Cuba

A trader checks a newspaper at the Santiago Stock Exchange (Ivan Alvarado/Courtesy Reuters). Much is made of ALBA, the Bolivarian Alliance for the Americas, a pact backed by Hugo Chávez and Fidel Castro to integrate the region based on "21st Century Socialism," and incorporating neighbors such as Bolivia and Ecuador among others. Over the past five years, Venezuela has spent some $60 billion to back the project. In concrete terms the achievements so far are fairly limited: sponsoring some 75,000 health workers and subsidizing electricity within the participating countries. This has been undoubtedly helpful to hundreds of thousands, perhaps even millions of individuals, but it is not a comprehensive economic, political, or social model by any means. Instead, many of ALBA’s member countries continue to straddle the ideological fence, remaining open to trade with other regional groupings, as well as with the United States and China. Substantive integration efforts are in fact taking shape elsewhere in Latin America - just without the fanfare. Several of the region’s fastest growing democracies -- Mexico, Peru, Colombia, and Chile -- will sign a free trade accord on May 2.  Connecting two hundred million people, 10,000 miles of Pacific coastline, and over $1.4 trillion of GDP—triple that of ALBA and rivaling the Brazilian economy—the group aims to ease the flow of goods, capital and people to create a common and more powerful front for exports to Asia. The pact brings together Chile and Peru’s strengths in commodities with Colombia’s energy and Mexico’s services and manufacturing. It should help Colombia, whose free trade agreement with the U.S. remains in limbo, and open up Mexico to finally profit from -- instead of just compete with -- China. Additionally, Bogotá, Lima, and Santiago are combining their stock exchanges into the Mercado Integrado Latinoamericano (MILA). MILA will become the largest stock exchange in Latin America, surpassing Brazil’s Bovespa and Mexico’s BMV. The economies of scale should increase liquidity to the region’s expanding – and increasingly diverse -- private sector. With far less rhetoric, these recent efforts will likely transform the way many of the hemisphere’s nations interact with each other in day to day business. It may in fact lead to a new economic model, one based on  "21st century markets," finally enabling the integration Latin American leaders have long sought.

Cliff Krauss’s otherwise excellent article in the New York Times yesterday on the safety risks from Cuban oil drilling in the Gulf of Mexico had one big and important omission: it said nothing about the quality of the Cuban regulator. That quality, of course, will have big implications for the odds of the sort of oil spill that the article talks about. In a trip to Cuba this past July, I had a chance to meet with Cuban regulators and understand a bit about how they’re thinking. The Cuban regulators seem to be on firm methodological ground. They proudly pointed out that they were using the sort of “safety case” approach that was conspicuously absent in U.S. regulation before the Macondo (BP) disaster. Indeed, in that sense, they’re ahead of the United States. The top regulators also appeared to be technically solid. This is, of course, a difficult thing to judge from limited interaction, but I saw no reason to doubt their skill. What worries me much more is the people I didn’t see -- that is, the lower level people. I have two concerns. First, effectively overseeing operations is not just a matter of studying textbooks – it’s a matter of experience. And, despite the fact that Cuba has sent many of its people overseas, such experience (particularly in the Cuban context) is inevitably limited. Second, given the pathetic salaries that Cuban workers receive, the possibility of bribery (or something more subtle) by oil company officials is going to be ever-present. That may undermine whatever approach Cuba chooses. So what’s the United States to do? Senator Bill Nelson has one answer: change the maritime border so that Cuba can’t drill. Unless the United States wants to go to war, this isn’t going to happen. (To be completely clear: I think that unilaterally changing the border is a terrible idea.) The only option is to engage with Cuba as much as possible in an effort to better understand its approach, and, to the extent possible, to strengthen it.

The U.S. State Department continues to list Cuba as a state sponsor of terror, though most experts say the country no longer poses a threat to U.S. national security.

Last night Chris Sabatini from the Council of the Americas and I joined Martin Savidge on WorldFocus to discuss the Obama administration’s policy toward Latin America. The conversation focused on natural resources, relations with Cuba, Venezuela and the war on drugs.

Should Cuba be allowed to rejoin the United States? And what are Iran’s intentions in Latin America. I talked about this issues with WorldFocus last night.

Julia E. Sweig, CFR’s director of Latin American studies, says ties between Washington and Havana may change, but the United States has been downplaying expectations of a breakthrough.  

Brian Latell, who for many years was the CIA’s top Cuban and Latin American analyst, says if Fidel Castro is unable to recover from his ailments his successors are likely to be more willing to experiment with economic reforms. He also recommends the Bush administration establish formal contacts with the Cuban military.

Julia E. Sweig, the Council on Foreign Relations’ top Cuba expert, says there is considerable pressure from congressional Republicans to ease the U.S. trade embargo on Havana by opening up travel and commerce with Cuba, despite opposition from President Bush. In her view, it is time for “a new approach” toward Cuba, and she advocates secret negotiations with Fidel Castro’s government to end Cuba’s isolation. Sweig, the author of “Inside the Cuban Revolution,” says that the 77-year-old Castro is the only Cuban who could negotiate a rapprochement with Washington, and she says it should be done before he passes from the scene.She was interviewed by Bernard Gwertzman, consulting editor for cfr.org, on November 3, 2003.The House and Senate have passed different amendments to a Treasury appropriations bill that, essentially, would allow Americans to visit Cuba without special permission from the U.S. government. The White House is threatening to veto this legislation. What has impelled Congress to push for free travel to Cuba?This is the first time the Senate has voted to lift the travel ban. It is part of a process that has unfolded since 2000, when John Ashcroft, then a Republican senator from Missouri [and now U.S. attorney general], introduced one of the first bills in the Senate to lift the embargo on agricultural trade with Cuba. The House and Senate have each voted on several occasions to strip various pieces of the embargo.As part of the broader sanctions reform debate since the late 1990s, the constituencies seeking the end of trade sanctions with respect to Cuba are the farmers and, increasingly, the travel industry. Increasingly, conservative Republicans are joining the fray because they see U.S. policy as one that isn’t working and in fact is strengthening [Cuban leader] Fidel Castro. They also note that the administration’s arguments about an alleged security threat from Cuba just don’t hold up. For example, the Republican chairmen of the Senate Intelligence Committee and Senate Armed Services Committee both voted to lift the travel ban.This week, the House and Senate will decide whether to send the Treasury bill to the White House with the travel amendment intact. Also this week, the Senate Foreign Relations Committee, under Senator Richard Lugar’s chairmanship, will consider a stand-alone bill, sponsored by Republican Senator Mike Enzi of Wyoming, to repeal the travel ban.The Ashcroft bill was impelled by the farmers?Yes, quite directly.But the current legislation deals with travel. Are travel and farm trade linked?Yes. The two are linked because if you contemplate ending the embargo, you have to break it down into pieces to do it politically and systematically. One piece of it is trade, and the other major part of it is travel. Americans have been banned from traveling into Cuba on and off, but mostly on, for the last 40 years. The link between the two pragmatically is that if the travel ban ends, that means that American agricultural producers will be able to supply the food for the increasing number of Americans who will go to the island and, presumably, to a Cuban economy that would grow as a result of new business from the United States. More broadly, an end to the travel ban would signify the political end of the embargo.Does the U.S. hotel industry hope to get into Cuba?Eventually, but the current legislation [awaiting passage] in Congress would allow Americans to travel but not permit American companies to invest in hotels or operate tourism businesses in Cuba. The tourism motivation is a key economic point. But there are those in Congress who have grabbed on to travel because they view the prohibition on travel as an assault on American civil liberties and because they view the inconsistency of travel rights as unsustainable. For example, Cuban-Americans can now travel to the island much more easily than can non-Cuban-Americans. Moreover, Cuban-Americans can send $3,000 in remittances per year to family members.But the Cuban lobby, presumably, is urging the president to threaten to veto this legislation. Isn’t there a contradiction?Absolutely. The double, triple, and quadruple standard of that dynamic is obvious. The Bush White House seems to be responding to an ever-narrowing contingent within the Cuban lobby, to Cuban-Americans in Congress, and to the president’s brother, Governor Jeb Bush of Florida. The Cuban American National Foundation (CANF), which was launched in the early 1980s with support from the Reagan administration, now cultivates relationships with Cubans and provides financial support to both Republicans and Democrats. As a consequence, CANF has been cut out of discussions on Cuban policy with the Bush White House.Which group has the ear of the Bush White House?The Cuban Liberty Council broke away from CANF, which, after the death of its founder, Jorge Mas Canosa, changed its notions about how to bring change to Cuba and began to support limited exchanges between Americans and Cubans on the island. The Cuban Liberty Council opposes travel and remittances by all Americans, Cuban-American in origin or not. Another group excluded by the White House, the Cuba Study Group, made up of moderate and conservative Cuban-Americans, recently conducted a series of polls that showed the majority of Cuban-Americans no longer support the status quo U.S. policy of isolating Cuba.There was a White House meeting and statement on Cuba in October. What happened there?On October 10, the president announced the creation of a U.S. government commission co-chaired by Secretary of State Colin Powell and Mel Martinez, secretary of Housing and Urban Development, who is Cuban-American. That commission is supposed to review Cuba policy and make recommendations to the president on how to support a transition to democracy. He also announced the administration will step up enforcement of travel restrictions to Cuba.The Clinton White House in 1999 took advantage of its limited legal wiggle room to open up travel administratively. The Bush administration used the same wiggle room to shut it down. It didn’t shut down Cuban-American travel to the island or remittances from the United States to Cubans, which suggests to me that there is a profound cleavage within the Cuban community and within our country on Cuban policy. The White House was responding to Cuban-Americans in Congress and to a very real belief that the Cuban-American vote in Florida is critical. It was critical in 2000 and will be critical in 2004. I think the White House move was a political decision coming on the heels of complaints in Congress and from hard-line Cuban-Americans in Florida that the Bush administration was not holding up its commitment to crack down on Castro.Can you elaborate on the tightening on travel?The president eliminated educational travel with a people-to-people component, the category under which most Americans go to Cuba. The licenses were issued to institutions, such as universities, think tanks, and all manner of groups in American civil society to bring people to the island. Of course, it wasn’t construed to be tourism, but to the extent that people went there and went to the beaches and partied, that has been criticized as an abuse of the people-to-people openings of the Clinton administration and seized upon by the opponents of travel to show that travel doesn’t really contribute anything to Cubans but just puts money into the regime’s coffers.That is now banned?The category is banned and any licenses issued under it will expire next month.What’s the situation in Cuba today?There was a huge [political] crackdown [in April], when 75 dissidents were arrested and put in jail, and three individuals who had hijacked a boat were executed after summary trials and without their being allowed to meet with their families. Human rights conditions in Cuba have always been bad, and they got worse this spring for a variety of reasons. Although the crackdown cannot be excused, the reasons for the crackdown should be understood. The biggest irony is that many of the groups that were busted up were creations of Cuban counter-intelligence and infiltrated by Cuban intelligence officers, as has been the case for decades.In the context of the Bush administration’s National Security Strategy and war in Iraq, the political calculation was probably made in Havana that the White House would always veto [any embargo-easing legislation] that came from Congress. So it was no longer in the regime’s interest to tolerate American support for dissident groups on the island, or to tolerate the traditional practice of American delegations going to the island, meeting with Castro and other members of the government, and then meeting with the dissidents. The crackdown alienated liberal public opinion around the world but, as the votes in Congress show, the momentum to end the embargo hasn’t diminished.I don’t want to diminish the importance of the dissidents, but it is my view that many more dissidents are in fact inside Cuba’s government bureaucracy. They’re inside legal institutions. They’re inside the Central Committee of the Communist Party. They’re active within the regime, as well as outside of it. What’s happened over the past 10 to 12 years is that the regime has been in a siege mentality, just as it has been for the last four to five decades. There was a time in the early 1990s when those in the regime who were pushing for more active economic and political reform had a much louder voice than they have today.There is a dynamic that to the extent that the United States looks to be loosening up on Cuba, the reformers on the island have more space. But our embargo and its tightening always reinforces the hardliners, who want nothing to do with the United States. I think the crackdown in the spring came at a moment when it was perceived in Havana that there would no longer be any political payoff for tolerating American encroachments through AID [the U.S. Agency for International Development] funding, which was an overt/covert way of funding opposition on the island.What’s the economic picture?There are now about 350 joint ventures with foreign capital on the island. The country has survived a crisis wrought by the collapse of the Soviet bloc and managed a modicum of growth. There remains a large unemployment and underemployment problem that does not show up in official statistics, and imbalances in the labor market leave highly qualified professionals to seek employment in tourism or on the black market to earn dollars. As in Central America, remittances, at least $1 billion per year, help offset the poor economic environment, to be sure.What is Castro’s condition? Is he in decent health? Is he really running the country?He seems to be in fine health, and I think he is running the country with a lot of support from a lot of other people. He’s the keeper and the creator and the builder of the consensus, and I see him more and more as a king who can’t find a way to step down from the throne. There’s a whole crew of second- and third-generation loyalists who function at every level of that society in official capacities and who are running the country. And then there is a sort of old line fraternity of individuals who have been around or close to Castro for decades who are the most suspicious of the United States and the most reluctant to change but who also believe that if anyone can make a change possible bilaterally, it is Castro. His brother, Raul Castro, the immediate successor, has said as much.You’ve been watching this scene for a long time. What do you think the United States should do?I think we need to have private, unpublicized discussions bilaterally with the Cuban government, because right now we have no interlocutors on the ground. Yes, we have an interests section in Havana and the Cubans have one in Washington. But the contacts are very low level and they are not at all productive. The politics of the issue have changed. The state of Texas supports the end of the embargo. The Republican Party is split. Congress has voted year after year for a change in policies. So what we are doing now is helping keep the old guard in Cuba in place. We need a new approach. I wouldn’t do it in minor, piecemeal ways. I would have these talks include senior level discussions with Castro himself. He understands that, once he goes, there is no individual on that island who could cut a deal with the United States. Yes, he likes power, but I think he believes he could turn over the reins if the enmity toward the United States were to diminish.Have there been high level talks in the past?Under the Clinton administration, there were all kinds of channels open. We had emissaries. Dialogue took place, directly and indirectly, between the Clinton administration and the Castro government in the 1990s. There were third party interlocutors, including heads of state, as well as cabinet members representing the United States. There are plenty of ways to have a dialogue. On pragmatic issues of national interest, the two governments have been able to overcome history and ideology and [found a way to] cooperate. For instance, [then Under Secretary of State for Political Affairs] Peter Tarnoff and [Cuban] National Assembly President Ricardo Alarcon secretly negotiated migration accords in 1994 that allow 20,000 Cubans to come to the United States legally every year. There was a brief political fallout, but it was overcome. And President Bush has committed himself to sustaining those accords, which were the product of secret, politically risky talks. I’m not saying there is no risk. But the White House today seems to respond mainly to domestic politics in an election season, not to the national interest on Cuba. Eventually, the Senate will have enough votes on some embargo-busting bill to overturn a veto.