For those of us arguing for a change in U.S. policy towards Cuba based on a realist calculation of American interests, Cuba's announcement that the geology in their territorial waters could contain up to 20 billion barrels of crude oil certainly tips the scales. Whether the estimate is accurate or not, the sooner we change course, the better.
Consider the situation. Last month, Cuba was devastated by three hurricanes that ripped up the island's housing, infrastructure, and destroyed one-third of its crops. It was the worst hurricane season in memory, with more than a quarter of the population displaced at one point. Based on an internal food security assessment that I recently completed, the Cuban people are now surviving on Government rations which may run out in December, well before Cuban agriculture bounces back by February or March. While some ministers of the Cuban government have denied the possibility of a mass famine, others have been steadily preparing for the worst. While I now discount the possibility for an October surprise, it is still more than possible that on January 20, 2009 televisions in Miami will have a split screen: one watching the new U.S. president sworn in while the other chronicles severe hunger in or even mass migration from Cuba.
I believe that the threat of widespread famine is actually driving the release of these geological assessments at this time. Whether true or not, Cuba's only way to avoid a famine event is to increase imports of food, for which Cuba desperately needs foreign credit. The prospects of future oil revenues, I hazard, are being put up as collateral for a country whose other export industries: tobacco, sugar cane (and the rum it produces), citrus, and even nickel have been hard-hit by the storms.
Given the almost limitless demand in the global market for oil and the long time horizons on which oil investment is made, I have little doubt that major consuming countries like China and India would hesitate long to begin negotiations with a quick package of sovereign credit to ensure their nation's ability to access those oil reserves once they are more conclusively "proven."
There are other dynamics at play as well. This large a field, should it be proven, would be among the world's largest non-tar-sands fields. It would end Cuban dependence on Venezuela for both energy and cash, making Cuba politically independent for the first time in its history. In which direction would it go? Without having to please anyone but its customers, and assuming oil prices remain high, how would it invest its pool of sovereign wealth? Would it remain aligned with Chavez? Would it expand its third-world medical provision or would it return to exporting revolution?
Yet an outcome that, because of the embargo, excludes U.S. and, indeed, Western investment, is still second best for Cuba. Cuba's tourist industry is still and will remain a major source of national income. Allowing Chinese and/or Indian oil exploration and development companies to drill comes with a significantly increased risk of spoiling Cuba's beaches and territorial waters. As the pollution reports ahead of the 2008 Beijing Olympics showed, China has put industrial output well ahead of the environment and human health. While certainly not 100 percent safe, the much more advanced drilling technology, and the deep-water drilling technology necessary for the Cuban fields, is largely controlled by Western firms who are restricted by Helms-Burton.
It is also bad for the United States. For a whole host of reasons, the United States needs to turn the page with Latin America and Cuba is the first step. Brazil is a rising power, Venezuela is a rising problem, and lasting solutions to our immigration problem will only come from sustainable development in the region, creating a market to which the U.S. will want access.
Fifty years of embargo have not worked as a tool for changing Cuba's regime or politics. Twenty billion barrels of oil conclusively ends the right wing fantasy that has kept the sanctions in place. Financially and therefore politically independent, American influence over Cuba will come from proximity, exchange, trade, and respect. It is best that we shift policy gears so that these more legitimate ties that bind have a chance at forestalling a further turn away from a productive rapprochement between our two countries.
Whatever way you slice it, the utility of the U.S. embargo to Cuba, already in negative territory, just lurched further into the red. Now the question is how to help Cuba become more like Norway and less like Venezuela. For that, our embargo is precisely the wrong policy.
Now the pathway is clear. The U.S. needs to lift the embargo one way or another, to help Cuba get through the hunger coming this winter. Let Cuba spend its oily credits right here in the U.S. of A. We then need to make a decisive policy shift after a new President takes office. If the oil estimate is a bluff, the Cuban people can judge their government's ability to manage the country with massive foreign debts and without the ready-made excuse of the embargo. If the oil really is there, the U.S. needs to encourage Havana to become a tropical Oslo, not a second Caracas.