Is it the Right Time to Lift the Cuban Embargo?

Wednesday, October 7, 2015
By Pablo Diaz Espi, editor of Diario de Cuba:

Is Now the Right Time?

Will a lifting of the US embargo be beneficial with the Castros still in power?

The most recent and vocal proponents of the lifting of the American embargo on Cuba wield as their main argument that this measure will benefit the Cuban people, improving their quality of life and, in the mid term, facilitating the spread of democracy to the island. It is worth analyzing how valid and accurate these arguments really are.

A few days ago the Brazilian daily Folha de Sao Paulo provided a glimpse of what could happen in a Cuba free of commercial restrictions but still under the Castros' control. During a visit to the island by former president Lula da Silva, in 2011, the Odebrecht Group, a construction giant responsible for the work in the area of Mariel —featuring a new container terminal covering 465 km2 for free trade, located to the west of Havana— allegedly lavished gifts on Raúl Castro.

This incident constitutes part of several judicial "megaproceedings" shaking the South American country’s foundations, already having taken down several important figures related to Cuba.

Marcelo Odebrecht —president of the Group and with personal ties to da Silva— accused of heading a bribery scheme worth 2.1 billion dollars involving Petrobras, which he purportedly overcharged, transferring the financial surplus to executives and politicians. Odebrecht was also sentenced for subjecting employees at sugar and ethanol plants being built in Angola to slave-like conditions.

Former president Lula da Silva (2003-2010), meanwhile, is being investigated for "influence peddling," particularly in Cuba and the Dominican Republic. Brazil's Public Ministry suspects that between 2011 and 2014, drawing upon the political capital he acquired during his time as Chief of State, Lula "secured economic advantages, direct or indirectly, from Odebrecht in exchange for influencing acts carried out by foreign public agents, paid for directly or indirectly by the National Development Bank (BNDES)."

In September Jorge Dirceu, the former treasurer of the Workers Party, educated and trained in Cuba, was sentenced to 15 years of prison for committing ("with sophistication") the crimes of corruption, money laundering and criminal association.

In light of these facts, and from a Cuban perspective, it is worth looking into the gifts received by Raúl Castro and his son-in-law, General Luis Alberto Rodríguez Callejas - president of the all-powerful GAESA, the conglomerate that controls the revenue from tourism, telecommunications and currency exchange in Cuba, among other things, in addition to being the Cuban partner on the Mariel project, tied to the corrupt plot in Brazil. Did they receive money? If so, how much?

In a country with an independent judicial authority, one might expect an investigation of this now. But in Cuba, of course, nobody will do so —or even take an interest in the matter.

The Castros’ business

According to The Washington Post, in 2013 alone American travelers took assets worth 3.5 billion dollars to the island, while Cuban-Americans sent 3.1 billion dollars to the country in money wires. And this is in spite of the embargo, which already allows Havana to buy foods and medicines directly from American companies. What this makes evident is that when they talk about the end of restrictions what the Castros are really interested in is access to international credit and, particularly, to American banks. In other words, the Castros want to exploit the U.S.A. like they did the USSR and Venezuela under Chavez: a source of funding that allows them to retain their power line their coffers, until they known they are out of danger.

In return, they offer what any capitalist would find a tantalizing offer: an unexploited market, devoid of competition, as we Cubans cannot invest in our own country; 10 million potential consumers; a workforce that is relatively well-educated, very cheap, and without any rights (including, of course, the right to strike and to organize in independent unions); a centralized economic interlocutor; zero criticism by the press; and a banned opposition and repressed civil society that cannot question business practices.

In the 90s, after the fall of the Communist bloc in Eastern Europe, the lifting of the embargo would have been a good option. It was what some of us called for then, but we were, frankly, outnumbered. The regime, with its heavy-handed, inefficient structures and its intransigent ideological discourse still intact, would not have been able to handle such a shift in the ground rules. But now, having taken note —after looking to Russia, Vietnam, Venezuela, Nicaragua, and the former Soviet Republics— that a totalitarian state is not required to subjugate and control a society; now that the Castros have assimilated the transformation to state capitalism (breaking their own laws and Constitution, but nobody cares); now that totalitarianism has been but partially overturned, but still poised to suck all investment into a quagmire of corruption and absurd laws... is the lifting of the embargo really a positive option for Cubans?

The argument that a lifting of the embargo would be a blessing for the island's people warrants very careful reflection. Let us suppose that all the economic and commercial restrictions are actually lifted, and that the regime acquires access to loans and the green light to negotiate with any and all capitalists dropping by the gardens of the Hotel Nacional. Who will oversee those loans for Cuba? What institutions?  Who will decide what to buy, and at what price?  General Rodríguez Callejas? The state that has striven to stymie a system of dual currency?

The immense debt and the corruption generated by a state without institutions or freedoms would be another heavy weight to be borne by all Cubans —above all by the poorest: the black population, residents in rural areas, those without access to the hard currency or the information society; those who the Castro regime keeps marginalized.

In this regard, though it may seem counter-productive, the current embargo in its present configuration —with Havana free to acquire medicine and foods, the increase in permitted money wires, the ease with which one can travel, and Washington's offer to develop telecommunications on the island— just might be a better deal for the Cuban people than its elimination. In the long run, maintaining it may help to reinforce an institutional framework that is necessary for the country's future. To lift it would open the door to more corruption, more opportunism, and more wrongdoing.

If the embargo is lifted now, who shall ensure justice, fairness and reason when it comes to contracting debts and investing, and defend the true interests of the Cuban people?  Who will decide what course to follow as a nation? Capitalist partners, companies like Odebrecht, or the state which has squandered billions of dollars on a demented “Battle of Ideas” and dispatched thousands of agents and troops to infiltrate half the world?

This is not to deny the advantages of an end to the embargo, but rather to endorse a careful selection of the right moment for it. In the midst of the current clamor to lift it, it is essential to weigh the risks. Wouldn't it be better for Cuba, before lifting the embargo, if Washington and the European Union, as well as other countries in Latin America, headed up by Brazil, insisted upon a true change in the country's laws, guarantees, and that the Castros give up their monopolistic and repressive control of the country? Given the current decrepitude of the regime's leadership, and the cracking of its ideological control mechanisms, this would be more feasible than ever.

It is worth asking whether the lifting of the embargo with the Castros still in power will facilitate a transition to democracy, as its proponents argue, or, on the contrary, give rise to Cubans' worst nightmare: a failed and exclusive state, corrupt to its core, controlled by a post-Communist cadre of ideological transvestites, propped up in power by new capitalist partners; a genuine feast for wheelers and dealers, unprincipled businesspeople and lobbyists of every stripe, disguised as benefactors and democratic agents.