August 2011

Cuba's Economy: Where It's Been and Where It Needs to Go

Photo by Tracey Eaton available at:

Last month I had the opportunity to hear an incredibly informative and expansive presentation on the updating of the Cuban economy, by Dr. Omar Everleny Perez, director of the University  of Havana's Center for the Study of the Cuban Economy.  I found it so interesting that I wanted to share it with colleagues interested in Cuba's ongoing economic transformation, and with colleagues who aren't yet and should be.  But the presentation was in Spanish and if you've ever seen my efforts at translation on this blog, you'll know that I have no business translating a large presentation like this!  Which is why I am so thrilled to see that the Cuba Study Group has acquired a translated version of Everleny's lecture (minus the graphs), and posted it here on their website. 

At least two things make the report a must-read.  First, it offers a comprehensive, yet still totally digestible-in-just-8-pages overview of where Cuba's economy was going over the past couple decades and where it must now go.  And secondly, it offers constructive, honest criticism of Cuban economic planning where it is due while providing vision for a more sustainable future where it is needed - and does both in as non-political or ideological terms as possible.  A few highlights:

Media Bias on Pablo Milanes in Miami: Obstacle to Cuban Reconciliation


The extensive coverage the media has given to an very small number of vocal Cuban-Americans who opposed the celebration of a concert held in Miami by Cuban artist Pablo Milanés stands in stark contrast to the sentiment of the majority of the exile community, which has gone largely unreported. For years, we have seen how the media has sensationalized protests by these (most likely the same) small number of exiles who, blinded by their hatred for the Cuban regime, have worked tirelessly to maintain the status quo in both Washington and Havana.

These Cuban-Americans have every right to feel hurt and even hatred as many suffered greatly at the hand of the Cuban government several decades ago. They came to this country in search of freedom and the right to voice their beliefs and we should respect and protect their right to do so. The media has done more than its share to defend these protestors and their rights. But this small minority of Cuban-Americans does not represent the entire exile community. Unfortunately, headlines such as “Exile groups oppose Cuba musician Pablo Milanes’ Aug. 27 concert in Miami,” do little to report the true diversity of the community and sensationalize the small but vocal minority whose main purpose is to make headlines. More damaging however than the sensationalist headlines and all the attention that is given by the media to defenders of the status quo, is the lack of attention given to the majority of the exile community that has long advocated for and supported greater contact between Cubans on both sides of the Florida straits.  

No Man is an Island (Fidel Castro turned 85)

Fidel Castro-No man is an island.

Five years after Fidel Castro’s separation from power, it is essential to examine the role that the former revolutionary leader has played in the current Cuban political system from his convalescence and retirement, and the consequences of this evolution.

The fundamental role of Fidel Castro in the Cuban political system today is two-fold: 1) In terms of government, Fidel Castro is the great counselor, to be consulted on strategic decisions or with respect to the appointment or removal of central leaders, as was the case in the termination of the political careers of his former associates Felipe Perez and Carlos Lage and in the constitution of the new Central Committee at the Sixth Congress, 2) In terms of ideology and international projection, particularly in Latin America, he is a Patriarch of the radical left, advising the new leaders, especially Hugo Chavez, and reflecting on some of the past mistakes made by this political sector (in his Reflections and interviews he has criticized discrimination against homosexuals, hostility toward the market, and Ahmadinejad's anti-Semitism that has been repeated in many of the anti-Israeli condemnations by the radical Latin American left).

Get Cuba off the list of State Sponsors of Terror


It is both untrue and a travesty to paint Cuba as a state sponsor of terrorism as the United States government did in its annual report on the subject last week.

For twenty-nine years, Cuba has appeared on the list, which comes with considerable economic and diplomatic costs.  It disqualifies Cuba from economic assistance, punishes Cuba for engaging in legal trade and financial transactions, and deprives Cuba of access to modern technology by way of exports, to name but a few.

Most of all, the list stigmatizes Cuba – not everywhere, but certainly in the United States and elsewhere in the world where our country’s word is respected and the terrorist label stings and stays.

Terror exists in the world; both the U.S. and Cuba have experienced it, and the purpose of the list is to get perpetrators to stop and enlist other nations in a global effort to get them to do so.

This activity took on special meaning for the U.S. after September 11, 2001, but it also should have come with a greater responsibility to use the list seriously and not use it to play domestic politics on a higher and more fraught stage.

Other nations listed in the State Department’s Country Report on Terrorism, including Iran and Syria, are said to provide “financial, material, and logistical support” for terror groups.  Iran is cited for arming the Taliban in Afghanistan and supporting militants in Iraq who kill American forces; Syria for supplying terrorist groups in Lebanon and Palestinian militants aligned against Israel.

So why is Cuba on the list?

We Now Know: The Real Enemies of the 1966 Cuban Adjustment Act.

Marco Rubio, David Rivera


In 2009, in an interview with a TV station in Naples, Florida, Mario Diaz-Balart compared Cuban Americans traveling to see their relatives in Cuba with unscrupulous businessmen in deals with the Nazis. Mr. Diaz-Balart's unfortunate historical analogy began a constant three-year barrage against the 1966 Cuban Adjustment Act by Cuban American legislators who claim it is misused by a significant segment of the Cuban American Community, the same constituents they are supposed to represent.  

The Cuban government has denounced the 1966 Cuban Adjustment Act for decades as a “murderous” policy and has unilaterally blamed it for the migration of thousands of Cubans to Florida, ignoring the push factors that prompt them to leave their country.  But this rhetoric has never had any effect on American policymakers.  Since 1966, no bill has ever come close to passing in congress that would end the Cuban Adjustment Act. The law gives the benefit of legal residence to most Cubans who came to the United States in search of the economic and political rights they didn’t have in their country. The statute has benefited the United States with an influx of mostly educated Cuban immigrants, who have relatives in the United States helping them to have a smooth landing in their newly adopted country.

Cuba Still On U.S. Terrorism List, but Ileana Ros-Lehtinen Wonders Where the Evidence Went

Last week, the State Department released its annual report on state sponsored terrorism, and wouldn't you know it, Cuba made the list once again.  For nearly thirty years, the United States has named Cuba a state sponsor of terrorism.  It originally made the list due to its support for armed rebel groups in Central America. But for nearly twenty years, the evidence offered for its continuing designation has become so scant it would be funny if it weren't so serious.  Aside from a half a dozen (hard-line) Cuban American lawmakers, who in Washington really believes Cuba belongs on this list?  And yet, it never actually comes off the list.

It reminds me of my credit card statement, which now dutifully informs me that I can pay my bill off quickly, but if I choose to only pay the minimum balance each month, it's going to take me 17 years to pay off a $3,000 balance.  If I just pay the minimum balance, then last few years, I'll end up paying a few pennies at a time.  It's a lot like the State Department's diminishing case for keeping Cuba on the terrorism list.  It gets smaller and smaller but never seems to finally go away.

This year, the case really just amounts to this:

"Designated as a State Sponsor of Terrorism in 1982, the Government of Cuba maintained a public stance against terrorism and terrorist financing in 2010, but there was no evidence that it had severed ties with elements from the Revolutionary Armed Forces of Colombia (FARC) and recent media reports indicate some current and former members of the Basque Fatherland and Liberty (ETA) continue to reside in Cuba. Available information suggested that the Cuban government maintained limited contact with FARC members, but there was no evidence of direct financial or ongoing material support. In March, the Cuban government allowed Spanish Police to travel to Cuba to confirm the presence of suspected ETA members."

Aren't we reaching just a little bit, though, when we're relying on "media reports" to collect our intelligence and make our case?  Of course, there's no sign that State read any other potentially informative media reports, such as the one from earlier this year about Spain and Colombia being unconcerned about the presence in Cuba of individuals who belonged to FARC, ELN and ETA.  Many of the ETA members in Cuba came as part of an agreement with the Spanish government in 1984, and, according to El Pais, some of those who came on their own aren't feeling so welcome in Cuba (two ETA members wrote to a Basque newspaper to complain that the Havana government refuses to let them leave the country).  And there have been plenty of reports about how both the Pastrana and the Uribe administrations in Colombia appreciated Cuba's efforts to mediate in the civil conflict there.  And, several years ago, Fidel Castro criticized the "cruel" practice of hostage taking and called on the FARC to release all of its hostages unconditionally.  All of that is readily available intelligence from media sources.  And then, of course, if the State Department failed to read its own cables coming out of Havana, Wikileaks was more than happy to leak them to the media.  And here's what one of those cables had to say:

Congressman Rivera to Cuban Immigrants: You Can Check In Any Time You Like But You Can Never Leave

Readers may recall that last week, after Raul Castro offered Cubans hope of reforms to the island's overly restrictive emigration policy, I predicted that sanctions proponents would soon realize that the overly generous Cuban Adjustment Act no longer serves their political interests (Actually, it's the Cuban Refugee Adjustment Act, but the 'refugee' part often gets left out).  I had no idea how close to the mark I already was.  Early this month, Congressman David Rivera introduced legislation, H.R.2771 that would make Cubans wait five years to get their permanent residency under that Act, thus keeping them from traveling to Cuba in the meantime.  In June, he introduced a similar bill, H.R.1644, which would withhold government benefits to refugees who visit countries on the terrorism list (can anyone name any country on that list that anyone would willingly return to other than Cuba??).  In office for 8 months and these bills targeting Cuban Americans traveling to Cuba represent 50% of legislation Rivera has authored.

[A bit of quick background: the Cuban Adjustment Act gives the U.S. attorney general the authority to adjust the status of Cubans who arrive in the United States, legally or illegally, to permanent residency after spending one year in the United States.  The act was originally passed in 1966 to resolve the immigration limbo of the first wave of Cubans who fled just after Fidel Castro took power.  At the time, it was the United States policy to parole in all of those Cubans on a temporary basis until they could return home.  But, at odds with Fidel Castro's Revolution, which endured against expectations, those Cubans became exiles, unable or unwilling to return home, and it was for them that the Act was passed.]

The Miami Herald reports that Rivera plans to reintroduce that bill when Congress returns because, rather than withhold the refugee benefits on the front end, he instead intends to propose that the U.S. government revoke the CAA benefits of any Cuban emigre in the United States who returns to the island before five years have passed.  In other words, Rivera wants to keep the welcome mat out to Cubans on the basis that they are essentially refugees fleeing a dictatorship, but then slam the door shut if they deign to return to the island.

Not surprisingly, Rivera's idea is controversial, even in the most anti-Castro circles.

Has President Obama Lost Control of Cuba Policy? (part 1)

Mark Lopes USAID

Mark Lopes, Sen. Menendez ally at USAID


While we wait for President Raul Castro to set an example by releasing Alan Gross for humanitarian reasons, it is worth considering whether President Obama is still capable of the reset of US-Cuba relations that was put on hold while Gross was imprisoned.

Review the Wikileaks publication of a diplomatic cable from Havana to recall the optimistic atmosphere that prevailed on both sides during Bisa Williams’ visit prior to Alan’s arrest.  

Can that atmosphere be restored when the bureaucracy of USAID, backed by closely linked Cuban American hard liners in Congress, seems determined to create further provocation, leading to additional arrests and prosecutions? Under pressure, Senators Kerry and Leahy lifted their hold on $21,000,000 for “democracy” funding, sending good money after bad despite the ostensible preoccupation in Washington to end wasteful government expenditures.. 

USAID’s planned programs almost sound innocent, except that they are designed to carry out the regime change agenda of the Helms Burton law and are part and parcel of fifty years of  unremitting economic warfare, as reported by Tracey Eaton in his invaluable Cuba Money Project blog

  • $6 million for programs aimed at increasing free expression among youth ages 12 to 24.
  • $6 million to expand Internet use and increase access to information.
  • $9 million to support neighborhood groups, cooperatives, sports clubs, church groups and other civil society organizations.

Imagine how Americans would feel if an overtly hostile country undertook similar unauthorized projects in our country despite explicit US laws to the contrary.  Wouldn't we be morally outraged at targeting children as young as 12?

Obama owes Jonathan Farrar a defense.

Jonathan Farrar with the Ladies in White


Edited by Dawn Gable. 

The political battle over the designation of Jonathan Farrar as US ambassador to Nicaragua is a test of whether the Obama Administration lacks any genuine conviction about its foreign policy. Farrar is a professional diplomat with an impeccable thirty years diplomatic career who served a recent term as the Chief of the US Interest Section in Cuba. As a result he became the perfect target of Cuban American hardliners for one, and only one, reason: he implemented Obama’s policy in Havana. Unfortunately for Farrar, the president’s policy is anathema to two Cuban-American Senators: Robert Menendez and Marco Rubio.

The Interests Sections in Havana and Washington are not formal embassies or consulates. Diplomats' movements are restricted and their access to government officials and citizens in both countries is limited. When these entities were created in 1977, under the Carter and Fidel Castro Administrations (Yes, there is a new administration in Havana), they were part of a process of détente and their final purpose was to facilitate negotiations between the two governments and pave the way to a better understanding between the people of Cuba and the United States. This is the source of their legitimacy. They exist with the consent of both governments.

Canada and USA Trading Places on Cuba?

As Canadian Prime Minister Stephen Harper headed to Brazil, Colombia, Honduras and Costa Rica this week in part of what he hopes will be a revitalization of Canada's engagement in the hemisphere, today's Ottawa Citizen offers this critique by a professor of political studies at University of Prince Edward Island:

"Put simply, official Canadian policy toward Cuba is now curiously mimicking the failed U.S. approach of the former George W. Bush presidency - precisely when the Barack Obama administration is initiating a more moderate and more practical Cuba policy . . ."

". . . [T]he key to Canada actually opening the door to the wider hemisphere is clearly not through Costa Rica, but by fostering closer relations with Havana. But if we fail to cultivate closer ties with the Cubans, our vaunted "Americas Strategy" is necessarily doomed to failure."

Citing Cuba's standing at the UN (last October's vote on the U.S. embargo was 187-2), its 30,000 doctors throughout the hemisphere,its inclusion in the Rio Group (which excludes the United States and Canada), and its leadership of the non-aligned movement, the author, Peter McKenna, makes a strong case for why Canada's 'Americas Strategy" fails to factor in a key country which, "punches far above its international weight class." McKenna warns:

"If the Harper government does not revitalize our engagement policy with the Cubans, Canada faces the very real prospect of jeopardizing its long-standing bilateral advantages and ceding those to the United States and others (including the Chinese)."

Stick or Carrot: Can the U.S. Get Alan Gross Out of Jail in Cuba?

How should the U.S. government go about securing the release of Alan Gross, a Jewish American development contractor convicted in Cuba of illegally distributing sophisticated telecommunications equipment to the Cuban Jewish community as part of USAID's democracy building program?  Having exhausted all his legal options - Cuba's Supreme Court declined on Friday to overturn his 15 year sentence - Mr. Gross will be stuck in Cuba unless and until Raul Castro decides to give him a humanitarian release.

Should the U.S. heed the advice of the Miami Herald and Jerusalem Post editorial boards, and reverse recently loosened travel restrictions, until Havana releases Gross?  Or should it instead make an overture - a serious, legitimately courageous one - as Tim Padgett suggests in a Time magazine blog post, and finally remove Cuba from the State Department's terrorism list, for which there has long been scant evidence?

Raul Castro's Speech to Cuban National Assembly: A Must-Read

'We need to clean our heads of all sorts of stupidity.  Let's not forget, the first decade of the 21st Century has already passed.  It's time." (my translation)

I never thought I'd describe myself as "excited" by a speech made by Raul Castro.  Some would say Fidel could hold an audience captive (of course, he often did so simply by holding forth on topic after topic after topic), but Raul isn't exactly known as the gifted, charismatic orator.  Yet, with his latest speech to the Cuban National Assembly this week, he's beginning to prove that his leadership style, too, can inspire confidence by speaking plainly and conveying conviction, compassion, and determination. 

Before anyone accuses me of being too easy to please - and it's the Cuban people he has to please - let's remember that Cubans desperately need leaders who will cut the ideological crap and really tackle the truly pressing economic troubles they now face. (Sound familiar to anyone here in Washington?)   I'd argue that that is exactly what Raul Castro appears to be doing.  

"More than once I've said that our worst enemy is not imperialism, and least of all its paid agents here on native soil, but our own errors, which, if analyzed deeply and honestly, will become lessons to avoid repeating them." (my translation)

In the speech, Raul reflects on economic changes that have been made and those that are still ahead. And for those who have been exasperated at the slow pace of change over the last several years, or, for those who have been dragging their feet because the status quo benefits or comforts them, he offers both an explanation and a warning:

Cuban Economic Reforms Speed Up as U.S. Policy Falls Further Behind the Times

While Washington has so far spent the better part of 2011 wrangling over how to contain a soaring deficit and set the federal budget on a more sustainable path, Cuban policymakers have continued their quest to reorganize the Cuban economy before government costs and citizens' unmet needs finally break a system long recognized as unsustainable. 

"Updating" Cuba's economy ("reform" is a word more often employed by outside observers to understand what's at work in Cuba right now) has required harnessing productive energies of a newly emerging private sector to deliver goods and services best provided by it, so that the state can focus what resources it has on essential sectors such as education and healthcare.  This has entailed encouraging small private entrepreneurs - cuentapropistas - many of them in the service sector, to work in nearly 200 trades, and, it's long been expected, turning over the retail sector to the private sector in the form of cooperatives.  Much updating remains to be done to make these changes really work and work well - such as providing access to credits, creating wholesale markets for the new businesses, building a tax code to regulate the new businesses without stifling them, and, most elusive of all, creating conditions under which Cuban customers will have the purchasing power to help establish these businesses. 

But we haven't seen much change in terms of retail sector cooperatives since the state first began experimenting two years ago with authorizing barbershop and salon employees to rent their spaces, buy their own materials, pay taxes and charge whatever the market will bear.  Come October, Cuba's government daily, Granma,  reports more businesses, such as locksmiths, cafeterias and coffeeshops, will join the experiment, and begin leasing underutilized streetside shop space currently occupied by the state.  Hopefully the list of newly cooperatized businesses will be substantial.  And, hopefully, the salon experiment has taught government regulators what worked well and what didn't.

Much remains to be done in Cuba's economic restructuring process, and not surprisingly, Cubans grumble both at the slow pace of change and the pain of essential changes that hurt in the short run.   Yet, considering the starting point (with the state running even the tiniest bodega), that the process continues is very encouraging.  This week, Cuba's parliament is expected to pass legislation to adopt many of the economic changes that have been under consideration for months.