Q&A: Will New U.S. Rule Changes Benefit the People of Cuba?

Wednesday, February 10, 2016
From The Inter-American Dialogue's Latin America Advisor:


Will New U.S. Rule Changes Benefit the People of Cuba?

Q. The administration of U.S. President Barack Obama announced Jan. 26 that it was removing many restrictions on U.S. financing of exports to Cuba, allowing U.S. banks to directly finance the exportation of any product other than agricultural commodities, among other changes. How important are the latest Cuba policy revisions for U.S. companies wanting to do business with the island? How will the changes in rules affect Cuba’s economy and citizens? What do the revised rules mean for Cuba’s state enterprises, which supporters of the U.S. economic embargo fear will be used to prop up the Castro regime and enrich governing elites? What other changes in U.S. policy toward Cuba are likely to take place before Obama leaves office next year?

A. Otto Reich, president of Otto Reich Associates LLC and former assistant secretary of state for Western Hemisphere Affairs under President George W. Bush:

“The latest Obama administration Cuba revisions, like other administration foreign policy initiatives, are vain attempts at self-fulfi lling prophesies, intended to give the impression of progress. They mean nothing to U.S. companies as long as they are expected to do business with a dictatorship controlled for 57 years by one family, the Castros, and a military regime run by an active-duty army general (84-year-old Raúl), the last dictator left in the Americas. Cuba’s government has no respect for contract sanctity and proves it by continuing to confiscate foreign businesses whenever the ruling family sees one it wants for itself. The country has no newspaper, radio or television station, school, university, labor union, trade or civic association, or any other institution of civil society that is not under the control and censorship of the Communist Party of Cuba, the only political party recognized by the country’s laws. The government also requires foreign companies to contract its workers exclusively through a state agency that receives the worker’s salary in foreign currency but pays Cuban workers an artificial, government-set wage that amounts to 5 cents of each dollar that the foreign employer has paid the government, a practice that has been described as ‘virtual slavery.’ Cuba also forces foreign investors into joint ventures controlled by the Castro family and does not allow collective bargaining, freedom of association, press or speech; and has put in place a succession of the family enterprise, also known as Cuba, to the children of Fidel and Raúl Castro. For those reasons, it is not just ‘supporters of the U.S. economic embargo’ who fear that Obama policies will be ‘used to prop up the Castro regime and enrich governing elites’. Anyone who knows Cuba knows that the regime exists for one purpose: self-perpetuation in power. This is why the overwhelming majority of Cuban dissidents condemn the Obama administration’s policy as having strengthened the regime’s hand, rather than ‘empowering the Cuban people,’ as President Obama eloquently but emptily repeats, as if wishing will make it so.”

A. Frank Calzon, executive director of the Center for a Free Cuba:

“It is hard to disagree with Senator Robert Menendez (D-N.J.): The ‘action by the administration is a contravention of the law—the will of Congress, and the people who elected us, and a betrayal to those brave Cubans who have raised their voices in support of freedom, only to be silenced by a regime we are now helping.’ Since the president’s announcement on Dec. 17, 2014, there has been a reduction of more than 50 percent in U.S. agricultural cash purchases. The reduction in Havana’s purchases was designed to blackmail corporate interests to prod the administration to burden the American taxpayers if Havana fails to pay. The president’s disregard for the law establishes a most dangerous precedent. While many focus on Obama’s economic underwriting of the Cuban regime, Raúl Castro continues to hold a U.S. Hellfire missile, a strategic matter the administration has swept under the rug. Havana also continues to hold hundreds of millions of stolen Medicare and Medicaid funds which are deposited in Cuba’s National Bank. The administration and American agricultural interests pretend that the nature of Raúl Castro’s regime is not important. When an American investor ends up in a Cuban jail on trumped up charges without due process, as it happened to Alan Gross, he might spend years in prison, lose his teeth and be abused. President Obama’s response, if any, will be to pay ransom once again, while the Cuban people are ignored and the regime is strengthened.”