The American Interest
Policy, Politics & Culture
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The Contradictions of Our Cuba Policy
Published on June 11, 2013

Visiting Cuba is like taking a journey in a time machine. The streets are filled with 1950s-era cars. The buildings are vintage art deco (albeit often with crumbling facades). Sounds of Caribbean and African rhythms, often produced by elderly musicians, fill the air. Cuba, however, far from stuck in a time-warp, is in fact a country undergoing rapid change. Every day, buildings are restored, new automobiles hit the roads, and new tourist facilities are rising up everywhere, reflecting the political developments happening every day.

I was recently in Cuba as part of an educational exchange that allowed participants to interact with local Cubans from all walks of life—architectural restorers, priests, government officials, editors, economists and diplomats. The U.S. government still restricts travel to Cuba in general, but new rules implemented by the Obama Administration facilitate the ability of Cuban Americans to travel freely and allow all Americans to obtain a license to visit Cuba for educational, religious or other purposes involving “people-to-people” activities. Unfortunately, those purposes don’t include rum, beaches, tobacco, and the more enjoyable parts of Cuban culture as Jay Z and Beyonce recently discovered when two members of Congress sent a letter to the Office of Foreign Assets Control, demanding to know whether their trip was legal. They later noted, “Cuba’s tourism industry is wholly state-controlled. . . . Therefore, U.S. dollars spent on Cuban tourism directly fund the machinery of oppression that brutally represses the Cuban people.”

Tourism has always been a major part of Cuba’s economy, and more and more Canadian, European and Latin Americans are now visiting Cuba. The talk I heard on my trip is that tourism will soon be restored as a major source of revenue, especially when Americans begin to arrive in droves. Cruise lines, hotels and other international tourism companies have all developed plans to move into Cuba as soon as possible. The Cubans I spoke to all remarked on the inevitability of change after the “biological solution”—that is, the death of the Castro brothers by old age or illness.

There is no doubt that Cuba is ruled by an authoritarian regime. Amnesty International recently noted, “In spite of recent changes to the migration law which makes travel abroad easier for Cubans, the Cuban government continues to maintain a swath of laws aimed at preventing political dissidents and human rights defendants from exercising their freedom of expression, association and assembly.” Our tour group did experience tight state control over our itinerary; it was not possible for any of our group to take off and visit other areas on our own.

When we visited the Cuban Ministry of Foreign Affairs to meet with the head of its North American Division, I was impressed that we did not have to undergo the screening accorded to visitors by U.S. government agencies. When I commented on this to a colleague, he remarked jokingly that we had doubtless already been carefully vetted in advance and nothing suspicious must have been found when our rooms had been searched, so we had been deemed safe.

But the fact that Cuba remains an authoritarian regime does not automatically lend credence to all accusations of brutality. It would be naive to argue that no member of our tour saw signs of oppression.

It is also worth noting that, while poverty in Cuba is plain for all to see, the country has been praised by UNICEF for “being on track to achieve most of the UN’s Millenium Development Goals by 2015, having greatly reduced infant mortality, hunger and poverty, gender inequality, and achieved practically universal education.

Still, there is no doubt that life is hard for many Cubans. The average wage is about $30 per month, although I visited a government shop where basic supplies that are heavily subsidized by the government are sold at very low prices. Staples like sugar, cooking oil, and tobacco are supplied to citizens with ration cards.

However, this centralized, heavily regulated economy has become so unsustainable that the government has instituted some decidedly un-socialist reforms in areas such as self-employment and small businesses creation, increased autonomy for firms in regards to wages, prices and financing, greater freedom for Cubans to emigrate and travel abroad, and distribution of land to farmers. Driving across the country, we were struck by the vast expanses of uncultivated land—testimony to the weaknesses of Cuba’s agricultural system, which meets only half of the country’s food requirements. The state farms have low worker productivity, and along with family farms and co-ops they suffer from a shortage of inputs such as irrigation pipes, insecticides and credit. Until the Revolution in 1959, sugar and coffee were significant cash crops for Cuba, generating enormous amounts of revenue. Sugar production was abandoned because of low prices, although in recent times there has been a modest revival. Coffee production is also limited—much to the amazement of the Vietnamese, who received technical advice from Cuba when developing coffee as a major export crop.

By distributing land to farmers and introducing limited free market elements, the government hopes to diminish the country’s heavy dependence on food imports, generate foreign exchange, enhance state revenues and provide private sector jobs for the thousands of Cubans who will be unemployed as the size and reach of the bureaucracy is reduced.

These reforms, represent relatively small steps given the magnitude of the country’s economic problems but everyone we met with generally agreed that Cuba has entered a new stage, and that the reforms are probably irreversible (although minor setbacks remain possible). The trend is clear: these small reforms will likely be followed by others that will incrementally dismantle the existing socialist framework and lead to the emergence of new socio-economic communities. Current and future reforms will also have profound political consequences, for new groups will inexorably seek to influence the political system. Nevertheless, political change will not come easily; the country’s authoritarian system is deeply embedded and the political elite is determined to maintain control.

Given the concern with maintaining political power as well as the domestic and foreign realities, reforming the economy so that it becomes a productive engine of growth will be an extremely challenging task. The present system is marked by cronyism, corruption and a heavy bureaucratic hand that will not relax its grip easily. During our travels we met with a couple who had obtained a license to rent out rooms in their house. I asked about bureaucratic difficulties; at first the owner said there were none, but when I pressed I learned that the owner’s attempt to install a rooftop Jacuzzi was being blocked for no apparent reason.

Moreover, the country’s population is aging rapidly; the number of productive young people is relatively small. Many poor Cubans also fear the impact of diminished subsidies on their ability to acquire the necessities of life. Further obstacles exist within the economy itself, such as a lack of credit facilities and a dysfunctional dual monetary system. (Strangely, Cuba has two different currencies. One, the CUC, is used only by tourists and in hotels, restaurants, and stores that are visited by foreigners. The other currency, the CUP, is the one the government uses to pay its citizens wages. Most Cubans want the CUC. The most coveted jobs in Cuba are those working in hotels, restaurants, or bars frequented by tourists because they can receive both CUC’s and tips in dollars or euros that can be converted on a black market.)

Nor can one overlook the external variables. Cuba relies heavily on subsidized oil imports from Venezuela. Should those cease, Cuba would face a crisis similar to that which resulted from the cessation of aid from the Soviet Union in the 1990s. Other factors include the impact of fluctuating world prices and the enormous potential damage caused by natural disasters such as hurricanes. Hurricane Sandy, for example, seriously damaged the coffee crop. The biggest unknown, however, is a potentially a very positive one: the possible existence of deep offshore oilfields in the Gulf of Mexico,  a possibility many foreign companies are eager to investigate.

The most important external factor, however, remains the United States, whose policy is full of contradictions. The policy is still officially based on the principle enunciated in a 1960 State Department memo: “every possible means should be undertaken promptly to weaken the economic life of Cuba . . . to bring about hunger, desperation and overthrow of government.” Though it may be argued that the Communist economic system contributed more to Cuba’s economic woes, the embargo has certainly played a large part. On the other hand, there is a large gap in the embargo, as the United States, thanks to a powerful farm lobby, is Cuba’s chief supplier of food products. Since 2000, it has shipped large amounts of wheat, poultry, pork, corn, soy and other commodities. These sales, which amounted to more than $700 million in 2008, have fluctuated downwards since then, owing to Cuba’s shortage of foreign exchange and its inability to buy on credit; still, they amounted to about $460 million in 2012. To facilitate such trade, the USDA’S Foreign Agricultural Service has a website filled with useful information on topics like finding potential buyers. Individual states have also moved to increase food sales. For example, California has sent an official trade delegation, and Texas has formed its own organization, the Texas-Cuba Trade Alliance, to promote its exports. Such activity is a clear indication of the degree to which U.S. exporters are interested in that market. Given Cuba’s geographical and cultural closeness to the United States, normal trade relations with the island could provide an important boost to the US economy—not to mention U.S. cigar smokers.

The problem with the embargo is not just that it is economically unproductive; it has had little impact upon the Cuban regime—not unexpectedly, given our knowledge of the conditions necessary for effective sanctions. It has clearly failed to achieve its objectives, even with its gradual tightening over time. Indeed the embargo has been politically counterproductive; rather than promoting democratic change it has strengthened the hand of the hardliners within the regime. Many have also noted the hypocrisy of sanctioning Cuba while happily trading with regimes such as China and Saudi Arabia, countries noted for their occasional brutality and lack of commitment to human rights.

Nor can one ignore the damage the embargo causes to U.S. interests in controlling drug trafficking and other criminal activities, environmental pollution and oil spills, humanitarian issues like search and rescue operations, and judicial issues. A recent case involved a couple’s flight to Cuba with their sons in a custody dispute. Following lengthy negotiations, the parents were returned by the Cuban authorities and jailed in Florida. The resolution of this case reveals the degree to which various government agencies have quietly established functional relationships with their Cuban counterparts. Though these ad hoc relationships have been effective, government agencies are legally prohibited from building on these relationships to establish more normal and effective mechanisms.

Today most Americans support changing U.S. policy toward Cuba—according to recent polls, about 60 percent. Attitudes are changing among Cuban Americans, too: In 1991, 87 percent supported the embargo; in 2011, only 50 percent did so. Even so, a new policy will not emerge easily; there are many obstacles to overcome, not least of which is the domestic political scene, which continues to be influenced by a vocal, politically powerful minority that focuses on such issues as compensation for property nationalized after the revolution and Cuba’s lack of progress on meaningful reforms.

By undertaking confidence-building measures, however, the United States could move gradually toward the establishment of normal diplomatic relations. One possibility, for example, involves the Alan Gross case, a by-product of a USAID program that is designed to promote the development of civil society and political activism in Cuba at a cost of more than $50 million annually. Not surprisingly, the Cuban government views this program as an effort to organize a hostile opposition. Having found Gross guilty of engaging in anti-government activities (entering on a tourist visa and trying to distribute computers, cell phones and satellite phones), the Cuban government threw him in jail, where he has languished for three years. The United States has refused to negotiate with the Cuban government, turning down, for example, a trade involving five Cuban agents who were caught trying to infiltrate various Cuban exile groups in Miami, and continues to simply demand his release.

Above all, the United States should undertake various initiatives that would signal that it is abandoning what Cubans perceive as its continuing efforts to turn their country into a pale replica of the American model. Specifically, the Obama Administration could begin by following the precedent set by President George W. Bush. In 2006, he removed North Korea from the U.S. government’s terrorist list, even though a few years earlier he had denounced the regime as a member of the “Axis of Evil.” Removing Cuba from the official terrorist list where it was placed in 1982 (a designation which is particularly offensive to Cuban officials given the generally acknowledged fact that it does not engage in state sponsored terrorism), coupled with existing quiet cooperation in related areas, would send a strong and positive signal to the Cuban government that Washington is serious about establishing a new relationship on the basis of mutual respect, that it believes that the new Cuba should be permitted to continue to evolve in its own direction, perhaps with elements similar to those found in those other former Cold War enemies, Vietnam and China. Whether such a move would lead to a positive outcome remains uncertain. Previous efforts to recalibrate relations by President Ford, Carter and Clinton, for example, met with a hostile response.

Still, given the changes taking place in Cuba, a positive, albeit cautious, response might well be forthcoming and should be met by other obvious measures such as lifting the travel ban on tourism. The present situation, wherein candy bars can enter Cuba while individual Americans cannot, is not sensible policy but farce. And, as progress is made in improved relations, the embargo should be lifted and normal trade relations established.

Taking such actions would not be a demonstration of U.S. weakness but rather a recognition of the realities of interstate relations and the desirability of establishing a normal diplomatic relationship. Relations between states are often characterized by disagreements, even conflict, over various issues, but this does not necessarily preclude mutually advantageous cooperation in other areas. Thus, if this effort proved successful, U.S.-Cuban relations would enter a new era, one similar to practically every other U.S. diplomatic relationship across the globe, few of which are characterized by the total absence of conflicting goals and interests.

Cuba is likely to respond cautiously to any overture and any attempt at rapprochement will necessarily involve difficult and protracted negotiations over many issues. Still, the alternative is continuing contradictions, hypocrisy and, should Cuba indeed collapse economically, a major new challenge for U.S. policymakers.

Joseph S. Szyliowicz is a professor at the Josef Korbel School of International Studies, University of Denver.