President Obama’s announcement of the reestablishment of diplomatic relations with Cuba was front page news for about two days before being eclipsed by the North Korean computer hack of Sony Entertainment and the internet threats to theaters scheduled to show the movie “The Interview” by an anonymous group or individual calling themselves The Guardians of Peace. But the Cuba initiative is an important issue. While it has been difficult over the last six years to find much positive in the disorganized, and generally inept Obama Administration’s foreign policy, the Cuba initiative is a long overdue acknowledgment of the high level of change in the world order and power configurations since the 1961 annulment of diplomatic relations and the 1963 imposition of the U.S. economic embargo on the island nation.
The isolation of Cuba during the Cold war decades of the 60’s, 70’s and 80’s made sense. The Castro brother’s founded a communist state in 1959 and found a patron in the Soviet Union who subsidized their economy in return for basing of Soviet military assets. In the face of this intrusion into the Western hemisphere by the Soviet Union and the security implications of having a Soviet proxy operating in the affairs of the Latin American nations, Eisenhower broke off diplomatic relations with the Castro regime. After the Kennedy Administration’s failed Bay of Pigs invasion using American trained anti-Castro forces in 1961, Kennedy imposed the economic embargo. The installation of nuclear warhead capable missiles within easy reach of the continental U.S. in 1962 and the resulting “Cuban Missile Crisis, brought U.S./Cuban relations to a new low. Armed with Russian weapons and benefitting from Russian training of their growing military, Castro developed regional ambitions and sought global Left wing revolutionary credibility by encouraging and supporting such movements in Latin America and intervening militarily in conflicts in and across northeastern and southern Africa.
But much has changed since the Cold War ended with the collapse of the Soviet Union in 1991. Soviet aid actually started to unravel in 1989 with Gorbachev’s “reforms” of the Soviet economy. This aid in the form of under-priced exports of oil and over-priced imports of Cuban sugar which along with other components amounted to 3.5 to 4.5 billion dollars a year dried up. This led Castro to experiment with concessions to foreign investors to attract hard currency. A deal with a Spanish hotel company created three resorts and a shopping center and brought in tourists from Canada and Europe. This 1991 venture has been followed by the largest project so far to “internationalize” a sector of the Cuban economy. Starting in 2013, in the port city of Mariel, thirty miles from Havana, a 900 million dollar port expansion is underway in another of Cuba’s “free trade zones”. The goal is to attract more foreign investment. The project, being built by a Brazilian company is scheduled to be operated by a Singapore company. The FTZ in its entirety is meant to attract international companies to Cuba by offering them a low-tax, low-regulation environment in which to manufacture goods. To accomplish this, the government is instituting reforms to decrease its control over many of the financial and commercial operations of these private companies. The importance of this capitalist outreach in the overall socialist economy is that the reforms are having a spill-over effect on the rest of the economy as the Cuban labor and commercial sectors themselves interact with the foreign enterprises.
Hopefully, should Diaz-Canel actually succeed Raul Castro he will possess a more ideological and modernist eclecticism that will recognize the need for economic and political reforms to bring Cuba into the 21st Century. The U.S. need not wait and can commence a cautious but serious process of engagement.