Bring Back the Sandwich Shack, Raul

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Much has been made of Raul Castro’s interpretation of socialism. Earlier this summer before the national assembly, Castro stated: “Socialism means social justice and equality; but equality of rights, of opportunities -- not of income.â€Â The steps that the “practical Castro,â€Â as he’s been called, has taken alongside these statements, while symbolic, have yet to move the nation in any tangible way. And they’re unlikely to. Nimble openings of the past may not draw the same headlines, but they may offer a better avenue forward….
Cuba has made much more serious openings in the past, specifically in the post- Soviet period when the island’s economy nearly ground to a stand still. In 2005, though, Fidel -- bolsterered by support from Venezuela and China -- recanted on liberalizations. He shut down a broad swath of small, private enterprise that had developed, eliminating 2,000 of the “shackâ€Â operations that had sprung up selling pizzas, sodas, sandwiches, milkshakes, and other sweets.

That was just the tip of the iceberg. The Economist reported that 240,000 licensed entrepreneurs and small business owners were whittled down to below 140,000. Along with the opening in the early nineties came legality of possession and use of U.S. currency -- a practice that fueled the flow of remittances from expatriate Cubans, but, along with other openings, was brought to a halt in the early years of the new millennium.

But the reforms that have garnered the boldest headlines since the transition, those allowing the ownership personal computers and cell phones, are symbolic -- Cubans live on an average salary of $17 per month can hardly afford a cell phone, let alone the $700 necessary to buy a computer.

It’s likely that the most meaningful of Raul’s are not about consumer goods but about property and small business. His willingness to increase limits on land that private farms can own by 200% (99 acres up from 33), might help to offset an estimated $1 billion increase in imported food costs the nation will face this year alone. The legalization of private taxis is another good move.

Allowing other existing private enterprise, in the form of hair salons, cafes, and restaurants, to move out of people’s homes and into other locations -- even if property remains owned state, rather than privately owned -- could allow for modest, controlled expansion for already permitted industry.

Ultimately, Cubans are responsible for their own country. Since support for the ideals of the Revolution runs deep, a revolution that has delivered results in terms of universal, quality health care and literacy and that ended the corrupt rule of Battista and his friends in the American mafia, mining, and sugar worlds, the way forward must also be in line with those ideals.

That may mean a nation of small, modern, efficient farms, mom-and-pop shopkeepers, of 99-year leases (like in London) on property and a measured relationship with Chinese, American, and other sources of foreign direct investment. Clearly, however, something has to change.

Democratic Platform on Latin America

I finally got a moment to look at the Democrats' platform on Latin America. In general it's pretty sparse, and on Cuba it only echoes the main bullet points of Obama's speech before the Cuban American National Foundation:

Recommit to an Alliance of the Americas
We recognize that the security and prosperity of the United States is fundamentally tied to the future of the Americas. We believe that in the 21st century, the U.S. must treat Canada, Latin America and the Caribbean as full partners, just as our neighbors to the south should reject the bombast of authoritarian bullies. An alliance of the Americas will only succeed if it is founded on the bedrock of mutual respect and works to advance democracy, opportunity and security from the bottom-up. We must turn the page on the arrogance in Washington and the anti-Americanism across the region that stands in the way of progress. We must work with close partners like Mexico, Brazil and Colombia on issues like ending the drug trade, fighting poverty and inequality, and immigration. And we must build ties to the people of Cuba and help advance their liberty by allowing unlimited family visits and remittances to the island, while presenting the Cuban regime with a clear choice: if it takes significant steps toward democracy, beginning with the unconditional release of all political prisoners, we will be prepared to take steps to begin normalizing relations.

My thoughts on a regional strategy are here. My colleague Steve Clemons has more general foreign policy analysis of the platform here.

More later.

Olympics Highlight Cuba's Conundrum

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Cuba, despite the U.S. embargo, has proven a formidable summer Olympic contender. The nation placed eleventh in the medal count at the 2004 Olympics, an impressive showing for a nation of roughly 11 million -- below 70th in the world in terms of population. In 2000, Cuba was eighth in medals earned, in 1996, ninth.

Since the end of the Cold War America has lost touch with the political competitiveness of the games. With the United States' global power unchallenged, we find ourselves often dwelling on the “good willâ€Â of the games, or on individual athletes whose stories have inspired us. We’ve lost touch with the national pride that a victory can inspire. For many nations, a single medal can be as powerful as the 1980 "miracle on ice," or Mary Lou Retton’s 1984 all around title.

For Havana, the summer games are seen as a time to demonstrate the success of the revolution. They’re an equalizer of sorts -- an opportunity to earn global respect on a level playing field.
But the lead up to the games has had the opposite effect. Multiple defections have underscored one of the many disadvantages of maintaining an authoritarian state with an impoverished economy. Talented people, given the option, will often choose to leave.

And they certainly are. The defection of four major boxers and the sidelining of a fifth who tried to flee but failed, have left the team with inexperienced fighters. This is not isolated. The disappearance of three members of Cuba’s AAA Junior baseball team in Edmonton this week, has set a decisive tone for Havana’s participants in Beijing.

This is a change from just a few years ago. A recent Miami Herald article recalls Felix Savon, who won three gold medals before retiring after the 2000 games, telling Don King -- who had offered Savon a multi-million dollar contract to defect and box professional in the states: “Why would I box for a million dollars when I can fight for 10 million Cuban people?''

Revolutionary fervor, it seems, must be earned. The poor economic performance of the past decade, combined with Raul's lowering of expectations in his July 26, 2008 speech at Moncada Barracks, is not enough to secure even the loyalty of Cubans who have received the best the government can offer.

Maslow's hierarchy of basic needs predicts this problem: people need security, identity, community, and self-actualization, in that order. If they do not get it they either seek it out --in this case, by defecting -- or they become fertile ground for the next generation of revolutionaries...or counter-revolutionaries.

Appeals to nationalism, and, in Cuba's case, a common enemy, have succeeded for decades in keeping Cubans loyal to the revolution. When Cuba felt the sting of real isolation, this worked. But now Cuba is, in effect, fully integrated with the global economy, with the United States being Cuba's fifth largest trading partner despite the embargo. "El bloqueo", far from hastening a change in the Cuban system, is sustaining it by providing a constant sense of threat.

Nationalism and fear are alive and well in Cuba this summer. Look at the Olympic send-offs from the two Castro brothers. Fidel's comments -- “To the glorious Cuban athletes on their way to the Olympic Games: Go forward, and traveling with you is the love of our people to our native land,â€Â -- rang with the mystique of a fabled revolution, while Raul’s farewell -- “You all know what the Cuban people expect from you," sounded far more like the charge of a dictator on uncertain ground.

Cuba stands at a crossroads. U.S. policy has provided a crutch to the Havana regime, a fail-safe scapegoat for any and all of the island's woes. We can continue to prolong a cruel level of economic underperformance, or we can help Cuba face the need to embrace a new path. The choice is ours.

(Patrick Doherty contributed to this post.)

Spring Break, the Fall of the Castros?

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Photo Credit: Bit Boyo

The IMF’s new working paper reminded my editor here at the 'Note -- Patrick Doherty -- of a quote Massachusetts Congressman Jim McGovern offered at the Council on Foreign Relations last year:

“I think there are some Cuban officials -- some in the government, some of the hard-liners who, quite frankly, I think deep down are a little reluctant for change, because it's something they won't be able to control. I mean, I think the two words in the English language that the hard-liners in Cuba fear the most are "spring break." I don't think they would know what to do.â€Â

The laugh line carries considerable weight, though...
As it becomes more and more likely that the embargo will be lifted, it is important to understand how sizable a steamroller U.S. youth culture can be. College undergrads with too much booze, loose inhibitions, and deep pockets might literally grind the nation to a halt if they descended upon Cuban resorts in full force. Too few rooms; too few cabs; too few drunk tanks. Scantily clad, and the very picture of Capitalist materialism, the vanguard of American pop culture would lay havoc to Havana streets.

It is a real possibility. February’s Economist laid out two potential paths for an embargo-liberated Cuba: first, the spring break vision -- with a rapid vacuum pulling the Castro’s and communism from power -- and second, a model where power structures remain intact as capitalism takes hold, as seen in China, Vietnam, and Mexico.

The reality is that any opening to U.S. travel will be done with caution by Havana. The government has some obvious tools at his disposal -- flight and visa limitations being the most blunt. But internal pressure will grow as the Cuban people see the depth of U.S. demand for Cuban exploration, beaches and culture.

A gradual pace might actually be the best path for both Cuba and Washington. To survive rapid change, as Thomas Carothers points out, effective development of political parties, media, civic education, and civil society at large is reqiure. But the infrastructure of Cuban socialism is not well suited to rapid adaptation. Iraq, of course, has taught foreign policy analysts to not to assume anything when it comes to the pace of political development in post-socialist states.

State failure brought on by rapid economic changes may be more of a threat to U.S. interests than regime survival, as a rapid collapse of the Revolution might just as easily set Cuba on Haiti's trajectory. In such a scenario, the waves of immigrants to South Florida would be overwhelming.

But there is also the question of how much demand there is for political change. Without reliable polling, it’s difficult to get an accurate sense of how deep the Cuban commitment is to the spirit of the revolution -- particularly among the young, the fault line for nearly all political shifts. The Christian Science Monitor’s recent series on Cuba -- which is worth taking time to read -- suggests that Cuba’s generation Y is restless, but not overtly political. Economic issues are much more pressing.

Regardless of the path ahead, spring break will eventually come to Cuba. The questions will be: how soon, and with what force. One thing is certain: as Senator Feingold has put it when talking about Cuba -- “democracy travels best in person.â€Â

Cuba and Latin America: A New Strategy


The Havana Note talks a lot about the need for a new policy towards Cuba. Fifty years of failure is a shameful, bi-partisan indictment of how policy is made in Washington. Luckily, as we have been and will continue to show, more people recognize that change is on the way. But change for change's sake is foolish, and could easily backfire on the United States.

Fortunately, the emerging consensus on changing Cuba policy happens to coincide with another consensus, here in Washington, that America needs a major overhaul of all our relations with Latin America -- and with the rising influence of Hispanic voters.

But both movements lack strategic coherence.

Today I want to propose some ideas on tying these two efforts together in light of the great strategic challenges facing the United States over the next 30-40 years.

Unlike the Cold War or World War II, when ideological foes bent on global aggression defined the central strategic challenges to the United States -- and when a policy of isolation against Cuba made sense -- I argue that the central challenge facing the United States today and for decades to come is the need to create the economic space for the entrance of up to 4.5 billion people into the formal sector of the global economy.

This challenge is presented in stark relief by China. By 2030, 700 million Chinese will leave the countryside and move into the cities, entering the formal sector of the global economy. This alone is the largest rural-urban migration the planet has ever encountered and in the short term it will put incredible global stress on energy, resources, and transportation while requiring new approaches to land use that we have never encountered.

But that same narrative is happening all over the developing world. Rural-urban migration is the dominant migratory pattern. And that migration is the driver bringing people into the formal sector of the global economy. It only follows that the challenge of economic inclusion in the 21st Century is the challenge of sustainability, for, limiting our options in a massive way are the twin constraints of climate change and ecosystem depletion.

Stewarding global patterns of energy and resource consumption, transportation and land use are are the key elements of any new American grand strategy. To the extent that the United States takes the lead in creating the technologies, the metropoli, the products, and the lifestyles of sustainability, strategic pre-eminence will flow once again to our shores.

Our national security strategy flows from this. Abroad America's purpose will be to create the infrastructure of sustainable global growth and in so doing, create the infrastructure of inclusion, prosperity, stability, and ultimately, political liberalism. As we do so, the great strategic liability of the United States in the current global order, our dependence on oil as a transportation fuel, will be mitigated. Our current account will have the best chance at balancing, and economic emigration will be minimized.

As we engage the world, however, we will need to approach the world as a collection of regional economies. Europe, China, India, Japan and the United States are all de jure or de facto regional economies. But the Middle East, the ASEAN bloc, Sub-Saharan Africa, and Russia/Central Asia must all focus on building regional economic engines generating domestic growth instead of exports of raw materials or manufactures.

This also goes for Latin America. As I have written earlier, Europe is pioneering a new kind of sustainability-driven relationship with its southern neighbors that I think should be a model for our own strategy. Integrating the Western Hemisphere's energy grid to support a broad portfolio of renewable sources, including wind, solar, hydro, geothermal, tidal, etc. would be the backbone. With reliable, clean energy, the United States must support the development of sustainable urban cities, based on the example of Curitiba, Brazil, not Rio and its crime-dominated favela slums. Sometimes this will mean supporting urban infrastructure, in some cases, bringing the informal, black market into the light.

Such a vision is closely resonant with where Latin America wants to go. The topic of the 5th OAS Summit Summit of the Americas -- scheduled for April 17-19, 2009 -- is “Securing Our Citizens’ Future by Promoting Human Prosperity, Energy Security and Environmental Sustainability." The recently concluded 2008 EU-Latin America Summit in Lima, Peru had the same primary theme: Sustainability and Inclusion.

The United States can pick this up and run with it. And we must. Until we demonstrate to the nations of Latin America that the United States has opened a new chapter, created a new regional doctrine that looks at the Western Hemisphere as part of a global strategy to steer the global economy between the scylla of economic inclusion and charybdis of ecological collapse, the United States is irrelevant to the long-term needs of the region.

Our relations with Cuba preclude any of this. Cuba policy represents the worst of American foreign policy: it is driven by single interest groups, uninformed by our short, medium, or long-term interests, and animated by an irrational sense of threat and a misguided approach to human security. Changing Cuba policy signals to our Latin American neighbors that we have changed. It must also signal that we recognize that top-down, neo-liberalism has failed, that, as the Nobel Laureate economist Amartya Sen wrote, development is freedom but that development in the 21st century must be sustainable and inclusive.

Ending the embargo and encouraging further Cuban economic reforms so that the Cuban people become role models in this new era, is of the highest priority. While Raul Castro's reforms are encouraging, the larger economic pattern speaks to Cuba becoming a strategic rentier economy, like Yugoslavia in the Cold War. Cuba is playing Lula off Chavez, Beijing off Moscow, all while the U.S. is still its fifth largest trade partner. That is a recipe for economic neglect and an end result more like Haiti than Chile. We cannot afford a failed state of 11 million people 90 miles off our coast.

Such outcomes are unnecessary. We know the road to human security and well-being in Latin America. It is fundamentally an economic pathway steered by a robust, populist, social democracy. The United States needs to embrace this and lead it.

The scale of the economic challenge ahead of us is greater than anything the planet has faced in the past. The struggle between business as usual and sustainability will be fought by the concentrated power of sovereign wealth on one side and the more diffuse but more pervasive price signals from market economies on the other. Cuba's full integration into a regional economy shifting rapidly toward sustainability is essential.

The best opportunity to move the ball forward is for the next president to address the Summit of the Americas in 2009, announce that he will end the embargo against Cuba and decisively support the region towards a sustainable and inclusive future.

Opening Cuba to U.S. Tourism -- Good for the Entire Caribbean?

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Photo Credit: Savvas Garovis

A New International Monetary Fund paper suggests it just might be.

The working paper, titled “Vacation Over: Implications for the Caribbean of Opening U.S.-Cuba tourism,â€Â is authored by Rafael Romeu. It can be found here.

Romeu projects that normalizing tourism relations between the U.S. and Cuba would lead to a 10% increase in overall travel to the Caribbean at large. The report states that the opening would lead to “seismic shiftâ€Â in tourism, with U.S. travel quickly out-pacing the Cuban tourism infrastructure, leading to a spill over of travel for other islands. Cuba currently receives 1.38 million tourists per year. The study estimates between 3 and 3.5 million U.S. tourists would travel to Cuba if restrictions were opened.
Small islands with strong European ties are most likely to gain, picking up European tourists that seek new destinations: Martinique, Montserrat, Antigua and Barbuda, Barbados are all projected to receive bumps.

But the study also has some clear losers.

The project’s third scenario -- which is based on a model where 2/3 of travelers select Cuba over a different location in the region and where 1/3 are deemed “new “ travelers -- projects a 23% decline in the number of travelers for the U.S. Virgin Islands, a 10-15% decline for Puerto Rico, Jamaica, Cancun, Bermuda, and a 17-20% decline for Anguilla, Aruaba, and the Bahamas.

Regional governments are already concerned, reflecting the growing understanding that U.S. Cuba policy is about to shift seismically. An interesting op-ed, by Miami Herald columnist Andres Oppenheimer, suggests that negative repercussions of possible travel opening may be the driving force behind Mexican efforts to cozy up with the Havana regime.

Rep. Lincoln Diaz-Balart Tries to Stop Little Leaguers’ Trip to Cuba

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Photo Credit: Jim Snapper

Yesterday Al Kamen had an interesting piece in the Washington Post, highlighting Congressman Lincoln Diaz-Balart’s (R-Fla.) outcry over a planned trip of Vermont and New Hampshire Little Leaguers to Cuba next month. Diaz-Balart, in conjunction with his work as a member of the “Cuba Democracy Caucus,â€Â is trying to undermine the trip. The Congressman hauled Bisa Williams, of the State Department’s Cuban Affairs office, and Barbara Hammerle, from the Office of Foreign Assets Control, to the hill to defend their granting of a travel licenses to the group.

One coach of the team -- John Carey, a Dartmouth College professor and Latin American expert -- said the process required three failed attempts and twenty months of work before travel restrictions were lifted. The trip has gotten some substantial attention, from Sports Illutrated among others, and group has also managed to secure strong political support, including Vermont Lieutenant Governor Dubie (R), Senator Patrick J. Leahy (D-Vt.), Senator Bernard Sanders (I-Vt.), Senator Judd Gregg (R-N.H.) Senator John E. Sununu (R-N.H.), and U.S. Representative Paul W. Hodes (D-N.H.) and Representative. Peter Welch (D-Vt.).

As of now, the travel ban remains lifted as the team prepares to head south.

Senator Leahy responded today in a small, Vermont paper saying Diaz-Balart should “Pick on someone his own size.â€Â Leahy added: "I don't like the idea of the government telling ordinary Americans, let alone Little Leaguers, where and when they can travel…If the president can go to China at taxpayers' expense, these kids ought to be able to go on a privately paid trip to Cuba to play some baseball."

Specter on Cuba: Change is on the Way

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Yesterday, speaking with reporters, Senator Arlen Specter (R-Pa.) said a) he is seeking a meeting with Raul Castro, b) he thinks formal relations with Cuba are around the corner, and c) knows that talking with world leaders leads to positive change because he's done it.

It is heartening to see a senior Republican Senator, the ranking member of the Judiciary Committee, recognize that our policy not only must change, but will be changing shortly. Senators Chris Dodd and Max Baucus should welcome Specter's initiatives and, I would argue, seek to join Sen. Specter in Havana.

There is little time to lose. The next president will be faced with few, if any, other issues that will deliver as much global and regional goodwill as changing our failed policy of regime change. I believe the next president would be best served by announcing a decisive change in policy in the inaugural address on January 20, 2009. Failing that, the OAS Summit in Trinidad in April would work as well.

That does not leave much time to get Congress organized. For real change to happen, Congress must hand control of Cuba policy back over to the White House by repealing Helms-Burton legislation. With Senator Specter's leadership on his side of the aisle and Sens. Dodd and Baucus on theirs, the Senate may just be able to move in time to take full strategic advantage of the moment.

I'll talk more about this in later posts, but I just have to juxtapose these statements from the senior senator from Pennsylvania with recent statements made by Senator Joe Lieberman. It is hard to understate the contrast.

While Sen. Specter sees the irrationality of our current policy and the necessity for change, Sen. Lieberman, this week, made good on his promise to seek clemency for a Cuban-American terrorist convicted of an eight-year string of bombing and assassination in New York City and Miami. According to his spokesman, Sen. Lieberman did what he promised, and delivered the petition to the Bush White House.

One Senator understands what is in the National Interest and the other has placed petty politics above homeland security, the rule of law, and the national interest.

Nixon on Cuba? Normalize

Well, that's what Nixon's last national security aide and current president of the Nixon Center, Dimitri K. Simes said yesterday here at the New America Foundation. It was a great event. For the full video and more, click here.

In 1994, with the end of the Cold War and with the end of Cuba's promotion of revolution and communism abroad, Richard Nixon wrote that the policy of isolation and embargo had failed and it was time for engagement:

''... hard as it may be to accept, our policy toward Cuba has failed and it is now time to change our focus from trying to destroy Cuba's government to helping its people.''

Washington has been a little slow on the uptake. A clear, rational calculation of the national interest has been trumped by domestic politics. Nixon was sick about it. Col. Lawrence Wilkerson (ret.) couldn't agree more and offered these words about the current state of Cuba policy 14 years after Nixon called for an end to the embargo.

Washington and Havana: Co-Dependent on the Embargo

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First of all, if you're in DC today, stop by our event today entitled "What Nixon Would Do on Cuba," featuring Dmitri Simes, Julia Sweig, Flynt Leverett and Col. Lawrence Wilkerson.

Now for my post. Last week we showed in living color the continued dysfunction of Washington's dependence on the Embargo as a source of electoral votes.

This past weekend, however, it was Raul Castro's turn to lean on the embargo for political expediency. The occasion was the annual speech at Moncada Barracks, the site of one of the defining battles of the Castro brothers' insurgency. First, he implicitly admits that the embargo is not in any way isolating the island from the global economy, then he raises the spectre of the Imperial enemy to the north to justify unnecessary military spending.

Here's what Raul said:

We must bear in mind that we are living in the midst of a true world crisis which is not only economic but also associated to climate change, the irrational use of energy and a great number of other problems....

I repeat that the revolution has done and will continue to do anything within its power to continue to advance and to reduce to the minimum the unavoidable consequences of the present international crisis for our people. Yet, we should timely explain to our people the difficulties so that we can be better prepared to face them. We must get used to receiving not only good news.

Cuba, in other words, is fully integrated into the global economy. If it were isolated, Raul would not need to set such low expectations for his people. Indeed, according to the Cuban government, the U.S. is even the country's fifth largest trading partner, behind Venezuela, China, Spain, and Germany. Tourism is up 14.8 percent over last year. Yet the economy is in a shambles. Agriculture is a wreck and they are importing billions in produce. Global integration plus poor economic management is a disaster waiting to happen.

What then, is the rationale for keeping our embargo up? Many pro-embargo activists will state that lifting the embargo will only enrich the regime, which controls trade through a very small number of state-owned enterprises. But those enterprises and their bosses already have access to the other 75% of the world's economy and Raul is warning of disaster.

I argue that the embargo is more useful to Havana than to the Washington. Havana, unaffected by the sanctions, uses the blockade as an excuse to maintain a outsize military and to ramp up nationalism. It is an essential crutch for a Revolution that cannot find a modern, progressive pathway.

So it is no surprise that this is exactly how Raul finished his oratory:

And together with production, we shall continue paying special attention to defense, regardless of the results of the next presidential elections in the United States.

The country is doing well in its defense preparation. On November 2007 we conducted with satisfactory results the Moncada military exercise in the west and center parts of the island. This was done in the eastern territory last June since the decision had been made to postpone it to avoid interfering with the work of recuperation after the intense rainfall at the end of last year.

On the other hand, Operation Caguairán continues to favorably develop; this has enabled us to significantly raise the preparation of our reservists, who complement the regular troops, and of our militia.

At the same time, we have continued the engineering fitting-out of the military theater of operations and the modernization of the weapons and other means as well as the training and upgrading of officers. This year over 2,000 officers graduated; the highest figure in the last ten years.

Simultaneously, conditions are being created to perform with excellence and rigor, in the month of November, the Bastion 2008 Strategic Military Exercise.

What a waste of time and resources.