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Monday, December 22, 2014

CUBA: OPPORTUNITY FOR CHANGE



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.

 Although the Marxist Castro brothers Fidel and Raul, who overthrew the corrupt Batista regime in 1959 are still in power in Cuba, the world, the Latin American region and the political context of the U.S. have passed them by.  Their early decades of revolutionary outreach from southern Africa to South and Central America has withered as did their economy and the economic support of the then, Soviet Union and the more recent, and now deceased Leftist Hugo Chavez in Venezuela. 

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.

 Thus, should the U.S. economic embargo eventually be lifted, it can be expected that the influence of the world’s largest economy and geographical proximity would have a similar affect in even larger order of magnitude.

 Congressional opponents of the President’s initiative to reestablish diplomatic relations with Cuba led by Senator Marco Rubio (R-FL) and Senator Robert Menendez (D-NJ) have tied both the economic impact of a possible end to the embargo and the opening of an American embassy to requirements that Cuban President Raul Castro implement political reforms that would essentially change the fifty-six year old socialist dictatorship.  Such reforms of that magnitude are not possible in the short term.  A popular movement for democratic change will have to come about to make significant progress. This does not mean that extending diplomatic relations need wait. 

 The purpose of diplomatic relations is not the promotion of democracy nor is it dependent on pre-existing democratic processes in the host nation.  The purpose is to facilitate communications between governments which in turn allows a means to avoid misunderstandings and better cooperation.  There is also an intelligence gathering aspect to a formal government presence in foreign capitals.  With very few exceptions, the most important being North Korea, Iran, and Cuba, the U.S. maintains diplomatic relations with rest of the world.  Obviously, and appropriately, diplomatic relations are not dependent on local democratic structures or even friendly relations. 

 The cancelling of the economic embargo is a different matter.  The embargo was initiated by presidential action under existing laws in 1962 during the Kennedy Administration. The Cuban Democracy Act (1992) prohibited foreign based subsidiaries of U.S. enterprises from engaging in commercial trade with Cuba.  It also prohibited travel by U.S. citizens to Cuba as well as family remittances from the U.S. to Cuba.  In 1996, the Congress passed the Helms-Burton Act which strengthened the embargo and extended the scope of the earlier embargo to foreign nations trading with Cuba by penalizing those companies for “trafficking” in property formerly owned by U.S. citizens but confiscated by the Castro regime as well as by Cubans who became U.S. citizens.

 Finally, in 2000, under the Clinton Administration, the Trade Sanction Reform and Export Enhancement Act was passed that dealt with the trade of agricultural and medical products which had been allowed under previous legislation.

 To fully restore normal economic relationships and trade with Cuba, all of these laws will have to be eliminated by new legislation enacted by the U.S. Congress and signed by the President.  With both house of the incoming Congress in the hands of Republican majorities the outlook is not favorable.  Cuban President Raul Castro didn’t help initially with his comment that the diplomatic initiative would do nothing to affect the permanence of Cuba’s communist system. While these comments have been interpreted as intended for domestic consumption, especially to privileged hardliners in the Cuban government, they are sure to be quoted extensively in the Congressional debate over the funding of the proposed embassy and the approval of an ambassador.  

 In a similar vein, Senator Rubio’s strong opposition is likely reassurance to the large Cuban exile population in his native Florida.  For decades, the political power of this group has reinforced the anti-Castrol politics of conservative politicians in and out of Florida.  Although the views of this group of Cuban-Americans as a whole are modifying somewhat as the children and grandchildren of the former Cuban citizens move away from the stronger feelings of their relatives, because of the importance of Florida in U.S. presidential elections, the perception among potential 2016 Republican candidates, including Rubio, and former Florida Governor Jeb Bush may be that opposing both the diplomatic initiative and improved economic ties are the best positions to take.

 However, the re-establishment of diplomatic relations should be considered on its own merits and there is no downside in that for either the Cuban population or U.S. interests.  Simply put, Cuba is not a threat in any way to the wellbeing of the United States. The geo-political dynamics of the Cold War no longer apply. Claiming that putting of diplomatic recognition and blocking economic relations until complete regime change is accomplished benefits the people of Cuba after 53 years of failure makes little sense.

 Over a longer term, economic progress and raising the material comfort of the Cuban citizens will awaken the desire for more political liberty and individual freedom.  This will slowly occur with or without U.S. involvement because of the participation of European and Latin American investment in the context of Cuba’s free trade zones.  The process would be quicker with U.S. involvement which is eagerly awaited by American industry. The modification of economic relations in stages also offers the opportunity for the negotiation of political concessions by the Castro regime.  It has been made clear that President Obama, missed an opportunity to negotiate something in the political realm in return for the “gift” of diplomatic recognition.  It is also clear that this weakness has long been characteristic of his interactions with tough foreign adversaries i.e. Iran, Syria, Iraq, Russia.  The Republican leadership in the new Congress will have an opportunity to do much better if they are willing to take it.

 The future of the hard line Marxist regime in Cuba is uncertain. The only thing predictable is the exit of both Fidel Castro, now 88 and retired, and Raul Castro, 83, President of the Council of State.  Currently the presumed successor to Raul who has said he will retire in 2018, is Miguel Diaz-Canel Bermudez who at 54 represents a new generation of leadership from the veterans of the 1950’s revolutionaries who still populate the higher levels of the Cuban government.
 
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.
 


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