Amer­ica re­turns to Cuba

Financial Mirror (Cyprus) - - FRONT PAGE -

Barack Obama’s visit to Cuba is the first by a US pres­i­dent since Calvin Coolidge went in 1928. Amer­i­can in­vestors, ex­pat Cubans, tourists, schol­ars and scam artists will fol­low in Obama’s wake. Nor­mal­i­sa­tion of the bi­lat­eral re­la­tion­ship will pose op­por­tu­ni­ties and per­ils for Cuba, and a gi­ant test of ma­tu­rity for the United States.

The Cuban Rev­o­lu­tion led by Fidel Cas­tro 57 years ago was a pro­found af­front to the US psy­che. Since the found­ing of the US, its lead­ers have staked a claim to Amer­i­can ex­cep­tion­al­ism. So com­pelling is the US model, ac­cord­ing to its lead­ers, that ev­ery de­cent coun­try must surely choose to fol­low Amer­ica’s lead. When for­eign gov­ern­ments are fool­ish enough to re­ject the Amer­i­can way, they should ex­pect ret­ri­bu­tion for harm­ing US in­ter­ests (seen to align with uni­ver­sal in­ter­ests) and thereby threat­en­ing US se­cu­rity.

With Ha­vana a mere 90 miles from the Florida Keys, Amer­i­can med­dling in Cuba has been in­ces­sant. Thomas Jef­fer­son opined in 1820 that the US “ought, at the first pos­si­ble op­por­tu­nity, to take Cuba.” It fi­nally did so in 1898, when the US in­ter­vened in a Cuban re­bel­lion against Spain to as­sert ef­fec­tive US eco­nomic and political hege­mony over the is­land.

In the fight­ing that en­sued, the US grabbed Guan­tá­namo as a naval base and as­serted (in the now in­fa­mous Platt Amend­ment) a fu­ture right to in­ter­vene in Cuba. US Marines re­peat­edly oc­cu­pied Cuba there­after, and Amer­i­cans quickly took own­er­ship of most of Cuba’s lu­cra­tive sugar plan­ta­tions, the eco­nomic aim of Amer­ica’s in­ter­ven­tion. Gen­eral Ful­gen­cio Batista, who was even­tu­ally over­thrown by Cas­tro, was the last of a long line of re­pres­sive rulers in­stalled and main­tained in power by the US.

The US kept Cuba un­der its thumb, and, in ac­cor­dance with US in­vestor in­ter­ests, the ex­port econ­omy re­mained lit­tle more than sugar and to­bacco plan­ta­tions through­out the first half of the twen­ti­eth cen­tury. Cas­tro’s rev­o­lu­tion to topple Batista aimed to cre­ate a mod­ern, di­ver­si­fied econ­omy. Given the lack of a clear strat­egy, how­ever, that goal was not to be achieved.

Cas­tro’s agrar­ian re­forms and na­tion­al­i­sa­tion, which be­gan in 1959, alarmed US sugar in­ter­ests and led the US to in­tro­duce new trade re­stric­tions. Th­ese es­ca­lated to cuts in Cuba’s al­low­able sugar ex­ports to the US and an em­bargo on US oil and food ex­ports to Cuba. When Cas­tro turned to the Soviet Union to fill the gap, Pres­i­dent Dwight Eisen­hower is­sued a se­cret or­der to the CIA to topple the new regime, lead­ing to the dis­as­trous Bay of Pigs in­va­sion in 1961, in the first months of John F. Kennedy’s ad­min­is­tra­tion.

Later, the CIA was given the green light to as­sas­si­nate Cas­tro. In 1962, Soviet leader Nikita Khrushchev de­cided to fore­stall an­other US in­va­sion – and teach the US a les­son – by sur­rep­ti­tiously in­stalling nu­clear mis­siles in Cuba, thereby trig­ger­ing the Oc­to­ber 1962 Cuban mis­sile cri­sis, which brought the world to the brink of nu­clear an­ni­hi­la­tion.

Through daz­zling re­straint by both Kennedy and Khrushchev, and no small mea­sure of good luck, hu­man­ity was spared; the Soviet mis­siles were re­moved, and the US pledged not to launch an­other in­va­sion. In­stead, the US dou­bled down on the trade em­bargo, de­manded resti­tu­tion for na­tion­alised prop­er­ties, and pushed Cuba ir­re­vo­ca­bly into the Soviet Union’s wait­ing arms. Cuba’s sugar mono­cul­ture re­mained in place, though its out­put now headed to the Soviet Union rather than the US.

The half-cen­tury of a Soviet-style econ­omy, ex­ac­er­bated by the US trade em­bargo and re­lated poli­cies, took a heavy toll. In pur­chas­ing-power terms, Cuba’s per capita in­come stands at roughly one-fifth of the US level. Yet Cuba’s achieve­ments in boost­ing lit­er­acy and pub­lic health are sub­stan­tial. Life ex­pectancy in Cuba equals that of the US, and is much higher than in most of Latin Amer­ica. Cuban doc­tors have played an im­por­tant role in dis­ease con­trol in Africa in re­cent years.

Nor­mal­i­sa­tion of diplo­matic re­la­tions creates two very dif­fer­ent sce­nar­ios for US-Cuba re­la­tions. In the first, the US re­verts to its bad old ways, de­mand­ing dra­co­nian pol­icy mea­sures by Cuba in ex­change for “nor­mal” bi­lat­eral eco­nomic re­la­tions. Congress might, for ex­am­ple, un­com­pro­mis­ingly de­mand the resti­tu­tion of prop­erty that was na­tion­alised dur­ing the rev­o­lu­tion; the un­re­stricted right of Amer­i­cans to buy Cuban land and other prop­erty; pri­vati­sa­tion of state-owned en­ter­prises at fire-sale prices; and the end of pro­gres­sive so­cial poli­cies such as the pub­lic health sys­tem. It could get ugly.

In the se­cond sce­nario, which would con­sti­tute a his­toric break with prece­dent, the US would ex­er­cise self-re­straint. Congress would re­store trade re­la­tions with Cuba, with­out in­sist­ing that Cuba re­make it­self in Amer­ica’s im­age or forc­ing Cuba to re­visit the post-rev­o­lu­tion na­tion­al­i­sa­tions. Cuba would not be pres­sured to aban­don state-fi­nanced health care or to open the health sec­tor to pri­vate Amer­i­can in­vestors. Cubans look for­ward to such a mu­tu­ally re­spect­ful re­la­tion­ship, but bris­tle at the prospect of re­newed sub­servience.

This is not to say that Cuba should move slowly on its own re­forms. Cuba should quickly make its cur­rency con­vert­ible for trade, ex­pand prop­erty rights, and (with con­sid­er­able care and trans­parency) pri­va­tise some en­ter­prises.

Such mar­ket-based re­forms, com­bined with ro­bust pub­lic in­vest­ment, could speed eco­nomic growth and di­ver­si­fi­ca­tion, while pro­tect­ing Cuba’s achieve­ments in health, education, and so­cial ser­vices. Cuba can and should aim for Costa Rican-style so­cial democ­racy, rather than the cruder cap­i­tal­ism of the US. (The first au­thor here be­lieved the same about Poland 25 years ago: It should aim for Scan­di­na­vian-style so­cial democ­racy, rather than the ne­olib­er­al­ism of Ron­ald Rea­gan and Mar­garet Thatcher.)

The re­sump­tion of eco­nomic re­la­tions be­tween the US and Cuba is there­fore a test for both coun­tries. Cuba needs sig­nif­i­cant re­forms to meet its eco­nomic po­ten­tial with­out jeop­ar­dis­ing its great so­cial achieve­ments. The US needs to ex­er­cise un­prece­dented and un­ac­cus­tomed self-con­trol, to al­low Cuba the time and free­dom of ma­neu­ver it needs to forge a mod­ern and di­ver­si­fied econ­omy that is mostly owned and op­er­ated by the Cuban peo­ple them­selves rather than their north­ern neigh­bours.

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