November 2011

Time to Apply Burma Sanctions Model to Cuba?

As a Cuba policy analyst, I’ve given a surprising amount of thought to our policy toward the politically isolated, resource-rich nation of Burma (Myanmar) half a world away.  

That’s because I used to work for Senator Max Baucus, who in 2003, working with Senators Mitch McConnell, Dianne Feinstein and Chuck Grassley, helped pass smart sanctions against the Burmese Regime.  At the time, Congressional supporters of Aung San Suu Kyi wanted to punish the regime for its crackdown on Suu Kyi and her supporters, but Baucus and Grassley made sure that the sanctions would not be open-ended.  With this new sanctions model, Congress would continue to exercise real oversight over the impact of the sanctions and of the Executive’s efforts to bring other nations on board.  (Here's what Baucus had to say when the sanctions were renewed in 2007.)

With the news that Secretary of State Hillary Clinton will be making an historic trip to Burma, now might be an interesting time for Burma experts to debate whether it was U.S. sanctions, or Chinese influence (too much of it), or any other combination of factors that have led to Burma’s leaders to take steps that have registered as "flickers of progress" with President Obama of late.  But more importantly, over at The Atlantic, Joshua Kurlantzick has offered up “5 Ways to Tell if Burma's Reforms Are Really Working,” which could be helpful to the Obama administration in determining how far to engage the Burmese government.  After all, if the reforms continue and the administration wants to support them –and the leaders behind them – the President may wish to urge Congress to let the sanctions expire when they come up for renewal next summer.  And if not, he can urge their renewal.

Unlike the maze of Congressionally-mandated sanctions against Cuba enacted over the last several decades, the Burma sanctions were designed to expire unless proponents make a compelling case to renew them.  The sanctions only last a year, unless Congress passes a joint resolution to renew them another year.  Imminent expiration of the sanctions means that Congress actually monitors and evaluates the effectiveness of its policy toward Burma every year, instead of leaving the sanctions in place indefinitely at the whim of the single most interested member or members of Congress, as in the case of the Cuba embargo.  With U.S. sanctions always just a vote away from expiration, the Burmese government has a clear picture of the levers at work in the U.S. government and a real incentive to take steps that would encourage U.S. policymakers to scrap them.

But because the Cuba sanctions are open-ended and lack meaningful oversight, Cuban officials insist they can have little confidence that the U.S. will actually take significant steps to improve the relationship even if Cuba does.  

A case in point: two years ago, President Obama sent a message to Cuba’s leaders via our Spanish allies:

Is Cuba Ready to Engage IMF, World Bank?

I’ve just finished reading a new report by Professor Richard Feinberg, a former Clinton administration official and non-resident fellow at the Brookings Institution.  “Reaching Out: Cuba’s New Economy and the International Response,” clocked in at a daunting 101 pages but should nonetheless be required reading for anyone following the island nation’s long-awaited economic restructuring. 

Cuba’s economic transformation is a hot topic, to be sure; another excellent report, Cuba’s New Resolve: Economic Reform and Its Implications for U.S. Policy, written by Cuba expert Collin Laverty for the Center for Democracy in the Americas, offers a detailed look at Cuba’s economic reforms to date, and in so doing, lays to rest any question of whether these reforms are just a temporary fix or irreversible.  If Cuba’s New Resolve argues that Cuba is serious about its economic reforms, Reaching Out offers what the international community should do about it with an 800 pound gorilla - the U.S. embargo - in the room.

I’ll admit that after reading Feinberg’s introduction, I next skipped to the middle for both a history lesson and a pragmatic, creative vision for Raul Castro’s Cuba to reconnect with the International Financial Institutions (IFIs), the World Bank and the International Monetary Fund, as well as with regional development banks, in spite of opposition from the United States.  

Feinberg unravels the conventional wisdom that says Cuba and the IFIs would make unhappy bedfellows – Cuba withdrew from the World Bank and the International Monetary Fund more than 40 years ago – by pointing to successful IFI engagement with nonmembers like Kosovo and South Sudan, and with proud and strong states like Ortega's Nicaragua and Vietnam, with which Cuba shares key similarities.  The IFIs are more interested in “the long game,” Feinberg argues, and their willingness to take things step by step would fit nicely with Cuba’s (urgent) need for gradual changes.  He talks to both sides and a senior Cuban diplomat tells him that “Cuba has no principled position against” engagement with the IFIs  - a statement Feinberg believes signals a real shift in Cuban policy (hopefully a Cuban official will field that question publicly in the not too distant future).  

Meanwhile, IFI experts are more than ready to engage Cuba, and Feinberg argues that U.S. opposition to IFI assistance isn’t as insurmountable as it might seem.  In particular, IFIs can work through trust funds and other donors can administer programs.  Feinberg also sees a role for regional development banks such as the Inter-American Development Bank and the Andean Development Corporation, as the U.S. isn’t a member.

At a time when the United States is noticeable absent and seemingly oblivious to the critical moment at hand in Cuba, Feinberg offers immediate, actionable recommendations for the international development community to engage Cuba now, when it can clearly have a tremendous impact on the breadth, depth and success of the reforms.  His recommendations for the IFIs, Cuban policymakers and the United States include:

UPDATED: Senate Minibus Showdown on Cuba

Wonk-out alert: For those who missed the action on the Senate floor yesterday, The Hill reports that Senator Reid’s “Minibus” appropriations bill nearly crashed over Cuba provisions contained in the bill.  Those provisions were 1) a provision passed in FY 09, FY10 and FY11 that defines the term “cash in advance” for the purpose of complying with a 2000 law that authorized cash in advance food exports to the island, and 2) a provision that would have blocked enforcement funds for a prohibition on Cuban buyers routing their payments for U.S. purchases directly, rather than through a third country bank. 

The former provision was in the original Financial Services Appropriations bill when it was considered by the full Appropriations Committee in September.  The latter provision, championed by Senators Jerry Moran (R-KS) and Ben Nelson (D-NE), was attached to the bill by a vote of 20 to 10 in that committee.  The vote was significant – for Cuban watchers, anyway – because the Chairs of the Intelligence and Banking Committees, and the chair of the Financial Services Appropriations Subcommittee, spoke in favor of the amendment, and because 6 Republicans, including the Ranking Member of the full committee, joined 14 Democrats in voting for it. 

These provisions aren’t exactly huge chunks of the U.S. embargo.  What they would do is inch a bit closer towards reasonable and reliable terms of export (you can’t really call one-way transactions “trade”, can you?), something which the agriculture export community in the U.S. has been pushing for since a 2005 Bush administration rule made cash-in-advance sales impossible to transact. The sales, though they dropped and continue to drop, have continued because the law also allowed for foreign letters of credit in payment, something larger exporters are quite used to and comfortable with.  Taken together, the two rules added cost and volatility to the sales.  Small bore though they may be, the agriculture export provisions give embargo supporters like Senators Rubio, Menenedez and Nelson (of Florida) heartburn because better export terms means more exports and better ties between Cuba and an influencial sector here in the U.S., which in turn could lead to further dismantling of the embargo.

What I can’t yet explain is why the provisions were vulnerable to the Senate rule against authorizing or legislating policy on a spending bill.  The Moran provision that came out of Committee was simply a prohibition on funding, and shouldn’t have fallen upon such a challenge.  UPDATE #1:

Willful Ignorance or Ignorantly Willful?

Selling sunglasses on the street in Havana


A self-employed vendor of sunglasses in Havana


“The Cuban government has said that it wants to transition, to loosen up the economy, so that businesses can operate more freely.  We have not seen evidence that they have been sufficiently aggressive in changing their policies economically”

    President Obama in first meeting with Hispanic journalists, September 12, 2011


"But there is a basic, I think, recognition of people’s human rights that includes their right to work, to change jobs, to get an education, to start a business.  So some elements of freedom are included in how an economic system works.  And right now, we haven’t seen any of that."

   President Obama in second meeting with Hispanic journalists, September 28, 2011

The Obama Administration has minimized the significance of economic reforms underway in Cuba, a part of its rationalization for limiting change in bilateral relations.  Leaving aside the counterproductive illogic of that position as policy, it is disturbing to think they really might be so woefully misinformed. 

Some of the personnel in the US Interests Section in Havana have a cold war political bias that may affect their reporting, but some don't.  It may be that staff in the National Security Council are still giving disproportionate weight to the perspective of the old guard in Miami, but surely others in the White House read the US and international press!

Whatever the reason, ignorance will be less of a defense after publication last week of an excellent comprehensive report by Collin Laverty issued by our colleagues at the Center for Democracy in the Americas.  "Cuba’s New Resolve: Economic Reform and its Implications for U.S. Policy" , available on line here.

Jacobson Nomination Hearing: Obama Administration Boxed In As Cuban Reforms Forge Ahead

Photo available at:

For the first time in fifty years, Cubans will be able to freely buy and sell their homes.  As news of this long-awaited and the biggest yet of Raul Castro’s slow-moving but continuing, irreversible economic reform campaign in Cuba reverberated on and off the island, policymakers in Washington are increasingly – embarrassingly – out of step with what’s actually happening on the island today.  It's like the U.S. embargo has become a wax feature at Madame Tussaud's: questionably life-like and stuck forever in one moment in time.

As Acting Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson appeared before a Senate committee this week that could make or break her nomination to become Assistant Secretary, the able career diplomat was forced further and further into the Cuban policy box the Obama administration has needlessly painted itself. 

Grilled by Senator Marco Rubio (R-FL) on the administration’s policies toward the island, Jacobson repeated that the president's new, more open travel and remittance policies for Cuban Americans and other “certain, very clearly defined” travelers is intended to help foster democracy in Cuba.  And, as have other administration officials in the two years since the limited U.S. policy reforms began, she failed to forcefully and unapologetically insist that not only is exposure to Americans better for the Cuban people than is isolation, but that it’s good for the American people too.

Jacobson should have been armed with a sure-footed answer like this:

Houses, Used Cars and Markets: Change Cubans Can Believe In.

There is much political continuity in Raul Castro’s government, but the recent announcement that Cubans will be able to sell and buy houses and their used cars represents an important change. These are visible economic reforms with direct impacts on Cuban lives. The marketization of these assets unleashes Cuban entrepreneurial spirit and might increase the remittances received from relatives and friends abroad.

For decades, rigid communist regulation of real estate and car sales created major resentment in Cuba, but the government didn’t respond to the public's criticism. After a brief interregnum from 1984 to 1988, when Cubans could sell their houses, Fidel Castro cancelled this right arguing that it was fomenting inequalities, creating a class of intermediaries who were capitalizing on transactions, and rewarding the nouveau riche.  His characteristic aversion to market mechanisms also exerted a virtual veto against the sale of automobiles acquired after 1959.

If India and Pakistan Can Do It, Why Can't We?

India and Pakistan have fought no fewer than three wars, and have come dangerously close to several more - including potential nuclear war and charges of supporting terrorism against India - costing hundreds of thousands of lives.   They are and have been bitter rivals for decades (longer, in fact, that the U.S. and Cuba).   

But, despite all that water under the bridge, Pakistan now says it will normalize trade relations with India (India already granted normal trade relations to Pakistan fifteen years ago).  Not surprisingly, some more sensitive items will remain controlled or banned for trade, and this certainly doesn’t resolve deep, serious and sensitive security disputes between the two countries.  But it makes you wonder, doesn’t it?  If they can do it, why can’t we?

Cuban Scholars Share Lessons of a Changing Economy

Yesterday I had the opportunity to attend a talk cohosted by the Center for Democracy in the Americas, the American University School of Public Affairs and the American University Center for Latin American and Latino Studies, given by several visiting Cuban professors specializing in political science and economics.   I came away with several clear lessons that the vast majority of Americans (and apparently whomever is giving President Obama advice on Cuba these days) do not yet understand about a radically changing Cuba.

Cuban Softball Team Wants to Fly Old Glory

Photo by Gary Buxton available at:

Sometimes, when you read a story like this one, you're reminded why people to people travel to Cuba is so rewarding, important and worth fighting for:

The first time Gary Buxton went to Havana, Cuba, to play softball two years ago, he brought New York Yankees hats.

This time, he's bringing Old Glory.

Buxton, 60, of Holliston is returning to Cuba next month for the eighth time to play softball, traveling with two teams from the Eastern Massachusetts Senior Softball association and a third from Tampa.

The group first traveled to Cuba in 2009 on a well-publicized trip that marked the first time an amateur American sports team entered the communist country. Buxton has returned several times since to play for and against Cuban softball teams.

"We were told to bring an American flag, so it's a good bet probably that not only will they be playing the American anthem but they'll be flying the American flag, and that's never really been done," Buxton said. "Nobody does anything in Cuba without the government saying it's OK."

It's the sign of a changing climate in Cuba, Buxton said. When the Cubans he meets find out he's an American softball player, he is greeted warmly, often with hugs and kisses. His presence in the country, which has been closed for decades, represents something special to the Cubans.