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.

Lieberman To Seek Pardon for Manhattan Terrorist

Cozying up to Cuban-American extremists in South Florida has been a part of American political culture for decades. It is an unseemly ritual that has nevertheless persisted because of the dysfunctional peculiarities of our Electoral College that grants Florida 27 votes, exactly 10 percent of the electors needed to win the White House.

Most of the time, would-be candidates simply suspend some abstract principles about the putting the National Interest above the narrow interest of a vocal and well-moneyed minority.

Senator Joe Lieberman, however, has taken it to the next level.

Thanks to the sleuthing of avid Cuba-watcher Phil Peters over at Cuban Triangle, and a bit more digging here at The Havana Note, we can now state the following:

1. Before addressing a pro-McCain event in Florida on July 20, 2008, Senator Joe Lieberman was recorded on video telling Miriam Arocena, wife of Eduardo Arocena, the Federally-convicted leader of the Cuban-American terrorist group Omega 7, that he will carry back to Washington her request for a Presidential pardon for her husband. Arocena is serving a mandatory life sentence and was convicted on 25 Federal counts in New York and 24 counts in New York.

Lieberman said:

"It's my responsibility, it's my responsibility. I will carry it [the pardon request] back. I will carry it back. Yeah. I feel...I think of you like you were my family.... I'll bring it back. I'll do my best."

Here's the video. Lieberman's quote starts around 3:30.


2. The terrorist campaign for which Arocena was convicted did not target the island of Cuba. Rather, it took place in and around New York City and Miami, Florida. Appeals Court Judge Lumbard summarized Omega 7's string of terror attacks like this:

“From 1975 to 1982, Omega 7 conducted a series of bombings in the New York metropolitan area that injured bystanders and damaged homes, businesses, and a church. The bombsites included Avery Fisher Hall, Madison Square Garden, JFK Airport, the ticket office of Aeroflot (the Soviet airline), and the Cuban Mission to the United Nations."

Much of the operational activity of Cuban-American terrorist groups has been planned in South Florida and directed at the island of Cuba itself. Arocena's Omega 7 group, however, was different. It perpetrated an eight-year-long spree of violence that was planned in Newark, New Jersey and Miami, Florida, and took place here in the United States against public and private targets across the New York and Dade County metro areas.

This was such a big deal, that according to former Assistant U.S. Attorney Mary Jo White, in 1980, New York City's Joint Terrorism Task Force was formed specifically in response to the unsolved bombings conducted by Omega 7 and other terrorist organizations.

Senator Lieberman is the junior Senator from Connecticut and the chairman of the Senate Homeland Security and Governmental Affairs Committee. That he would be siding with a convicted terrorist is bad enough. That he would be advocating the release of a man who led a bombing spree across Manhattan, where many of his constituents work, and in Miami, is simply incredible. That he is doing so while serving as chairman of the Homeland Security Committee, is unacceptable.

In the New York Times story appearing after Arocena's conviction in Federal court, Assistant U.S. Attorney Michael Tabak, the lead prosecutor in the Arocena case, said hatred of Cuban Communism ''does not justify murders and bombings in the United States.''

The Second Circuit Court of Appeals concurred in 1985:

Overall, the Government's case against Eduardo Arocena was overwhelming and impressive. Arocena's interviews with FBI agents and his lengthy taped conversations with Agent Wack, combined with the copious physical evidence against him and the testimony of eighty-five witnesses, piece together the details of a terrorist campaign shocking in its ferocity and persistence.

Unfortunately, it seems that Senator Lieberman disagrees.

What Would Nixon Do on U.S.-Cuba Relations?

This event just in from my day job over at the New America Foundation:

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Thirty-seven years after Nixon went to China, the next President of the United States has another chance to split a non-threatening communist state away from an aggressive socialist power. Then, like now, there is an opportunity to really change the perception of the United States in the world and shift the conversation.

This event is co-hosted by the New America Foundation and The Nixon Center.

To register for this event, click here.

Start: 07/28/2008 - 12:30pm
End: 07/28/2008 - 2:00pm

New America Foundation
1630 Connecticut Ave, NW 7th Floor
Washington, 20009

Featured speakers

Dimitri K. Simes
President, The Nixon Center
Former Foreign Policy Advisor to Richard Nixon

Flynt Leverett
Senior Fellow, Director, Geopolitics of Energy Initiative, New America Foundation
Former Senior Director for Middle East Affairs, National Security Council

Julia E. Sweig
Rockefeller Senior Fellow & Director Latin America Studies
Council on Foreign Relations

Col. Lawrence Wilkerson (ret.)
Former Chief of Staff, Department of State
Pamela C. Harriman Professor, College of William & Mary

Moderator

Steve Clemons
Director New America Foundation/American Strategy Program
Publisher, www.TheWashingtonNote.com

Venezuela, Miss Universe and Julia Sweig

Next week, we'll be holding a fascinating event on what Richard Nixon would do on Cuba. I'll post the full description tomorrow.

I mention this, because one of the speakers will be Julia Sweig who was just on the Colbert Report talking about the intersection of Miss Universe and Hugo Chavez. Hillarious.

Idle Cuban Resources

So, today's news out of Havana is that Raul Castro has announced another economic reform: idle state land can now be granted to private farmers or collectives for agricultural production. Here's the story from the BBC and another take from my colleague Phil Peters.

It's another incremental reform that is becoming the Raul era's hallmark. Add them all up, and there is a change going on, but the economy is still not on a good trajectory. Taxis? Cell phones? Hotel rooms? The big one so far really is pegging wages to productivity, but even that is still set by the government, not by a more agile market mechanism.

Contrast that with the real, massive innovation coming out of Cuba, in health care. At home Cuba boasts an incredibly comprehensive and accessible community-based health care system. Abroad, Cuba is exporting both the community-based approach and the doctors and trained medical personnel to make it work for low-income countries. That's revolutionary.

As I've written recently, I think Cuba has a chance to be a real role model for Latin America, as the region tries to figure out how to survive the coming global economic transition from high waste to high efficiency. Indeed, Vice President Machado recently called for much faster changes in this area at the Global Food Crisis Summit in Rome last month.

Global dysfunction is no excuse not to move faster at home. U.S. policy, however, is the dominant reason Cuba cites for not moving faster.

Let's say the U.S. lifts our embargo and guarantees not to invade Cuba. If Cuba were then to reduce its military spending down to British levels, 2.4% of GDP, it would have $715 million extra per year to spend on the next big Cuban revolution. If the Cuban Government were smart, that $715 million could be a down payment for an island-wide renaissance. I'd spend it on a major, national, participatory economic re-development plan.

This would be, in essence, a second, deeper round of his economic dialogues. This time, however, the objective would be to unleash the Cuban economic tiger. South Korea, China and Vietnam have navigated these same waters successfully, but in the context of much more favorable global and domestic economic conditions.

How can Cuba open up private enterprise while regulating markets to ensure social equity? Allow wages to incentivize performance and innovation while maintaining a just and livable minimum wage? Re-develop Cuban cities, towns, and resort communities using the principles of participatory smart growth--making sure communities are developed to fit the needs and aspirations of the community--not the central government? Use progressive taxes on this new economic activity to pay for a new generation of mobility and energy infrastructure? Make Cuban universities and research organizations the envy of Latin America, working on real problems encountered in the second Cuban revolution?

I know it sounds fanciful, given the anachronistic mode in which Havana debates policy. But Raul himself says all reforms must respect Cuban socialism yet Raul just this week re-defined the concept:

Socialism means social justice and equality but equality of rights and opportunities, not salaries. Equality does not mean egalitarism. This is, in the end, another form of exploitation, that of the exploitation of the responsible worker by the one who is not, or even worse, by the slothful.

Raul understands that the economy has to change, but he does not yet seem to have a vision for the next era of the revolution. Regardless, economic change has to come faster than Raul is presently orchestrating. With global commodity prices, as Raul himself noted, threatening his economic reforms, Cuba needs more innovation, not less.

As I wrote yesterday, we have have a real strategic interest in getting Cuba on our side. To do that, we should be having these kinds of blue-sky conversations with the Cuban leadership. We won't until the next president changes our failed policy.

Cuba and the Great Game

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There is a great game playing out in Latin America and the United States is sitting on the sidelines. On one side is Venezuela's Chavez, Bolivia's Morales, and Ecuador' Correa. On the other is Brazil's Lula, Colombia's Uribe, and Mexico's Calderon. The game is, at its heart, about the future of Latin America and its role in the world. But the road to decisive regional influence leads through Cuba and the U.S. embargo is tying Washington's hands.

Cuba is, essentially, up for grabs. Both sides in this contest are wooing the island nation of 11 million people with economic packages. Chavez continues to sweeten his grand barter of oil for doctors with deals like today's oil refinery announcement and internet access deals.

For now, the Andean Axis is being balanced, serviceably, by Lula's billion dollar trip in February, and Calderon's warming of relations with Havana. Uribe, of course, is balancing the Bolivarian surge by his own more effective FARC counterinsurgency.

Like Yugoslavia in the Cold War, Cuba does not have to choose sides and may be able to continue playing both sides off each other in an effort to diversify its aid portfolio in anticipation of continued and expanded Chinese interest in the island nation and its mineral resources. As long as Chavez needs the doctors and nurses of the Cuban medical corps to deliver his social program, Chavez will have ability to use the oil weapon against Havana.

America has a real interest in the outcome of this contest. At present, more than 30% of U.S. oil imports come from Latin America. U.S. exports to this region are almost five times what we send to China. How these emerging markets evolve will have a large impact on U.S. economic health. Combined with 15% of Americans being of Latino ancestry, Congress should be more and more up in arms about a policy that is emperiling the region.

In the long-term, however, we need Latin America aligned with the United States in the coming contest of economic visions. China is in the midst of the largest urbanization program ever undertaken and to succeed it will need all the natural resources Latin America can exploit. Left alone, a business as usual urbanization scenario will, as McKinsey says, put unprecedented stress on global energy and resource commodities. I think it could crash the system.

The United States is the only country that can effectively re-direct China's growth path toward sustainability, but only if we commit to it in a grand strategy supported by the great majority of the international community. Latin America has to be part of that alliance and, even more important it will have to put its own, sustainable economic growth ahead of exports.

Given the track record of the region, however, it seems likely that Latin American countries, lacking a clear pathway to sustainable growth, will take the commodity cash and fork over their patrimony. That, of course, is a recipe for more of the resource curse, more economic refugees, and more immigration problems here.

Cuba is pivotal. It has the regional respect and the education and scientific capacity to be a powerful role model. It could, as I wrote before, take bold steps to leap frog to the next economy. It could align with Brazil and Mexico and end the dalliance with authoritarian socialism. But if Havana is stuck in Yugoslavia mode, surviving not though economic vitality but through taking strategic rents, as it is today, or if Cuba reverts back to its revolutionary glory days and subordinates itself to Chavez, China will be able to continue its ravenous commodity extraction of the region.

Let's hope the next President of the United States understands just what is at stake and makes Cuba more than just a South Florida thing.