberalize an economy, the trajectory is set—it will only accelerate from there.  

It has already begun to accelerate. Despite turning economic mismanagement into a science, we saw many Cubans buying flat screen TVs and designer clothing. Somewhere between a massive black market economy, tourism and overseas remittances, many Cubans are actually doing quite well—which I did not expect. That said, the majority are still mired in a form of socialist inspired poverty, where their needs are taken care of, but they cannot get much more than basic food.

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The situation with the currency is emblematic of the problems created by Socialism. The National Peso (CUP) is used by the government to pay government employees or the majority of the people. Meanwhile, the Convertible Peso (CUC) is meant for the tourist economy and only supposed to be accepted by certain businesses catering to tourists. In theory, one US Dollar is worth one CUC which is worth 25 CUP. Of course, in Cuba, it doesn’t work that way. At the government run exchange booths, $100 US Dollars are worth 87 CUC—talk about a wide spread. Meanwhile, CUC cannot convert back to US Dollars and the government mandates that all transactions happen at a handful of government exchange booths. No one will take US Dollars in a transaction outside of the exchange counters and Cubans are not allowed to possess US Dollars. Finally, the vast majority of stores will only take CUC for transactions and will refuse to take CUP—which is what most Cubans actually have.

So you enter the country with US Dollars, convert them into CUC at a horrible spread, but get most of your change back in the CUP that no one will accept. It is like the county fair where you have to buy either food tickets or ride tickets and you always end up with too many of one and not enough of the other. They might cost the same per ticket, but you cannot exchange them for each other. Meanwhile, the kid running the tilt-a-whirl will let you pay a dollar to ride it instead of 8 tickets because he wants to pocket the money. On the way out, you give the food tickets to some cute kid in line because you can only eat so much fried dough before your stomach decides the matter for you. Cuba is that dysfunctional carnival.  

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After the first time that I exchanged for CUC, I wised up to the fact that all the hotel employees are tipped in CUC yet desperate for US Dollars. I have been to many black markets in my life, but exchanging currency in Cuba has the feel of a drug deal, because it is equally illegal. In the bowls of the luggage storage rooms of various hotels, I asked why the bellhops would give me parity or better for my US Dollars.

“Castro says I cannot have it, so I probably want it.”

“When I escape this stupid island, my CUC won’t be worth much in Miami.”

“I can only pay the bribe for my travel visa in US Dollars. Since I won’t return from my travel, I won’t need CUC.”

Like most things in Cuba, there is an element of the surreal in everyday life, but that is to be expected when a government tries to interfere in the economy.

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Che's Victory?? What Victory??

The economy clearly isn’t working right in Cuba, but then again, I certainly expected a whole lot worse. Cuba actually scores very high on GDP per capita for Latin America and I continually wondered how it was all held together given the natural failings of a planned economy.

On one hand, I continually wondered if maybe the Cuban government had a plan after all. Then I realized that no matter how much a government tries to screw up the economic system of a country, people somehow find a way to persevere and survive. When you see the thousands of vintage cars on the streets of Cuba, you will understand what I mean. Given some freedom, Cuba will once again prosper.




In terms of the images, I cannot let Che get all the attention. There's plenty of Socialism to go around....

Che 7

Che 9

Che 8

Trust me, excluding the food, Cienfuegos is indeed failing...


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Cuba--A History

January 11, 2014 4:12 PM

cuba building 1

Cathedral restored for the tourists.

Renaissance era philosophers wandering the ruins of the Roman Empire wondered: What sort of super-humans could have built these structures? What sort of knowledge did they possess that was no longer available? Why did they let it all slip away? The Europeans simply could not comprehend how it could have been lost until Gibbon tried to explain it two centuries later.

As I wandered Cuba, I had the same feeling; who were these people and how was it all lost to them? The irony is that many of them are still alive. This isn’t some distant race separated by a millennia—these are just people who have lived under the curse of socialism.

cuba building 1

Typical building that has been left to rot..

It’s hard to talk about where a country is today, without at least traipsing through that country’s history. In the case of Cuba, there is over 500 years of recorded history. The story starts in 1492 when Christopher Columbus discovered the island on his first voyage. By 1511 Cuba had its first settlement and Havana was founded in 1515.  Almost immediately, Spain recognized the value of Havana as a port and Havana became the primary marshalling point for the annual treasure fleet that transported the metallic wealth of the New World back to Spain. As you can likely imagine, with all of that wealth coursing through the port of Havana, it became a phenomenally wealthy city with major military, naval and administrative positions for the Spanish government. In addition, a successful merchant class grew up to support the administration and trade (often illegally) with various Spanish and unaffiliated colonies. In summary, the first few centuries of Spanish rule were very lucrative for Cuba and particularly Havana.

Of course, the only constant is that there is change. When Spain’s colonies rebelled in the early 1800’s, Cuba remained loyal. By then, the massive treasure fleets were a distant memory—sugar and trade were the mainstays of the economy. The rebellions actually benefitted Cuba as anarchy, wars and successive coups came to define the newly independent countries of South America. First Spanish loyalists, followed by waves of disaffected refugees fled to Cuba. These people brought skills and capital with them.

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If Spain had been better at governing distant lands, it would probably still own most of Latin America—instead, Spain frustrated the Cubans with high tariffs, heavy taxes and a lack of representation in Spain. In 1868 these policies kindled a revolutionary spark that could never be extinguished. Cuba fought three bloody wars against both Spain and its own people. These wars lasted for nearly thirty years and thoroughly exhausted Cuba and Spain. With Spain on the way out, the United States decided to get involved and after a short war, Spain left the Americas forever. The US was now in control and Cuba was a quasi-colony. While Cuba was granted self-rule, the US maintained the right to intervene whenever it chose to—which was often.

US control brought stability, infrastructure and American capital. All three of these had been lacking during the wars. In particular, after three decades of war, much of Cuba was financially destroyed. Americans flooded in to fill this vacuum and became substantial investors and operators of major businesses, from sugar to railroads, to banking and telephony. However, no business was as dominated by American interests as tourism which blossomed under the Mafia with the willing acquiescence of the Cuban government.    

Cuba Building 4

Seen better days...

Havana was an obvious tourist destination for Americans who were restricted from certain guilty pleasures back in the states. Under the Mafia’s “benevolent commercial guidance,” tourism blossomed on the back of drinking, gambling and prostitution. Business in Cuba was also booming as sugar prices entered a multi-decade period of elevated prices, while increased investment lowered Cuba’s production costs. For many Cubans, the half century of American dominance was a very lucrative one, ushering in a large and wealthy middle class.

That said, beneath the surface, things were not right for everyone. While the rich did well, many Cubans in the countryside were illiterate and destitute. Working the sugar fields was hard work, for meager pay. Estimates are that in the first half of the 20th century, nearly a quarter of all employees were in the sugar business. Popular unrest often simmered just under the surface, incensed by a corrupt and inefficient government, union activists, political violence and disgust brought on by the decadence of the Mafia age.

cuba building 8

Imagine how Cuba had once been...

This all culminated with the Cuban revolution of 1959 where a handful of revolutionaries in the mountains were able to garner support amongst the disaffected and eventually overthrow the government. Had the revolution ended with a new strongman—possibly a more enlightened one—Cuba would have continued to sail forward towards prosperity. Instead, Cuba chose the communist path forwards where all businesses and property were nationalized, to feed a dysfunctional ideology.

In the 1960’s, the confiscated wealth served to improve the living standards of millions of poor Cubans through education, training, land distribution and newly appropriated apartments. Very generous subsidies from the Soviet Union perpetuated these standards for decades, while the infrastructure of the country crumbled. When the Soviet Union failed, so did Cuba. During more than a decade known as the “special period,” (following the collapse of the Soviet Union) Cuban standards of living collapsed and have stayed down, despite a recent recovery on the back of tourism. Nothing better symbolizes the failures of communism in Cuba than the fact that the sugar harvest has declined from 5.5 million tons in 1958 to 1.5 million tons in 2013.

Cuba Sugar Mill

One of many deserted sugar mills...

Over the past two decades, since the fall of the Soviet Union, the Castro brothers have somehow held onto power through sheer ingenuity, by slowly re-inventing the country as a tourist destination and slowly loosening the yoke of state control. However, the unspoken story of Cuba’s survival is the constant stream of remittances from émigrés to family members still in Cuba. With the Castros in the sunset of their career, Cuba is beginning to chart a new course—hence my week of discovery.



I've included some additional pictures.

Cuba Bay Of Pigs

Bay Of Pigs 2

Bay Of Pigs Museum.

Original Bacardi Building

The Original Bacardi Rum Building

cuba building 5

Typical street view.

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Amazingly ornate buildings...

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Not a bad street with a coat of paint...

Cuba Waiting

In Cuba, There Is A Lot Of Waiting For Something To Happen (I Don't Think I'd Cope Well With Socialism...)

Cuban Censorship

As long as people use art to protest censorship, there is hope for change...

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Bienvenido a Cuba!

December 31, 2013 5:32 PM

cuba rum

It all started as I was grabbing coffee with a close friend of mine. After a very successful, but exhausting year in Mongolia, I was looking for a holiday location where I could unwind. The prerequisites were that there be limited phone or internet access to avoid roping me back into work. I wanted a place that I could truly escape to and that business could not find me. I was worried that it would take some far-away land to achieve this goal—an African safari—or some deserted Pacific island. I had already spent the morning spinning the globe around on Google Earth—nothing piqued my interest.

Then my friend suggested the obvious; “How about Cuba—the forbidden fruit of American travelers? Your cell phone won’t work, the internet is impossible to access and business won’t come and find you—heck, business cannot even legally exist in Cuba.”

“…But won’t that take months to get the visas in order? I need to leave immediately as I’m due in Mongolia, during the first week in January,” I replied.

“Don’t worry. I’ll get your visas sorted out. Let’s just say that I know people… (wink, wink) Besides, I’ve been there many times in the past decade. It’s finally starting to wake up and shake off communism. You need to see it now, so that you have perspective on it in a year or three when Americans can start investing there.”

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Is This The Real Cuba?

48 hours later, my girlfriend and I were on a plane to Cuba with a visa for the “purposes of attending worship services….to interact with the people of Cuba….to the purpose of friendship and worship.” Those of you, who know me well, will appreciate the irony and incongruity of me getting a visa to do missionary work—then again, the last half century of Cuban history is full of incongruent ironies.

old cuba 1

Is This The Real Cuba? (About A Mile From The First Location--Not For Tourists)

Having lived in Miami for the past decade, I have met plenty of Cubans and heard the disheartening tales of Cuba and the Castro brothers. I expected to find the world’s largest tropical gulag. Instead, I found a cheerful country, full of warm friendly people, some of whom seem to genuinely admire the government—despite its arcane rules and habitual dysfunction. I also found many who were illegally saving their money in US Dollars and plotting their escape from Cuba.

I expected to find an island mired in misery with chronic scarcity of basic goods. Instead, I found a place that was remarkably devoid of extreme poverty—a true anomaly in Latin America. Given the inevitable failings of a purely socialist state, I expected much worse. If you remove the top few percent of wealthy Argentines, the average Cuban is roughly on par with the average Argentine in terms of standard of living and Cuba’s infrastructure is a good deal ahead of Argentina’s—something I certainly did not expect to find.

cuba food

Great Food!!

I expected that men in green army uniforms would harass us as we went about life—typical of military dictatorships with a suspicion of America (we have spent the last half century trying to topple the government). Instead, the police presence was less than that of Manhattan and the military is effectively out of sight. The only government representatives that we met were in Museums—they were both helpful and amazingly patient as I fumbled for words in Spanish.

In many ways, it was an island of contrasts and unexpected surprises. My friend with the visas, was also correct, Cuba is beginning to open up and transition to a market economy. While there is no business to be done by Americans (yet), I spent my week in Cuba trying to cut the Gordian Knot of misconceptions, misinformation and failed economic plans that have characterized Cuba’s last half century of economic dysfunction. I expected to see another failed socialist state, impossible to revive—a Zimbabwe off the coast of Florida. Instead, I was both surprised and impressed by the country and its potential as a future investment destination.

Over the next few pieces, I will take you through my week in Cuba—the misconceptions, the obvious failings and occasional successes of state-planned socialism. This collage of stories was the result of dozens of conversations with ordinary people that I met during my vacation—hotel employees, barkeepers, waiters and especially taxi drivers (who tend to have the best pulse on the economy in every transitioning economy). These people ranged from life-long communist ideologues to those who truly despised the government; however, the majority of the people I met, were simply divorced from politics, frustrated with socialism, but appreciative of the occasional benefits that it brought. I stayed true to my mission of escapism. I did not speak with any senior government officials and I did not engage in any business. Rather, I ate, drank and travelled myself ragged, through dozens of cities and over a thousand kilometers of back roads. Let’s just say, that I’m not the type of vacationer who sits on the beach…

cuba kid with dog

Bienvenido a Cuba!!!



(All Pictures By Mili Martinez)

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Myanmar Part II

October 19, 2012 9:01 PM

My friend Chris Mayer continued his journey through Myanmar. If you missed Part I, click here. If you want to visit the Capital & Crisis website, please click here.


“This is a market of 65 million people where everyone is basically at the starting line. There is no other market like this.”

-- Masaki Takahara, managing director of Jetro (a Japanese trade organization), on Myanmar


If there is one word to capture the potential for tourism in Myanmar, that word would be “Bagan.” (Pronounced “Bah-gahn.”)
Bagan is an ancient city, the home of medieval kings who ruled what is today Myanmar beginning back in the ninth century. In the 13th century, Kublai Khan’s Mongols swept through and that was the end of that.
But during its glory days, Bagan was the site of a pagoda building boom that lasted for centuries. Devout Buddhists as they were, the medieval kings believed building pagodas atoned for their sins. They must have been a sinful lot.
(This reminds me of a snatch of dialogue from George Orwell’s Burmese Days:

“‘Ko Po Kyin,’ she said, ‘you have done very much evil in your life.’

“U Po Kyin waved his hand. ‘What does it matter? My pagodas will atone for everything. There is plenty of time.’”)

The result of the building boom is a place the likes of which exists nowhere else on earth.

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“The plains of Bagan — like nowhere else on Earth”

I took this shot from one of the pagodas, the steep steps of which you can climb up and command stunning views. There are thousands and thousands of pagodas, monasteries and temples in Bagan.
I searched my pictures for the best one, but none of them does the place justice. For as far as the eyes can see in any direction, there are stupas poking out from the surrounding forested plains. It’s a fantastic vista, one of the best I’ve seen in my travels. Someday, this will be a must-see on the tourist trail in this region, right alongside the great temples of Angkor Wat in Cambodia.

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“Bagan — a snapshot of an Asia frozen in time”

Along with my friend Lawrence Mackhoul of Leopard Capital, we took off from Yangon to Bagan to have a look around. One day, we set out late in the afternoon to watch the sunset over the pagodas, which we heard was the thing to do.

We did not find many tourists out and about. In fact, it was locals who sat on a pagoda with us watching the sun go down. One teenager asked if he could take a picture with me. Of course, I agreed. A buddy of his snapped the photo of the two of us -- my 6-foot-2-inch frame towering over him. It was as if that moment broke the ice. After that, Lawrence and I sat for six or seven more photos as locals huddled around us. We became part of the attraction.

It was a charming episode, and I am sure it will all be different in another year or two when the busloads of tourists arrive. Take a look at this chart from CLSA, which shows tourist arrivals in various Southeast Asian countries:

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Even Laos (not shown) has three times more tourists visit annually than Myanmar. With attractions like Bagan, I can’t see how this won’t all change.

But there is much more to see in Myanmar beyond Bagan. We also visited Mandalay, a city of a million people north of Yangon on the banks of the muddy Irrawaddy River. This is the main commercial hub for Upper Burma. We hooked up with my friend Doug Clayton, the head leopard at Leopard Capital, and visited several local businesses.

This was an eye-opening tour in itself: a weaving shop where men and women worked at hand-powered looms, another shop where women made embroidered cloth and men hacked away at various carvings and furniture pieces.

My favorite was a gold leaf shop, where we saw young men hammer away at gold pieces for hours and hours to make superthin gold leaf. Nearby, women sat and shaped the gold leaf by hand into little squares. These little squares once were money. They were small and easy to carry and divide. Today, Myanmarese use them to decorate statues and the like. But gold is still a preferred method of savings in Myanmar. Few use banks. As in most such markets, gold and real estate are kings.

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“Women shaping gold leaf”

Mandalay itself is not particularly glamorous, despite how the name might resonate with you. It’s dirty, crowded, hot and humid. There were lots of motorcycles -- in contrast to Yangon, where they are banned -- and the city reminded me somewhat of Saigon.

Outside the city of Mandalay, though, you find yourself again swept back into the old Asia of storybooks. The lush green landscapes, quiet rice paddies and bright pagodas. A lone white egret stirs as a horse-drawn cart clatters down a dirt path...

Then, you are free to wander around landscapes like this:

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“A walk through the old Asia of storybooks”

It’s cheap to travel outside of Yangon. We stayed at the Mandalay City Hotel, which is not far from the palace in the center of town, for $56 per night. It was decent and clean. What I remember most is getting a 5 a.m. wake-up call from the local muezzin, whose call to prayer seemed to be blaring out of the next building.

From Mandalay, we went to Thandwe, which is a seaport on Myanmar’s west coast. We wanted to visit Ngapali Beach, which we heard is the country’s best. Myanmar has over a thousand miles of pristine beaches. The famous Thai beaches, such as those at Phuket, share the same peninsula and even, by a quirk of national border drawing, the same side of that peninsula facing the Andaman Sea.

It struck us how the Thandwe airport was right on the water -- prime real estate! Only in a nonmarket environment could someone put an airport there. Anyway, we must’ve visited every resort in Ngapali trying to get a sense for how far Myanmar has to go. Most were pretty nice. We tried to imagine how it might develop.

We stayed at Sandoway Resort, which as far as we could tell, was the best of the lot. We had a fabulous room for only $140 per night, which included a kingly breakfast of fresh fruit, fresh-baked croissants (“These are better than what you get in Paris!” Lawrence remarked) and more. This was a world-class resort. The landscaping was immaculate. The service was excellent. And the white sand beaches were virtually deserted.

The local rum was only $2 a glass. Not a bad way to end the trip.

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“Your editor, enjoying the local rum… and wondering what it all means.”

We would end our trip in Ngapali, as our money was running out. Since we had to pay cash for everything in country -- and there are no ATMs and credit cards count for so much plastic -- we had to juggle what we brought. We would both leave Ngapali with less than $100 to our names. (Given the propensity of the locals to reject anything but near-mint currency, for a while we were wondering what we would do if we ran out of money. We would start hawking stuff, we figured. “I’ll give you this camera if you take us to the airport...”)

In closing, it was a great trip. The country has a lot to offer, and tourism is an easy winner here. There is much to see and enjoy. I saw only a fraction. There are still the Himalayas to the north, hundreds of islands in the Myeik Archipelago further south, river cruises on the Irrawaddy, the floating markets at Inle Lake and much more.

The trip affirmed my bullishness on Myanmar and my wish to find some way to capitalize on the transformational changes taking place.

I’ll have more on Myanmar in your next letter.

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Myanmar Part I

October 14, 2012 2:02 PM

For the better part of a year, I have been trying to find some free time to go and visit Myanmar. My good friend Chris Mayer seems to have beat me to it and in the first of what I hope will be many entries (keep writing Chris!!) posted some initial thoughts on his Capital & Crisis website.


"The heat rolled from the earth like the breath of an oven. The flowers, oppressive to the eyes, blazed with not a petal stirring, in a debauch of sun. The glare sent a weariness through one's bones... The evil time of day was beginning, the time, as the Burmese say, 'when feet are silent.'" -- George Orwell, Burmese Days

Dear Capital & Crisis Reader,

I read Orwell's Burmese Days on the plane ride over here. The heat is almost its own character in the novel. Orwell's vocabulary gets a workout describing its oppressiveness.

He knows of what he writes. Orwell was a colonial policeman for a time in British Burma. In my first day in Burma (now Myanmar), I learned to respect the sun. For example, I was going to walk to the famous Shwedagon Pagoda in the morning. But a friend told me I was crazy. "Remember you have to take off your shoes and walk barefoot," she said. "It can get uncomfortable in the heat. Go in the evening and see the sunset and the lights afterward. Or go at 5 a.m. and see the sunrise."

I went to see the sunset. In that 15-minute walk, a mere stroll, I was sweating through my shirt as if I had run 3 miles. It was still so incredibly humid, I can barely describe it. But the visit was well worth it. The towering golden stupa dominates the city. As the sun sets, the colors change around it. The mix of color and light, and the surrounding scene of worshippers and tourists from all over Asia, as well as the hundreds of smaller stupas at its base, make for a photographer's dream.



Earlier in the day, sweating through rattling taxi rides without air conditioning, I met with the country's largest private oil tycoon and its largest property development company. After a few days in Yangon, I visited Mandalay, Bagan and Ngapali. I'll more on the investment scene here in a future letter. For now, some impressions on the city that was once Rangoon.

I took a taxi to downtown Yangon, near the river. I wanted to walk around the old part of the city, famous for its crumbling colonial architecture. In the 50 years of military rule, there has been practically no development here at all. It is a city trapped in time, a kind of Havana of the East.


Motorcycles are banned in Yangon, which gives the city a very different feel than other Asian cities, where seas of motorcycles clog the streets.


I couldn't walk too far without working up a good sweat. So I tucked into a bookstall on the street and picked up a copy of Sir James George Scott's Burma: A Handbook of Practical Information. It was a reprint of the 1921 edition by a small Bangkok press. Scott was one of those rugged Victorian adventurers of the British Empire -- tireless, brave, resourceful. He was a journalist who traveled throughout Burma. Scott learned to speak Burmese and donned native dress. His books are still read today, as he was meticulous in his research and descriptions of Burma, its people and cultures. Scott also introduced football (or soccer) to the Burmese, which today remains a national favorite.

I would enjoy dipping into Scott's book as I traveled through Myanmar, reading his take on places and people. (He also gives sound advice: "The sun should be treated with constant respect and covered head.") Scott spends considerable space on the commercial activities of the Burmese. There are headings for ruby mining, boring for oil, the extraction of jade, tea plantations, opium growing, teak exports, rice cultivation, finance and more.

The population of Rangoon in 1921 was about 340,000 and it was a busy port thanks to access to the sea as well as 900 miles of navigable river to the north. Today, Yangon has a population of 4 million and remains a busy port.

I also wanted to visit the Strand Hotel, the famous old colonial haunt where Somerset Maugham and Rudyard Kipling stayed and drank. I stopped in for a drink at the bar, to cool down after walking around hot Yangon and to soak up the atmosphere of the grand hotel.

I have to say, my first impressions of Yangon were not what I expected. After 50 years of military rule, I was expecting worse. (This is not to excuse the many crimes of the thuggish generals and their cronies. It, instead, is a tribute to the resourcefulness of the people.) The Burmese are poor, no doubt. But it is not a desperate poverty. Yangon gives at least the surface appearance of normality. I saw plenty of seemingly prosperous little shops. I was not approached by any beggars, as one is when in India.

The place has its charms. There are no McDonald’s or Wal-Marts -- thankfully. I met an expat that moved here recently after a stint in Saigon. She told me that it was the little things you miss. There isn't a good coffee shop in Yangon, she said, and finding a good cup of coffee is difficult. There isn't the night life you find in a typical big city. The number of good restaurants is relatively small.

But all this will change pretty soon. That's the opportunity, of course. There is already a pressing need for hotels, which are expensive and not so readily available at the upper end. There is already a shortage of apartments, too. As business opens up, as the investment dollars flow in and as the cranes go up, the old Yangon will change forever.

I was glad to get an early look.

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