Opening up.

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A Russian-Cuban Entrepreneur Is New Face of Florida

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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At a rally on Wednesday in Hialeah, Florida, which has the biggest share of Cubans of any U.S. city, Senator Marco Rubio told his audience that they embodied the American dream. "As I walk the streets here, it's small business after small business," he said with a fellow Cuban's pride.

One of these 44,000 businesses in Hialeah -- 80 percent of them Hispanic-owned -- belongs to Fabian Zakharov. It also provides evidence that Rubio's view of his community and its relationship with Cuba is increasingly out of touch.

Zakharov Auto Parts sells the rarest of commodities in the U.S.: components for Soviet-built Lada cars. In the Miami area, where Ferraris outnumber Ladas, nobody except perhaps Zakharov himself, who owns several of the Russian clunkers, needs the parts. But the store, its owner says, does $1 million worth of business per year, and Zakharov keeps expanding his retail space.

His customers are mostly locals, but the parts ultimately go to Cuba, where, he says, up to 50,000 Russian cars still roam the potholed roads. Besides, much of Cuba's signature fleet of U.S. vehicles from the 1950s is equipped with Lada engines and other parts: That's how the stately sedans survived the Communist era. Zakharov has no competition: Since he founded the business in 2011, he has obtained deep discounts from suppliers in Russia and brought delivery times down to three days or less, a steep entry barrier to anyone who doesn't speak Russian and doesn't know the ropes.

Zakharov was born in Moscow to a Russian mother and a Cuban father, not an infrequent intermarriage thanks to active student and professional exchanges between the Soviet Union and Cuba. The family moved to the island, where Zakharov grew up and trained as an electrical engineer. But he dreamed of making a fortune, an impossibility under Fidel Castro, so he went back to President Vladimir Putin's Russia in the early 2000s, when that country still looked like a land of opportunity. It didn't work out as he planned. 

"Russia has the same structure of life as Cuba," he says in only slightly accented Russian. "Too many bans, too much bureaucracy, anything you want to do at the bank requires 15 pieces of paper with your signature. It wasn't the type of society I wanted to live in."

He'd set up a small travel business in Moscow that generated enough money for his family to move to the Miami area and for him to consider his options without having to scramble for a living. Then, a relative in Cuba told him he was looking for a Lada part but couldn't find it in the island's erratically supplied, government-owned stores. "The government buys the parts on credit and then Putin writes off the debts," Zakharov explains. "But because the debts to suppliers pile up, there is a limited choice of parts."

So Zakharov sprang into action, leveraged his Russian contacts, got his first deals on the parts and opened the Hialeah store. Even though the Cuban government charges huge customs duties on the parts and delivery is pricey, Zakharov Auto Parts keeps a six-month supply of every imaginable Lada component in its warehouse, and that makes it a good alternative to local stores.

Like many Cubans in Florida, he hates the Castro regime -- it has "turned the country into a big prison," he says. Yet he has no scruples about running a business geared toward the Cuban market. "The Cuban community in Florida is split politically," he says. "There are those who believe in the embargo and in tougher sanctions, but the majority is in favor of softening the embargo to improve the life of Cubans in Cuba. Everybody has family and friends there and wants them to live better."

Hialeah has thousands of businesses working with Cuba. Even school uniforms are rationed on the island, so people there order them from Hialeah. The Miami suburb is where Cubans with access to hard currency get everything, from hardware to baby supplies. Zakharov and other entrepreneurs like him support President Barack Obama's policy of closer ties with Cuba: "Go to Miami airport and look how many charter flights to Cuba there are, and everybody on them is carrying five or six suitcases," Zakharov says.

The view is different from Coral Gables, an affluent city in Miami-Dade County, where I talked to Ervin Gonzales, a top Florida trial lawyer who has won multimillion-dollar verdicts over his 30-year career. Gonzales was born in Miami in 1960, the year after his parents fled Castro's newly established regime, fearing expropriation, imprisonment or worse. In the U.S., Gonzales's father, a history professor, worked as a hotel bellboy, and his mother washed dishes for a living.

"I have never been to Cuba and I'm not planning to go until human rights are honored there again," Gonzales told me. "I don't want to give my hard-earned money to the regime."

He knows that many younger Cubans support the Obama government's strategy of relying on trade and freer movement between the U.S. and Cuba undermine the oppressive Castro system from within. "They think if you pour new wine into an old wineskin, it may rupture someday," he says. "Do I think it will work? No."

Gonzales's history, and the views that come with it, are similar to Rubio's, who is the son of a bartender and a maid. They had come over before the Castro revolution, then thought of returning to Cuba but changed their mind as they watched the Communists establish an iron grip on the country and its people. At the Hialeah rally, he promised the crowd that, if he is elected president, the U.S. government "won't be making deals with tyrants" such as Castro or Venezuelan President Nicolas Maduro, another unpopular figure in Florida's Cuban community. At the Republican debate on Thursday, he said, "Well, I would love the relationship between Cuba and the United States to change. But it will require Cuba to change, at least its government."

Gonzales, however, doesn't expect the Castro regime to fall in his lifetime. Zakharov doesn't believe in its imminent demise, either. The difference is that Zakharov expects the regime's hold on Cuba's economy to slacken as interactions with the Cuban community in the U.S. increase. He says that if the embargo is lifted and Cuba allows more business freedom, he will move his operation to the island, turning it into a network of stores. "I already have the locations scouted out and people interested in opening the stores," he says.

I'm not certain a freer Cuba will need Lada parts for long, but people like Zakharov -- and perhaps the current black-market rich of Cuba itself -- will drive the first wave of investment once government control relaxes. The more traditional Cubans, such as Gonzales and Rubio, will be too slow to jump in, and they'll keep waiting for regime change, which may never quite happen as they hope.

This month, Obama -- who won 48 percent of the Cuban-American vote in 2012 -- is headed for Cuba, and so are the Tampa Bay Rays and the Rolling Stones. That makes me think that Zakharov is right to be making his plans. Jeans and rock-n-roll, not guns and sanctions, buried the Soviet Union. The American dream has more to do with spontaneity and entrepreneurship than with ideological rigidity or, for that matter, historical memory. Rubio's understanding of it may be rooted in Hialeah, but this place has left him behind, and that may be why only about 300 people attended his rally here.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor responsible for this story:
Max Berley at mberley@bloomberg.net