Cuba: Sticking to the Plan

By Fulton Armstrong

Miguel Diaz Canel

Cuban President Miguel Díaz-Canel. / Irene Pérez / Cubadebate / Flickr / Creative Commons

As Cuban President Miguel Díaz-Canel passed the six-month mark in office this month, his administration – not surprisingly – continued to produce no surprises.  His rhetoric and policies, similar to the package of constitutional reforms now undergoing consulta popular and scheduled to be approved by referendum next February, are an extension of Raúl Castro’s tightrope walk between continuity and gradual change.

  • Speaking at the UN General Assembly in September, Díaz-Canel condemned the “selfishness and exclusion” of capitalism as the cause of poverty, instability, climate change, and other ills. He also proclaimed, “The generational change in [Cuba’s] government should not deceive the enemies of the revolution; we are continuity, not rupture.”  He welcomed the almost-friendless Venezuelan President Nicolás Maduro to join one of his biggest public appearances.  Showing his pragmatic side, however, Díaz-Canel also met in New York with U.S. technology companies and icons of U.S. capitalism – Google, Bloomberg, Microsoft, Twitter, and others – declared his hope to “computerize [Cuban] society,” and welcomed the announcement of the first U.S.-Cuban biotech joint venture.  Upon his return to Havana, he launched his own Twitter account.
  • On economic reform, Díaz-Canel has continued the same halting approach toward market socialism as did Raúl. New regulations announced in July, to be implemented in December, seemed designed to restrain the growth of the private sector rather than accelerate the reform program.  New mechanisms to ensure that cuentapropistas pay more taxes and operate within the law will dampen their growth in the short term and aggravate contradictions in current policies – for example, curbing black-market purchases of supplies without creating wholesale markets for them.

Ongoing national discussions on constitutional reforms, launched by the National Assembly in July, are compatible with Díaz-Canel’s approach to change.

  • The new document reaffirms two tenets of the Communist Party’s revolutionary platform – the party’s continued leading role as sole political representative of the Cuban nation, and a commitment to a socialist system in which state property predominates and universal social services remain free. But, importantly, the draft omits the goal in the 1976 constitution of “building a Communist society,” signaling the leadership’s recognition that private property and markets will be a permanent feature of the new Cuban model.  It reconfigures policymaking processes to increase efficiency (such as by formalizing the position of Prime Minister), increases the autonomy of local government, and separates more clearly executive and legislative functions.  An amendment allowing same-sex marriage has sparked heated public debate and given rise to an unprecedented political organizing drive by churches opposed to it.
  • The amended constitution does not significantly expand the space for private enterprise, but it provides a stronger legal foundation for the reforms that have already been implemented in various waves since 1992. The draft also strengthens protections of Cuban and foreign-owned private property and investment, providing guarantees against future expropriation.

When introducing changes over the years, the government has routinely, if not obsessively, emphasized continuity – and Díaz-Canel’s administration is proving to be no different.  The signs of change are often nuanced, whereas hardline positions, which tamp down progressives’ expectations and assuage conservatives’ anxieties, are unmistakable.  Díaz-Canel’s adherence to Raúl’s program gives him both essential political cover emphasizing continuity as well as a platform for continuing gradual change.  That formula doesn’t help him with some major challenges, such as the need to unify the country’s two currencies, that have loomed large for several years.  But Díaz-Canel’s gradualist approach – particularly if enshrined in a new constitution next year – is compatible with the view held by many Cubans that change should be evolutionary, not disruptive, even if they wish it went faster.  Washington’s curtailment of bilateral normalization is depriving the private sector of much-needed resources to drive change, but the country’s continued international outreach and expansion of internet access have given entrepreneurs a moral, if not economic, lifeline.  Cubans have often said they’ll do change “their own way,” and Díaz-Canel, with his abundance of caution, may be leading that process. 

October 31, 2018

U.S.-Cuba: How to Stop the Backslide in Relations

By William M. LeoGrande*

Raúl Castro sits at a table with two men.

Cuban President Raúl Castro. / Wikimedia / Creative Commons

Relations between the United States and Cuba are on a downward spiral due to the mysterious injuries suffered by staff at the U.S. embassy in Havana last year, and there is no clear escape path from the vicious circle of recriminations that have damaged the interests of both countries.  Washington’s initial response to the reported injuries a little over a year ago was to work quietly behind the scenes with Cuban authorities, even arranging visits by the FBI to Cuba.  However, once the story went public, calling the injuries “sonic attacks,” the Trump Administration bowed to pressure from Cuban-American legislators – Florida Republican Senator Marco Rubio foremost among them – to impose sanctions on Havana.  Secretary of State Rex Tillerson in late September issued an “ordered departure,” pulling most U.S. diplomats and family out of Havana and closing the consular section.  Days later, he expelled an equal number of Cubans, including their embassy’s consular staff and entire commercial section.  Soon after, Washington issued a travel warning that “we believe U.S. citizens may also be at risk and warn them not to travel to Cuba.”

  • The most recent blow to relations came on March 2, when the State Department announced that the staffing cutbacks would be permanent. Although it has been six months since the last recorded injury, Tillerson refuses to return U.S. diplomats to Havana until the mystery is solved or Cuba provides “credible assurances” that whatever happened will not happen again, but he has not said what assurances would count as credible.  Going forward, the U.S. diplomatic presence in Cuba will be weaker than at any time since former President Jimmy Carter opened the U.S. Interests Section in 1977.  With these actions, Cuban officials have begun to see the whole acoustic episode as an excuse manufactured by the Trump Administration to reverse President Obama’s normalization policy.

The absence of diplomatic boots on the ground means fewer cultural, educational, and business exchanges; slower progress on issues of mutual interest; less help for U.S. visitors who need consular services; and new hardships for Cubans seeking to emigrate to the United States, who now have to travel abroad to get a visa.  The travel warning has already reduced the number of U.S. visitors, hurting the owners of private rental homes (casas particulares) and restaurants (paladares).  U.S. study abroad programs have been hit hardest because many universities prohibit sending students to a country under a warning.  Neither government has suspended technical talks on issues of mutual interest like counter-narcotics and safe and orderly migration, but the State Department’s refusal to meet in Havana is certain to test Cubans’ patience.

As the last incident recedes in time, the chances of solving the mystery recede with it, which does not bode well for U.S.-Cuban relations.  Next month, Raúl Castro, the principal patron of normalization on the Cuban side, will retire from the presidency, raising the question whether his successor will persist in trying to improve relations when there appears to be so little interest in Washington.  Both U.S. and Cuban diplomats seem sincere about finding a way out of this impasse, get their embassies back up to full strength, and resume the dialogues that were underway, but this is a “permanent” reduction in staff without laying out the conditions – such as a particular period of time without new incidents or enhanced security measures – for restoring personnel.  The longer the two embassies operate with skeletal staff, the more damage will be done to the broad range of issues of mutual interest the two countries share.  Without an operating consulate, moreover, the United States will likely fail to meet its commitment – rooted in a 1994 agreement maintained by Presidents from both parties – to issue 20,000 immigrant visas to Cubans each year.  The United States and Cuba made surprisingly fast diplomatic progress in the last two years of the Obama Administration, signing two dozen bilateral agreements and dramatically expanding trade and travel.  Ending the Cold War in the Caribbean was overwhelmingly popular among ordinary citizens in both countries.  The current freeze in relations puts those gains at risk, giving both governments good reason to re-double their efforts to find a way out.

March 13, 2018

* William M. LeoGrande is Professor of Government at American University.  This article is an adaptation of his analysis that appeared in Americas Quarterly on March 6.

Cuba: Trump Actions Strengthening Hardliners

By Fulton Armstrong and William M. LeoGrande

Two buildings in a composite photo

On the left, the U.S. Embassy in Havana; on the right, the Cuban Embassy in D.C. / U.S. Government Accountability Office / Flickr / Creative Commons

As the end of Raúl Castro’s presidency approaches, Trump Administration actions halting, if not reversing, the process of normalizing relations with Cuba have tilted debate in Havana in favor of hardliners trying to keep the brakes on economic reform and on constructive relations with Washington.

  • In retaliation for alleged “sonic attacks” against U.S. diplomats in Havana, Secretary of State Rex Tillerson’s ordered departure of staff from the U.S. Embassy in Havana, the closure of the U.S. consulate, and the expulsion of Cuban consular and commercial staff in Washington –has put a chill on bilateral relations that ratifies Havana hardliners’ contention that Washington cannot be trusted. By halting the issuance of visas to Cubans in Havana, the Trump Administration will almost certainly violate the 1994 migration accord committing the United States to issue at least 20,000 immigrant visas to Cubans annually.  That would rupture the longstanding bipartisan consensus in Washington that bilateral cooperation on migration serves an important U.S. interest in safe and orderly migration.
  • The State Department’s unwillingness to share meaningful information on the U.S. diplomats’ mysterious symptoms – underscored by the Embassy’s refusal to use a hotline established for Cuba to investigate alleged attacks real-time – has frustrated pro-normalization Cubans, who face conservatives’ claims that Washington is cynically exploiting the incident to embarrass Cuba and return to a policy of hostility and regime change.
  • Other Trump measures reinforce Cuban conservatives’ efforts to limit the growth of the country’s nascent private sector, particularly entrepreneurs who profit from U.S. visitors and need easy travel to import inputs from the United States. A travel warning issued in conjunction with the withdrawal of U.S. diplomats is causing a sharp drop in U.S. travelers, and new regulations abolishing individual people-to-people educational travel are channeling people into large hotels, away from private bed and breakfast rentals.  A prohibition on doing business with companies and hotels allegedly linked to the Cuban military is not pushing new clients to cuentapropistas’ businesses but instead is discouraging travel and commerce in general.  Cuban reformers are further dispirited by the perception that Washington is shifting back to the erroneous view that it can promote regime collapse by tightening the economic screws on the government, thereby reinforcing a siege mentality among senior leaders and discouraging needed economic reforms as too risky in the current environment.
  • Trump’s actions have so closely dovetailed with the agenda of Cuban hardliners that some people speculate it was opponents of reform inside the Cuban government who perpetrated the mysterious “sonic attacks” to provoke a confrontation with Washington. But there is no evidence whatsoever in support of that theory, and for anyone to sabotage Raúl Castro’s opening to Washington – one of the signal achievements of his presidency – would be to commit political (if not literal) suicide.

Implementation of Raúl Castro’s road map for economic change, embodied in the 311 lineamientos approved in 2011 and the Conceptualización of Cuba’s socialist model approved by the Communist Party congress last year, had already slowed before Trump’s sanctions due to Cuban concerns about growing income inequality during a period of poor economic performance, uncertainty about energy imports, and perhaps the 86-year-old president’s own level of energy and state of mind after the passing of his two brothers (Ramón and Fidel both died in 2016).  Widely discussed political reforms, such as the Electoral Law and the Law on Associations, that were expected months ago have yet to be unveiled.  The Trump Administration’s efforts to expedite regime change by curtailing financial flows to the government and by promoting private sector growth at the expense of state enterprises make it easy for Cuban hardliners to rally support for slowing reforms.  Ever since he launched the reform process in 2011, Castro has insisted it would move ahead, “Without haste, but without pause.”  Lately, in part because of the Trump Administration’s actions, there’s a lot more “pause” than “haste.”

The election of First Vice President Miguel Díaz-Canel to succeed Raúl as president seems to be a foregone conclusion of the ongoing multi-tiered election process that culminates in February, but no one outside the two men’s inner circle seems to know how or when next steps on reforms will be sequenced.  Raúl’s focus has been on creating processes and institutions for governing after he steps down, rather than achieving particular results between now and the formalities confirming Díaz-Canel.  One thing that is near-certain, however, is that the successor’s legitimacy will be determined by performance, not his surname or soaring oratory.  Tackling the really big reforms that loom ahead, such as currency and exchange rate unification, will require political will from a relatively unified leadership.  Cuba has long been adept at dealing with U.S. sanctions and pressure, so Trump’s policies are more an irritant than a threat, but the effect they have in Havana is to slow the implementation of changes that would improve the standard of living of ordinary citizens and to reduce the willingness of Cuba’s leaders to engage with Washington in ways that would serve the interests of both countries.

 December 18, 2017

U.S.-Cuba: New Challenge to Normalization

By Fulton Armstrong

Tillerson US embassy in Cuba

U.S. Secretary of State Rex Tillerson addresses State Department employees. / U.S. Embassy in Cuba / Creative Commons

The Trump Administration’s decision to sharply reduce staff at the U.S. embassy in Havana and to warn U.S. travelers to avoid travel to Cuba is a major blow to U.S.-Cuba normalization – and a sign that Washington’s policy is once again dictated by politics rather than reality.  Announcing the measures, Secretary of State Rex Tillerson last Friday admitted that “investigators have been unable to determine who is responsible or what is causing these attacks,” but he still said that more than half of U.S. diplomats will be withdrawn “until the Government of Cuba can ensure [their] safety.”  Washington is also suspending the processing of tens of thousands of visas for Cubans seeking to visit or migrate to the United States.  Most travel to the island by U.S. officials will also cease; bilateral meetings will continue only in U.S. territory.

  • As the State Department itself has admitted, the “sonic attacks” – which have not been proven to be either sonic or attacks – remain a total mystery. No agency of the U.S. or Cuban governments is aware of a technology that fits the victims’ description of what they experienced, and non-government scientists have been equally puzzled.  Doctors analyzing the victims’ symptoms (headaches, hearing loss, memory loss, confusion) do not see a common cause.  Moreover, no one has been able to ascertain that the incidents amount to deliberate, premeditated attacks.  No one has produced any evidence to support speculation that “rogue” elements of the Cuban government or a third country even possess, let alone have used these unknown technologies.  President Trump said on Friday, “Some very bad things happened in Cuba.  They did some bad things” – without saying who “they” are.
  • Leaks over the weekend that the diplomats suffering the worst symptoms have been U.S. intelligence officers seem intended to rationalize allegations of targeted attacks. But the Associated Press, which reported the leaks and other key aspects of the story, noted with irony: “Almost nothing about what has transpired in Havana is perfectly clear.  But this is Cuba.”

Even though none of the more than 600,000 U.S. travelers to the island each year has reported any of the symptoms experienced by the U.S. diplomats, Washington also issued a statement that “warns U.S. citizens not to travel to Cuba.”  The State Department has provided no evidence that visitors are in danger.  Travel warnings are a powerful political signal of low confidence in host governments and can have a huge impact on local businesses – including many thousands in Cuba’s nascent private sector.

The Administration deserves credit for resisting the temptation to blame the Cubans for the attacks, but it fell prey to its own mindset about “sonic attacks” and – under political pressure –got stuck reacting to an incredible scenario with a counterproductive set of measures.  While the State Department was right to admit its ignorance, a handful of legislators in Washington – a small group that had forcefully opposed normalization all along – filled the information void and corralled Tillerson into a policy prescription that undoes mainstays of the bilateral relationship, including visas, reciprocal meetings in each capital, and other cooperation that requires a robust presence in Havana.  By trying to scare away travelers, moreover, Tillerson threatens to take crucial business away from private entrepreneurs.

  •  The scope of the Administration’s measures – including discouraging non-governmental travel – contradict the leaks suggesting that the incidents are part of a spy war between the two countries. A full epidemiological study about everything the victims had in common – food, drink, habits, and workspaces within the embassy building itself – conducted months ago, when evidence and memories were fresh, would have helped inform these decisions.  To accuse Cuba now, almost a year after the first incident, of failing to meet Vienna Convention obligations to protect diplomats rings hollow since the United States has accepted the sincerity of Havana’s efforts – from President Raúl Castro down to the working-level experts – to resolve the mystery and address its causes.  Having achieved the practical shutdown of the U.S. Embassy in Havana, opponents of normalization are now demanding total closure of Cuba’s embassy in Washington.  Politics is once again in danger of becoming the main driver of U.S.-Cuba bilateral relations.

October 2, 2017

Cuba: Attacks Against U.S. Diplomats?

By William M. LeoGrande*

19734869263_7c3351e2bd_b

The U.S. Embassy in Havana. / Melanie K. Reed / Flickr / Creative Commons

The details about alleged sonic attacks against U.S. and Canadian diplomats in Havana in fall 2016 remain shrouded in secrecy and uncertainty, but the incidents – whatever they were – could cause further disruptions in U.S.-Cuban relations, already on shaky ground after President Trump’s June 16 declaration that he was “canceling” President Obama’s policy of normalization.  The State Department has admitted that after more than eight months of investigation, it “can’t blame any one individual or country” for the reported impairment of U.S. diplomats’ health.  Although press reports indicate the victims suffered hearing loss and headaches from exposure to something in or near their residences, the State Department has provided few details about their symptoms, the number of officers involved, their positions, or their prognoses.  The department’s spokesperson said last week that “we still are trying to … determine the actual cause of their situation … The investigation is ongoing.”  Nonetheless, in May the Trump Administration expelled two diplomats working at the Cuban Embassy in Washington because, according to the spokesperson, Havana is “responsible for the safety and security of our diplomats,” – a responsibility it failed to meet.

  • Speculation about what happened is rampant, but lacks evidence. The State Department’s reference to “any one individual or country” and the Cuban Foreign Ministry’s unequivocal statement that it “has never, nor would it ever, allow that the Cuban territory be used for any action against accredited diplomatic agents or their families, without exception” have fueled speculation that a third country may have staged the attacks.  Russia is a favorite suspect, with China a distant second, but conspiracy theorists cannot explain how a third country could conduct such sensitive operations in an environment like Havana where foreign diplomats – especially U.S. diplomats – are under constant surveillance.
  • Speculation that this was a Cuban “attack” intended to injure the diplomats does not make sense, either. U.S. diplomats in Havana have faced petty harassment over the years, but even when relations were at their worst, there was never an attempt to inflict physical harm.  Moreover, the incidents happened at a time when U.S.-Cuban relations were improving and most people expected normalization to continue under President Hillary Clinton.  Neither is it clear why Canadians would be a target.  The U.S. and other militaries have developed low- and high-frequency weapons that cause hearing loss, headaches, and even incapacitation on the battlefield and in crowd-control situations.  But if such a weapon was the cause of the symptoms U.S. diplomats experienced, presumably it would be immediately recognizable.

A popular explanation is that the injuries were an unintended side-effect of a surveillance operation gone wrong.  Without information about symptoms and operating conditions, however, the technology is difficult to fathom.  Lasers, microwaves, and sound waves have long been used for stand-off eavesdropping operations, but primarily against targets in locations to which the attacker has no access, which is not the case with diplomatic residences in Havana.  Moreover, U.S. Embassy regulations strictly forbid having sensitive conversations outside the chancery, so Cuban security services would have little motivation to invest in the expensive equipment and real-time monitoring necessary to target residences.  In short, none of the extant explanations fit very well with the few facts known at this point.

The impact of the alleged attacks and U.S. retaliation on the bilateral relationship has been minimal so far.  Senior diplomats on both sides seem reluctant to allow the incidents to put a brake on improvements in areas of mutual interest.  The fact that both countries agreed to keep the alleged attacks and the expulsion of Cuban diplomats quiet suggests neither wanted the issue to get out of hand.  President Trump’s June 16 announcement tightening regulations on U.S. trade and travel to the island gave no hint of a crisis over an issue as fundamental as diplomats’ safety, and left the door open to continuing dialogue on issues of mutual interest.  President Raúl Castro has criticized Trump’s new policies but, as recently as mid-July, repeated his willingness to work with Washington on a host of issues within the context of respect and mutual benefit.  However, until all the facts are known and responsibility for the incidents is definitively established, the Cuban-American right will continue to stoke speculation about Cuban villainy in hopes of derailing the bilateral cooperation still underway.

August 14, 2017

*William M. LeoGrande is Professor of Government at American University in Washington, DC, and co-author with Peter Kornbluh of Back Channel to Cuba: The Hidden History of Negotiations between Washington and Havana (University of North Carolina Press, 2015).

Implications of Fidel’s Passing

By Fulton Armstrong

KODAK Digital Still Camera

As a tribute to Fidel Castro, flowers and posters adorn the gates outside the Cuban Embassy in Buenos Aires. / Gastón Cuello / Wikimedia / Creative Commons

The death of Fidel Castro last Friday night has drawn largely predictable reactions from largely predictable quarters, but the analysis of the meaning of the comandante’s passing that matters most belongs to the Cuban people.  History may ultimately absolve Fidel of his most egregious excesses and errors over the last six decades, but Cubans are the ones who will decide which parts of his revolution to keep – and which to reject or allow to fade away.  By all accounts, Cubans want to preserve some of the gains of the revolution, including their sense of national dignity and some social benefits, while seeking a vastly improved living standard.  But no one can claim to know exactly what “the people” want – and how they want to achieve it.

  • The economic reforms that President Raúl Castro launched years ago have been halting and hampered by policy contradictions and bureaucratic obstacles rooted in elites’ fears of losing political control. Processes like the 7th Party Congress’ Conceptualización have been so muted as to undermine change and breed cynicism among the population.  Raúl and his team have a roadmap that, while as unorthodox as ever, will move the economy in the right direction.  Fidel’s departure is a signal that the old-timers, perennially blamed for slowing change, represent an eventually diminished threat.  The next generation of Party leaders knows full well that their legitimacy is going to have to come from concrete results, especially improving living standards, and it needs to move ahead with the hundreds of lineamientos, laws and regulations that have already been approved.  It’s their own plan, and the excuses for non-implementation of at least the easier measures are getting thin.  Major reforms such as unifying exchange rates will be a big challenge, as for any country, but the new team at some time will have to bite the bullet.
  • On the political side, Raúl lags even farther behind. Fidel’s passing puts a lot of pressure on him to flesh out his plan to step down as President in 15 months (a commitment that so far seems solid).  Some of Raúl’s actions indicate a desire to build institutions, perhaps even the National Assembly as it moves back into the Capitolio this month; improve decision-making processes; and reduce party intervention in day-to-day matters.  But his handover of power to a new generation won’t work if his policy team stays in the shadows forever.  His vision entails them learning how to do politics among themselves and, increasingly, with the Cuban people – which implicitly entails respect for the plurality of legitimate views across Cuban society.  The Cuban people have shown they’ll not form lynch mobs the moment political space opens up.

Cubans can find support for their evolutionary change in every corner of our Americas, except perhaps one.  Reactions throughout Latin America and the Caribbean differed in tone and effusiveness, but they uniformly showed respect for the deceased comandante and support for the Cuban people.  Regional leaders called him a “giant in history” and “a leader for dignity and social justice in Cuba as well as Latin America” and the like, while one merely tweeted “condolences to the Cuban government” and had staff explain he’d miss the funeral because the logistics of flying to Cuba were “not easy.”  But the region’s best wishes for Cubans to find a stable path from a Castro-dominated past into the future that they collectively – in the Party and “the people” – wish to find were strong.

The outlier is, again, the United States.  President Obama and Secretary Kerry’s messages were statesmanlike and consistent with Washington’s sensitivity toward any country in mourning even if it has different interests and values.  President-elect Trump took a different approach.  His condolence statement focused on issues from the past and his affiliation with combatants from the Bay of Pigs invasion who tried to oust Castro in 1961 and endorsed his own candidacy last month.  He tweeted that he will “terminate the deal” of normalization if Cuba is “unwilling to make a better deal for the Cuban people, the Cuban-American people, and the U.S. as a whole.”  Obama’s staff prematurely declared normalization “irreversible,” and Trump may be equally premature in threatening to reverse it.  Cuba’s changing on its own, and Fidel’s passing will probably give change on the island, if not in Washington, a push.  Efforts to return to a Cold War posture would probably put Cuba on the defensive and slow its transition processes – but not even Fidel could stop the march of time.

November 29, 2016

Cuba: Implications of U.S. Tourism

By Emma Fawcett*

Tourists on beach in Cuba

Photo Credit: Emmanuel Huybrechts / Wikimedia / Creative Commons

U.S. regulations still technically ban tourist travel to Cuba by U.S. citizens, but the Obama Administration’s policies have already spurred significant growth in visitor arrivals to the island – with implications for Cuba and its Caribbean neighbors.  Over the last year, Cuba has experienced a 17 percent increase in total visitors, and a 75 percent increase in arrivals from the United States since Washington expanded the categories of permitted travel and, according to observers, relaxed enforcement.  An agreement to begin commercial airline operations between the two countries promises even more travel.  Other elements of the embargo continue to complicate U.S. travel: most U.S.-issued credit cards still do not work on the island; phone and internet connections are limited; and visitors often face persistent shortages of food items, consumer goods, and hotel rooms.  But the surge almost certainly will continue.

The onslaught of U.S. tourists challenges the Cuban tourism industry’s capacity.  Cuba has one the lowest rates of return visits (less than 10 percent) in the Caribbean; on the other islands, 50 percent to 80 percent of tourists make a return visit.  It has serious weaknesses:

  • While Cuba’s unique appeal may draw in millions of first-time visitors, the still relatively poor quality of service apparently discourages tourists from making the island a regular vacation spot. Sustaining arrivals requires higher marketing costs.  Average spending per visitor, moreover, has been on a fairly steady decline since 2008.
  • About 70 percent of Cuba’s tourists come for sun-and-beach tourism – a sector under state control – but private microenterprises have already demonstrated more agility in responding to demand than the state-owned hotels or joint ventures. The government reported last year that 8,000 rooms in casas particulares, or bed-and-breakfasts in Cubans’ homes, were for rent, and the number is growing steadily.
  • Cuba’s “forbidden fruit” factor may have a limited shelf life as visitors sense the imminent end to Castroism and the arrival of McDonalds, Starbucks, and their ilk. Questions remain about how long Cuba’s current environmental protections will continue when tourist arrivals increase.  Nicknamed the “Accidental Eden,” Cuba is the most biodiverse country in the Caribbean because of low population density and limited industrialization.  But rising visitor arrivals (and the effects of climate change) are likely to increase beach erosion and biodiversity loss.

Ministers of tourism in the other Caribbean countries have downplayed fears about competition from Cuba, but their optimism is sure to be tested.  A successful Cuban tourism sector could conceivably spur region-wide increases in visitor arrivals, but it could also cause other Caribbean countries to lose significant market share.  The official Communist Party newspaper, Granma, has suggested the government’s goal is to almost triple tourist arrivals to 10 million per year.  President Danilo Medina of the Dominican Republic, the most visited country in the region (at about 5.5 million tourists a year), has also set a goal of reaching 10 million arrivals by 2022 – setting that country to go in head-to-head competition with Cuba.  Jamaica, the third most visited country in the region, has instead pursued a multi-destination agreement with Cuba, designed to encourage island-hopping and capitalize on Cuba’s continued growth.  Previous attempts at regional marketing and multi-destination initiatives have had mixed success.  But as Cuba’s tourism sector continues to expand, Caribbean leaders – in what is already the most tourism-dependent region in the world – undoubtedly sense that Cuba is back in the game and could very well change rules under which this key industry has operated for the past six decades.

July 25, 2016

*Emma Fawcett is a PhD candidate in International Relations at American University.  Her doctoral thesis focuses on the political economy of tourism and development in four Caribbean case studies: Haiti, Dominican Republic, Cuba, and the Mexican Caribbean.

Trumping GOP Resistance to Strengthened Ties with Cuba

By Eric Hershberg

Malecon Twilight

Nighttime on the Malécon in Havana, Cuba. Photo credit: William Beem / Google Images / Creative Commons

One wild card on the horizon in the normalization of U.S.-Cuba ties looks unlikely to materialize.  As pointed out in several CLALS publications (such as here and here), ever since Presidents Obama and Castro announced on December 17, 2014, that they intended to improve relations, there has been a sense of uncertainty regarding whether their successors might roll back the advances they make.  This was particularly so when several Republican politicians seeking their party’s presidential nomination campaigned against President Obama’s “coddling” of the Cuban Communists and his “unilateral concessions” to Havana.  Marco Rubio (Florida) and Ted Cruz (Texas) – two of the Cuban-Americans in the U.S. Senate –made particularly aggressive statements indicating an intention to reverse all or parts of the Obama administration’s executive actions affecting Cuba policy, which, unlike legislation, can be reversed by a subsequent administration.  But they have dropped out of the race as presumptive nominee Donald Trump defeated them and former Governor Jeb Bush, whose Florida political base, family background, and public statements also indicated opposition to normalization.

Trump and the leading Democratic candidate, Hillary Clinton, have very significant policy differences on many issues, but apparently not on Cuba.  Clinton in her memoirs about her tenure as Secretary of State, like Trump in his public statements, appears inclined to sustain the current direction of Washington’s engagement with Havana (although Trump claimed last year that “we should have made a better deal”).  The two likely nominees share noteworthy characteristics, including, remarkably, that they are the least popular candidates that either major party has nominated since polling data have been collected. Advocates of full normalization cannot take either candidate’s leadership on the issue for granted. Clinton’s challenger, Senator Bernie Sanders, has pushed her to the left on some domestic issues, but recent press profiles on her indicate that she remains wedded to a hawkish approach to foreign policy.  The endorsement of several key Washington Neo-Conservatives further suggests she could swing to the right on foreign policy matters.  On the other hand, Trump’s zigzagging on Cuba – 15 years ago he was a staunch proponent of the embargo – and his impulsive decision-making style leave open the possibility that he also could reverse Obama’s executive actions and call on the Congress to keep embargo legislation unchanged.

Although mistakes can occur and various wildcards can slow, or even break, the current momentum, the twists and turns of the U.S. primary election season seem to have diminished substantially prospects that a new President sworn in next January would significantly change Obama’s winning formula on Cuba.  Clinton will have no incentives to abandon a policy that she takes some credit for promoting.  Trump has, if anything, proven that he revels in taking on GOP orthodoxy – and will presumably continue to do so on Cuba policy.  His sympathies align much more clearly with the pro-business Chamber of Commerce, an aggressive opponent of the embargo against Cuba, than with the ideologues on the right of his party, and he will give a green light to the many members of Congress who want full trade with and free travel to the island to change the law.  Concerns that a new U.S. president could reverse Obama’s executive actions on January 20, 2017, can now be assuaged, and Congressional proponents of lifting the embargo likely will have time to build momentum to pass legislation rendering the executive measures moot.  One can imagine that the Donald’s criteria of success for Cuba policy begin with the glare of a gaudy neon Trump sign on a casino along the Havana Malecón, but it’s reasonable to wager that the Cuban government will negotiate a better deal.

May 31, 2016

 

Cuba: Raúl Clarifies the Lack of Clarity on Future

By Fulton Armstrong

raul pcc congress

Photo Credit: Alexandre Seltz and Sarumo74 (modified) / Google Images / Creative Commons

The report that Cuban President Raúl Castro delivered to the 7th Party Congress last weekend walked a tightrope between pressing harder for change – embracing the importance of the small, emerging private sector – and reassuring party conservatives that the basic tenets of the revolution will not be touched.  He reiterated his commitment to step down in 2018 and promote younger cadre, but he left unclear what he proposes the Cuban system look like in the future.  He defended his decision to normalize relations with the United States, but used Washington’s continuation of the embargo and “democracy promotion” and immigration policies as a rationale for not letting down the Party’s guard.  Among key points:

On Conceptualización.  Castro said this Congress was basically to give “confirmation and continuity” to policies set five years ago to update Cuba’s economic and social model,  but it kicks off a process of consensus-building around a conceptualización, which he said “outlines the theoretical bases and essential characteristics of the economic and social model that we aim for as result of the updating process.”  Private property is a major topic, and Raúl sought to reassure the party that respect for it does not mean – “in the slightest bit” – a return to capitalism.

On reforms approved previously.  The road has been difficult, he said, held back by “an obsolete mentality that gives rise to an attitude of inertia and an absence of confidence in the future.”  He referred to the foot-draggers as “having feelings of nostalgia for other, less-complicated moments in the revolutionary process,” such as when the USSR and socialist camp existed.  But he insisted that the reforms have continued advancing at a steady pace – “without hurry but without pause.”

On upcoming reforms.  Castro talked more about what will not happen rather than any new vision.  He firmly ruled out “shock therapies,” and he said that “neoliberal formulas” to privatize state assets and health, education, and social security services “will never be applied in Cuban socialism.”  Economic policies can in no case break with the “ideals of equality and justice of the revolution.”  But he confirmed that one of the potentially most disruptive reforms – unifying currencies and exchange rates – must be done as soon as possible to resolve and many distortions.  On foreign investment, he called on the party “to leave behind archaic prejudices about foreign investment and to continue to advance resolutely in preparing, designing, and establishing new businesses.”

On Cuba’s economic model.  Castro acknowledged “the introduction of the rules of supply and demand” and claimed they didn’t contradict the principle of planning, citing the examples of China and Vietnam.  “Recognizing [the role of] the market in the functioning of our socialist economy,” Castro said, does not imply that the party, government, and mass organizations stand by and watch abuses occur.

On private and state enterprises.  He said the “non-state sector” – which includes “medium, small, and micro-enterprises” – is providing very important goods and services, and expressed hope for its success.  This sector will continue to grow, he said, “within well-defined limits and [will] constitute a complementary element of the country’s economic framework.”  Castro also called for greater reform efforts to strengthen the role of – and, simultaneously, the autonomy of – state companies, telling managers to overcome “the habit of waiting for instructions from above.”    He noted that the creation of cooperatives outside agriculture “continues in its experimental phase,” with some achievements and shortfalls.

On U.S. policies and intentions.  Castro criticized Washington’s efforts to drive political change in Cuba, which he called “a perverse strategy of political-ideological subversion against the very essence of the revolution and Cuban culture, history, and values.”  He said, “We are neither naive nor ignorant of the desires of powerful external forces that are betting on what they call the ‘empowerment’ of non-state forms of management as a way of generating agents of change in hopes of ending the revolution and socialism in Cuba by other means.” Castro said that U.S. officials recognize the failure of past policy toward Cuba but “do not hide that the goals remain the same and only the means are being modified.”

Rhetoric about forever rejecting capitalism (and multi-party democracy) is standard, especially for a Party event meant to assuage anxieties of conservative factions reluctant to give up their familiar, if failed, models.  The re-election of 85-year-old Vice President Machado Ventura is another sop to the aging right as the country inches each day to its biologically imposed transition, as Fidel Castro made explicit in his closing remarks.  The pace of change in Washington is also slow in some areas, particularly the embargo and the Administration’s “democracy promotion” strategies,  but pro-normalization voices cannot be faulted for lamenting that Cuba could more effectively influence U.S. policy through simple regulatory measures encouraging business deals that will give momentum to embargo-lifting initiatives in the U.S. Congress.  All politics is local, however, and both governments seem content holding off on changing their paradigms for now.

April 21, 2016

Spain: Too Distracted to Play in Latin America?

By An Observer*

Rajoy Latin America

Photo Credit: La Moncloa Gobierno de España and Heraldry (Modified) / Flickr & Wikimedia / Creative Commons

Spain’s political crisis and problems facing the European Union have undermined Madrid’s ability to pursue interests in Latin America at a time of new opportunities.  Amidst countless months of lameduck government and the failure of either the Partido Popular (PP) or the Partido Socialista (PSOE) to form a government, the country is also tied in knots over corruption scandals, including some touching a Cabinet member and the royal family, and Cataluña’s persistent challenges to central authority.  Even before the current mess, Prime Minister Rajoy had shown only modest interest in Latin America, and King Felipe hadn’t yet demonstrated the mettle of his father, who once famously told Venezuelan President Chávez to shut up at an Ibero-American Summit.  Adding to Spain’s distractions are a series of EU challenges, ranging from refugee crises to terrorism and the Mediterranean countries’ debt overhang.  Spanish elites, who remain committed to the EU vision, are seized with concerns about Brexit, the UK’s flirtation with withdrawal, and perplexed by the absence of a renewed integration project.

Madrid’s declining role coincides with changes in Latin America that would normally grab its attention.  President Obama and Raúl Castro’s historic normalization of diplomatic relations has opened the door to at least one major U.S. hotel firm signing contracts to refurbish and manage several Cuban hotels – an industry in which Spain previously had extraordinary advantages.  Having played “good cop” with Cuba for many years, compared to Washington’s “bad cop,” Madrid’s future role on the island is at most uncertain.  The election of market-friendly President Macri in Argentina, where the previous government nationalized a Spanish energy company and adopted other policies causing bilateral estrangement, also represents an opportunity for Spain.  The near-completion of peace talks between the Colombian government and guerrillas should be the crowning jewel of a foreign policy in which Spain made a strong political investment early on, but Madrid has receded to the role of bit player.  At a time that Latin Americans continue to espouse support for CELAC and other regional organizations that exclude Spain (and the United States), Spain-sponsored Cumbres Iberoamericanas since 1991 have – even more than the U.S.-sponsored Summit of the Americas – lacked dynamism and produced little as the beacon of the Spanish transition was dying down

By turning inward, Spain risks losing what remains of its special cachet as Latin America’s link to Europe and as a country that made a successful transition to democracy with inclusion, human rights, vibrant media, and increasing transparency.  Its political capital in the region is running low, and budgetary constraints have diminished its aid budgets (from 0.5 percent of GDP to 0.13 percent).  But opportunities remain.  Big Spanish companies – Telefónica, Banco Santander, BBVA, Repsol, and others – and numerous mid-sized firms have shown interest in Latin America.  Cuba’s reluctance to embrace U.S. ties too tightly and too fast gives Spain important space to play a role if it wants.  Moreover, Spain’s diplomatic skills, critical for Central America’s peace processes and elsewhere, could still be a positive force in that subregion.   If it weren’t for former Spanish Prime Ministers’ contradictory roles in Venezuela, where U.S. baggage undermines Washington’s approach to political, economic, and security problems, Spain could be active there too.  But the Prime Minister and his cabinet have not given the Foreign Ministry the green light to get more deeply involved.  It’s not too late for Spain to turn things around and get back into the game in Latin America.  For that to happen Spain needs more consistent governance.

April 18, 2016

* The writer is long-time non-academic observer of Spanish foreign policy in Latin America.