As Predicted, Obama's Policy Stifles 'Reforms' in Cuba

Tuesday, October 18, 2016
We have long argued how unilaterally lifting sanctions would stifle any real reforms in Cuba, for the Castro regime would solely focus on strengthening its state monopolies and the repression required to suppress change.

Six years ago, as a result of the imminent economic collapse of Venezuela, the Castro regime loosened some restrictions over Cuba's 'self-employed' entrepreneurs, which led to a rapid increase in their ranks.

However, this all came to an end on December 17th, 2014, as the Obama Administration lavished the Castro dictatorship with a series of unilateral concessions, in the form of sanctions relief.

Since then, the number of Cuba's 'self-employed' entrepreneurs has decreased and -- as reported today -- a crackdown on their activities has intensified.

If the Obama Administration truly sought to help these Cuban entrepreneurs -- as it constantly purports -- it needs to understand that the Castro regime never undertakes reforms out of desire (or good-will), but only out of necessity.

(Of course, this commitment seems doubtful, particularly in light of Obama's latest round of regulatory changes, which solely benefit Castro's state monopolies.)

As a matter of fact, in April 2014 -- several months before Obama announced his new policy -- we posed the question and predicted the unfortunate result.

Excerpt by Mauricio Claver-Carone in The Huffington Post (from April 2nd, 2014):

"Can lifting U.S. trade and investment sanctions benefit Cuba’s 'self-employment' (cuentapropistas) sector?

The short answer is: Not really.

Cuba’s military and intelligence services control and run the conglomerates of Cuba. The 'self-employment' sector represents a very small part of the island’s economy and it is important, in the debate over sanctions, to understand its nature and limits. During economic crises, the Castro regime typically authorizes a host of services that Cubans can be licensed to provide, keeping at least a portion of what they may be paid. The world’s news media refers to these jobs as 'private enterprise,' which implies 'private ownership.' Yet Cuba’s 'self-employed' licensees have no ownership rights whatsoever - be it to their artistic or 'intellectual' outputs, commodity they produce, or personal service they offer. Licensees have no legal entity (hence business) to transfer, sell or leverage. They don’t even own the equipment essential to their self-employment. More to the point, licensees have no right to engage in foreign trade, seek or receive foreign investments. Effectually licensees continue to work for the state — and when the state decides such jobs are no longer needed, licensees are shut down without recourse [...]

Based on the lessons of history, those who still believe 'self-employment' licenses are 'a step in the right direction' toward capitalism, actually have all the more reason to support U.S. sanctions. Self-employment was a temporary reaction to loss of Soviet subsidies, and with the remnants of the Chavez regime in Venezuela now imploding, Cuba will likely continue allowing it. Yet the historic lesson is clear: The Castro regime only responds when it is economically pressed. Once the Cuban economy stabilizes or begins to 'bounce back,' the Castro government reverses itself to freeze or revoke self-employment licenses. Lift U.S. sanctions and Cuba’s government will solely focus on strengthening its state conglomerates and the repression required to suppress change. Thus, U.S. sanctions are the best friends that 'cuentapropistas' now have."