Cuba has the most potential of any country in the world to flourish given the right vision, said Carlos Gutierrez, who was Commerce secretary under George W. Bush.
"Cuba as a country with its location, with its resources could be the Singapore of the [Western] hemisphere," Gutierrez told "Squawk Box" on Friday. "It's a matter of what policy you have inside that allows the economy to prosper."
Singapore was transformed in a generation from a sleepy port city into a thriving global hub for international business and finance. Lee Kuan Yew, founding father of the city-state and its first prime minister, died in March at the age of 91. He was Singapore's leader from 1959 to 1990.
"Twenty years from now, Cuba will be a very different place," said Gutierrez, who was born in Havana. "[But] the next two years, there will be ups and downs."
U.S. and Cuban negotiators were working this week on the particulars of re-establishing diplomatic ties between the two countries for the first time in more than five decades.
In December, President Barack Obama outlined steps to restore relations with Cuba that included measures to expand travel to the nation and authorize sales and exports from the United States.
Gutierrez—who appeared on "Squawk Box" the day after the December announcement—said Friday, "I never expected it to get this far."
But the chairman of global advisory firm Albright Stonebridge Group said businesses should not expect to make a killing right away.
"The Cuban system is being overwhelmed with businesses who want to go in, with businesses who want to try it out. Airbnb just went in," he pointed out.
The high-profile online home-rental marketplace said in April that it had started to offer properties in Cuba.
Gutierrez advised companies looking to do business in the country to be patient. "They need to track it. They need to understand how business is done on the ground."