An Illusory Opening to Cuba: Why Florida Shouldn’t Walk Through the Breach

Sunday, March 22, 2015
By Keith Fernandez in The Journal of the James Madison Institute:

An Illusory Opening to Cuba: Why Florida Shouldn’t Walk Through the Breach

Many have cheered President Obama’s Dec. 17, 2014 announcement calling for changes in our relationship with Cuba as a sort of victory. His administration will unilaterally provide concessions to the Castro regime in Havana and he subsequently called for lifting the embargo at his 2015 State of the Union speech. However, the facts paint a bleak picture. While the Obama administration and its allies cast concessions as necessary to secure the release of wrongfully imprisoned USAID contractor Alan Gross, the unfortunate reality is that this negotiation, if it can be called that, was akin to a mountain of presents under the Castro regime’s Christmas tree.

President Obama’s call to lift the embargo has ignited a controversy as to whether our country should continue to stand with Cuban pro-democracy leaders. While some in Florida may be tempted by the Castros’ off-key siren song to take advantage of business opportunities, any who believe it is wise to lift the embargo and venture into these waters should keep this regime’s history in mind before taking the plunge.

Lifting the embargo and extending credit to the Castros would only fuel the regime’s repressive apparatus and put businesses at a commercial risk as there is already a mechanism in place for secure sales to Cuba. So-called “cash-only” sales of agricultural products, where payment must be received in advance, have occurred from many states. These types of sales have ensured businesses are not fleeced by the notoriously debt-laden Castro regime. It also allowed for a safe-harbor for businesses in dealing with Cuba since, ironically, special rules had to be enacted so that American businesses could count on what is essentially a routine practice in commerce: a normal and dependable trade relationship where both parties hold up their end of the bargain. It may be surprising to some but the Castros’ practice of placing an order and then forgetting their wallet is a time-honored regime trick.

While a cogent argument can be made regarding agricultural sales to the Castro regime on a cash-only basis, it is difficult to discern what doing business with a regime that regularly refuses to pay debts confers on Florida’s businesses. Although some advocate for increased commerce with Cuba for commerce’s sake, that is, to not be left out of the marketplace, what merchant would wisely trade with a customer who is a notorious credit risk and expect a change in the customer’s paying habits? It may at times be commendable to “always look on the bright side of life,” as advised in Monty Python’s Spamalot, but opening up American businesses to considerable risk for little to no return on commercial transactions with the Castro regime will most certainly ensure the last laugh will be on our business community.

Also, those looking for redress in Cuban courts to the non-payment of any future (or past, for that matter) debts incurred will be severely disappointed. Americans will encounter a ramshackle system of justice as the Cuban regime’s kangaroo courts have a history of show trials and lack any semblance of due process.

Cuban courts have been traditionally hostile to American interests. The regime’s court system’s track record already consists of de facto ratification of approximately $8 billion seized in confiscated property, plus another $2 billion owed for criminal judgments. Even considering recent overtures to the dictatorship that not an iota of Cuban judicial ink has been spilled to right past illegal property expropriation is a testament to the biases inherent in the system where American citizens and businesses cannot get a fair hearing. If there is no strong, independent judiciary to speak of in Cuba, to whom can Americans turn when they suffer similar expropriation, depravation, or even just a run of the mill breach of contract? As the famous (to those of us who came of age in the 90s) Michael Franti sang, in Cuba there is “false advertising sayin’ ‘Halls of Justice.’” Florida businesses would be wise to consider the risks of trading with Cuba.

Opponents of  the embargo against the Castro regime often argue that despite current agricultural sales to Cuba, more can and should be sold to those on the island and, following these sales, the Cuban people will be empowered by the proliferation of goods to demand their basic human rights. This theory presupposes that, like in a capitalist system, the benefits of trade will eventually trickle-down to the people and all Cubans will derive some benefit, no matter how small, from an increase in goods and services. However, proponents of this theory frequently overlook the fact that the entire world, except for the United States, has open trade relations with Cuba with no corresponding increase in human rights.

Those who advance this Maslow-esque hierarchy of needs argument discard the fact that the Cuban regime, run by career oppressors, is not interested in advancing the Cuban people’s commercial, political, and/or personal well-being. Havana’s modus operandi is to reap the benefits of trade without allowing any commensurate benefit to the people it has under its repressive thumb. For example, those wishing to build a hotel in Cuba must partner with the regime in a joint venture where the regime retains a controlling stake. The regime then permits the operation of the hotel but insists on hiring the workers and, in an arrangement that would make even the most flagrant Ponzi scheme kingpins blush, they collect dollars, euros, or whatever international currency is destined to pay the Cuban workers and instead pay the currency’s 1:1 equivalent in pesos. By way of example, a Cuban hotel worker who was promised $260 a month will be paid 260 Cuban pesos a month, which converts to roughly $10 USD.

This type of bait and switch is the rule, not the exception, in the Castros’ decrepit dealings. This outdated relic has survived the Cold War and subsequent years by relying on international patrons whose interest in Cuba was more important than their business acumen. Cuba has managed to convince autocratic regimes around the world, be it the former Soviet Union or more recently Venezuelan autocrats that helping a fellow totalitarian regime would pay dividends. Luckily for those on the island and abroad advocating for human rights and the rule of law, both dangerous concepts in today’s Cuba, international largesse is not what it once was and the regime is looking at deteriorating subsidies from its just as repressive enablers.

Finally, some have argued that in addition to the commercial benefits to Florida, an increase in travel will also benefit the Cuban people. Though many imagine travel to be an opportunity to explore a country, the sad fact of the matter is that travelers in Cuba are some of the least connected people on the island. Travelers often go to and stay in beach resorts and tourist areas, choice jobs for those most loyal to the Castro regime. Contact with Cubans who do not work in the tourism industry is often monitored and controlled.

Cuba is no more a feel-good vacation destination than a trip to sunny North Korea. The weekly repression of the members of Las Damas de Blanco (the Ladies in White), a group of women who march peacefully and silently in protest of the regime for arresting and jailing political prisoners, should give anyone pause before booking their next charter flight to Havana. Even if Floridians are willing to lose money in a botched commercial transaction with the regime, they should not be willing to lose their essential moral value of standing up for those who are oppressed. If Florida is truly to lead in the 21st century, we must stand for what is right, not because it is popular.

Many Floridians may have dreamed of traveling to Cuba or have begun to wonder what exciting investment opportunities await in a land that has fascinated so many. However, it is the wrong time for Floridians, and indeed any American, to invest in Cuba. The sad fact of the matter is that Cuba’s failed economy is controlled by the military, with an almost non-existent court system, and a track record of fleecing those with whom it trades.

A quick infusion of Floridian cash through tourism or any other method of trade will only serve to perpetuate a hostile environment for American business owners and empower a deplorable violator of human rights only 90 miles from our shores.

A wiser use of Florida’s business resources would be to prepare for the day that a democratic government that respects the rule of law is in place on the island. Businesses would have control over who they hire, access to courts, and the ability to rest assured that their investments not only help the Cuban economy generally but that the Cuban people will see the benefit of those transactions. Our state is poised to play a pivotal role in a free and democratic Cuba. We should ensure our legacy is one of supporting a market-based economy with guaranteed human rights instead of a decrepit dictatorship whose legacy will be confined to the dark annals of history.