The Opening of Cuba: Dispelling the Hype of This Otherwise Prudent Policy of Engagement

President Obama’s landmark change in Cuba policy announced December 17th was a prime example of savvy foreign policy. However, expectations of progress should be tempered. The change in policy is good news for diplomats, as Obama has taken a major step towards checking the influence of diaspora groups over members of Congress who hijack foreign policy issues to secure reelection. Opening Cuba to more businesses and investment also means the Cuban people will have more jobs, more exposure, and more opportunities, ultimately a better quality of life. The best news of all is that the Castros’ mismanagement of Cuba will be revealed, and finally, the Cuban government will no longer have an excuse to blame the U.S. for all of its problems.

Some changes, however, may not be so profound. Despite the hype of “opening an embassy,” we should note that the U.S. already has a mission in Havana. It’s staffed by U.S. diplomats and functions virtually the same way an embassy functions, but on a smaller scale. Thus the “opening of an embassy” is more of a symbolic gesture. Furthermore, the new policy, even if Congress ultimately lifts the embargo, will not automatically spur a massive flow of investment to Cuba, as the Castro regime will maintain its grip on the economy and on the Cuban people. Major changes still need to be made, both within the U.S. and within Cuba before anything major can happen. The one thing that is certain, however, is that after 50 years without success, a fresh approach is certainly welcome.

We must acknowledge that it is a good time for President Obama to make this move – foreign policy always needs to be justified at home. A majority of the American people certainly want it; almost consistently since Gallup began asking the question “Do you favor or oppose re-establishing U.S. diplomatic relations with Cuba?” in 1974, 59 percent of Americans have been in favor. Florida International University conducts a poll of Cuban Americans in Miami Dade County, where the majority of Cuban Americans live, which revealed that 68 percent of Cuban Americans were in favor. Notably, the more recent arrivals from Cuba are overwhelmingly more in favor of reestablishing relations than those who left Cuba in the 1960s or 70s. Some older Cubans, however, feel betrayed by Obama opening a dialogue with a regime that treats its own people so poorly, and it is these Cuban-Americans who have had the greatest effect on Cuba policy through their representatives in Congress.

Codification of the embargo into federal law under the Helms-Burton Act has allowed Cuba policy to suffer too long from the passions of the powerful (but small) Cuban diaspora. Some of the most powerful Senators and Congressmen (e.g. Senator Bob Menendez, current chair, and Marco Rubio, incoming chair, of the Senate Foreign Relations Committee, as well as Ileana Ros-Lehtinen, former chair of the House Foreign Affairs Committee) are Cuban-American and rely on the Cuban-American vote to maintain their seats in Congress. The unfortunate part of the new policy is that a presidential order to fully lift the embargo without Congressional authorization would be a clear violation of U.S. law and concrete grounds for impeachment. Obama, thus, stopped just short of this, and instead demonstrated that the executive has a role in finding creative solutions around the all-too-frequent Congressional interference in foreign policymaking.

The policy shift will also create greater incentives for companies to generate wealth in Cuba. Raul Castro’s attempts to reform the economy have caused a moderate uptick in interest. In 2011, the Communist Party congress issued a list of 300 economic reforms, which, if implemented, could have some profound effects. In March 2014, Cuba’s National Assembly passed a new foreign investment law that seeks to attract more Foreign Direct Investment (FDI). Earlier this year, the French Foreign Minister Laurent Fabius traveled to Cuba to discuss France’s desire to improve economic relations with Cuba as other Latin American firms have also begun moving in. Several American companies have also expressed interest in investing in what they see as Cuba’s “totally untapped market.” As part of the new U.S. policy, Obama is allowing U.S. credit cards to be used in Cuba, which will allow for easier commercial transactions. Many of these reforms, if properly implemented, could be a powerful new incentive for already eager investors to generate wealth in Cuba. Greater overall economic wealth in Cuba could make a big difference for everyday Cubans.

However, the devil’s in the details. While Cuba enacted this new FDI law to reducing the profit tax from 30 to 15 percent, this is only applicable to companies that are partially state-owned. This has naturally caused concern from analysts and diplomats who question whether this is indicative of a genuine change in Cuba’s economic ideology or merely token measures allowing the Cuban government to claim it is changing. Cuba needs to attract $2-2.5 billion per year to reach its growth goals, but it is estimated it only attracts several hundred million per year due to U.S. sanctions and its reluctance to actually let foreign companies keep profits. In addition, foreign companies are skeptical that the Cuban government won’t simply seize their investments in another spate like when Fidel Castro first came to power. The Cuban government recently sentenced Cy Tokmakjian, the Canadian executive of one of the largest foreign companies in Cuba, to fifteen years in prison for bribery and “economic crimes,” sentenced two of his aides to twelve and eight year sentences, and seized roughly $100 million of the company’s assets. Western diplomats have questioned the evidence used in the case. While tax incentives are appealing, many businesses fear getting caught up in similar situations, and there is no indication yet that there is genuine change in the business climate in Cuba.

Democracy and human rights are also unlikely to improve in Cuba overnight. Just two weeks ago on December 10th, the Cuban government arrested over 100 Cuban dissidents and detained at least 32 on the anniversary of the signing of the Universal Declaration on Human Rights. Remember, this came one week before President Obama’s big announcement. The Cuban government does not tolerate dissent from civil society, even from the Damas de Blanco, a group of women who simply walk through the streets dressed in white every Sunday as a protest against the government. The recent condemnation of the three “discreet” and probably pretty harmless United States Agency for International Development (USAID) programs, Zun Zuneo (Cuban twitter), the Creative Associates International anti-AIDS campaign, and supporting Cuban rappers, further demonstrate the Cuban government’s weak stomach for even any mild form of dissent. Accusations that these types of low-level soft-power programs are attempting to stir enough dissent to cause regime change are ridiculous. Countless other examples of U.S. engagement with repressive regimes suggests that diplomatic relations and exposure to the West will not bring regime change or even societal change. Saudi Arabia, Burma, or even Russia all come to mind. We are naïve if we believe that, what we see as the allure of the West, is enough to provoke profound societal change.

Despite the uncertainty that anything will change, the U.S. opening to Cuba is the best move Obama could have made to shake things up. Americans want it, it returns foreign policymaking to the executive branch, and it will bring some good to the Cuban people and the economy. But most importantly it will finally reveal the Castros’ failed economic and repressive social policies, and destroy the image of the U.S. as an overreaching imperialist power bent on regime change by any means necessary.

Photo by Nightscream (Wikipedia) / CC BY 3.0


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