Tuesday, November 12, 2013

"We have to update our policies"


President Obama doesn’t often talk about the situation in Cuba. 

When he touched on the topic two years ago, before his re-election, he spoke as if no changes were taking place in Cuba – no release of political prisoners, no expansion of small enterprise.

Last Friday in remarks at a Miami fundraiser, his view was different: “We’ve started to see changes on the island.”  He didn’t specify, but he could have mentioned that restrictions on cellular phones, overseas travel, home sales, and Cuban stays in tourist hotels have been lifted; and that an opening to small entrepreneurship has moved about 300,000 Cubans into legal private sector employment.

These developments don’t change the fact that Cuba remains a one-party state with one-party elections, state-controlled media, limits on free assembly, and more.  But they do show movement of a kind that has not been seen in Cuba before – movement that in any other context would be seen as a diplomatic opportunity by the Obama Administration. 

Which is why the other nugget in the President’s remarks is interesting: that in U.S. policy toward Cuba we have to be “creative” and “thoughtful” and “we have to continue to update our policies.”  

He continued: “Keep in mind that when Castro came to power, I was just born. So the notion that the same policies that we put in place in 1961 would somehow still be as effective as they are today in the age of the Internet and Google and world travel doesn’t make sense.”

The President’s first-term changes in U.S. policy have had a positive impact.  Cuban Americans can visit their families and send money without restriction, and many are investing in family businesses and even helping relatives on the island to buy new homes.  As for the other 312 million Americans, those not of Cuban descent, travel remains highly regulated but the President’s liberalized regulations are enabling many thousands to go to Cuba.  When you add the fact that Cuba virtually ended travel restrictions on its own citizens, the result is an increase in communication and exchange in both directions.

If the Administration does “update our policies,” there are all kinds of possibilities even with legal restrictions in the Helms-Burton law that bar a complete lifting of sanctions and normalization of relations.

And if President Obama is really taking the long view back to 1961, maybe he will think about the posture he would adopt toward Cuba if he had not inherited a set of policies that have piled up year by year, like old junk in a closet, ever since the Kennedy Administration. 

Hopefully, he will take the long view and break at least two barriers.

The U.S. embargo was conceived as a means to bring down a Cuban government that enjoyed popular support, had no effective opposition, and would only be threatened if U.S. sanctions would deny “money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government.”  That is the line of reasoning in this April 1960 State Department memorandum. 

No one expects the embargo to have such an impact today.  But still the foundation of our policy, fully embraced by President Obama, is the idea that U.S. interests are somehow advanced by harming the Cuban economy through economic sanctions.  Today’s embargo has exceptions – we sell food and medicine, and U.S. travelers bring considerable revenue to Cuba – but all other trade is banned, investment is not allowed, and our sanctions attack other countries’ trade, investment, and financial relations with Cuba.  Embargo proponents say these are sanctions against the Cuban government, but you can’t hurt an economy without hurting the people who live in that economy. 

If the embargo didn’t exist, it’s hard to imagine that President Obama would invent it today.  He lacks the power to do away with it but he can alter it, and he can send a signal that today – especially as Cuba’s economy is changing in ways that are expanding Cubans’ economic freedoms – the United States does not want to block economic improvement in Cuba.

Then there is the issue of diplomacy.  Even in the absence of full diplomatic relations there is ample contact between our governments, but what is missing is a dialogue that goes beyond the issues that are almost imposed on us as neighbors: migration, maritime rescue, drug enforcement, etc. 

In the case of Iran, President Obama is trying to solve the nuclear issue through diplomacy and he seems to have a larger goal of improving overall relations if the security issue can be solved.  To that end, he quietly reduced enforcement of certain economic sanctions once the new Iranian president was elected.

The stakes are not as high in Cuba because there is no security threat.  But there is opportunity – to achieve more on “neighborhood” issues including those that affect U.S. security, to find a way to get USAID contractor Alan Gross released, to encourage Cuba’s role in ending Colombia’s guerrilla conflict, to build greater contacts with a government that is on a path of change and will soon hand the reins to the next generation.  And then to use a stronger, more productive relationship to make a stronger, more productive pitch for human rights.

Cuban officials, alas, are not cream puffs.  They will have demands involving prisoners of their own in U.S. jails, a terrorist who downed a Cuban airliner in 1976 and now lives freely in Miami, and more.  They tend to invoke a century of reasons to resist U.S. recommendations about their domestic affairs.  But they say they want improved relations, so there’s a lot to test, depending on how “thoughtful” and “creative” our President decides to be.

More: coverage of the fundraiser where the President spoke from the Herald and TV Marti (video).

Tuesday, October 22, 2013

A heads-up on currency reform


The process of unifying Cuba’s two currencies is set to begin, according to a Nota Oficial in today’s Granma. 

But no details about the process were given.

A timeline of actions that will lead to monetary unification was approved last Saturday by the Council of Ministers, the note says.  As steps are taken in the process, the public will be informed.  The initial changes will affect mainly businesses and other institutions, which seems to imply the use of interim exchange rates among state enterprises and government units.  The purpose, the note says, is to re-establish the “value of the Cuban peso and its monetary functions as a unit of account, means of payment, and store of value.”  It also assures Cubans that the changes will not harm those who earn an honest living in either currency.

In that the details are not known, it is impossible to figure the economic impact of today’s announcement.  But Cuba has a lot to gain by ending its dual-currency system.  It creates two tiers of wage-earners and distorts incentives in the labor market.  In Cuban businesses, it creates an accounting fiction that favors imports penalizes exports.  And in general, it denies all actors in the economy the clear price signals that are necessary to make sound economic decisions.  Fixing the currency is only one part of a puzzle that also includes wage and salary policy, price policies in the state retail sector, and a decision on whether or not to allow state enterprises to import and export without prior permission from the government.  Those details will tell whether there are winners and losers in this process, and who they are.

Tuesday, October 15, 2013

Odds and ends



·         As the 15th round of Colombia peace talks proceed in Havana, Juventud Rebelde gives ample coverage to the Colombian government’s complaint that the guerrillas are dragging their feet and trying to add extraneous items to the agreed agenda.  Cuba acts as “guarantor” in the talks.

·         Herald: Panamanian officials say that some of the aircraft engines on the North Korean freighter seized in Panama were “brand new.”  They also say that “friends overseas” tell them that Cuba and North Korea have an arms trade agreement of uncertain scope; that the North Korean crewmen in detention are happy campers (air conditioning, clothes, food, cigarettes, time for soccer every day); and that while the crew have spoken to investigators they have declined to sign statements.

·         An “updating” of Cuba’s criminal justice procedures took effect October 1 and was explained by officials on a Mesa Redonda program.  Relatively minor offenses that had been handled in provincial courts will now be heard in municipal courts.  For certain minor offenses prosecutors will have discretion to impose administrative penalties (fines) rather than go to court to seek a prison sentence, although a defendant can insist on a court trial if he wishes.  The impact seems to be a streamlining and a shift of caseload to lower courts and, depending on how prosecutors use their discretion, lesser penalties for minor criminal offenses.

·         Canadian professor Steven Kimber makes the case for the Cuban Five in the Washington Post.

·         AP on the clash between el exilio and more recent Cuban immigrants.

·         Who’s investing in Cuba?  A smart B-School student figures it out at the bar at the Hotel Nacional.

·         Granma on the art of base stealing through the years.

·         EFE: The family of Oswaldo Paya, now living in Florida, acquires Spanish citizenship.

·         AP: A ceremony in the Colon cemetery in Havana to commemorate the terrorist downing of the Cubana airliner in Barbados in 1976.

·         In the National Interest, a look at the past and the future of Cuba’s intelligence services, “punching above their weight.”  The authors link to this interesting U.S. assessment (pdf): “Cuban Subversive Activities in Latin America, 1959-1968.”

·         In an advice column for Congress, former New Mexico governor Bill Richardson owns up to his bumbling in Havana in 2011.

From someone who should know

“In Havana, paradoxically, the FARC are making proposals that are out of proportion both to their strength and to a reality wherein the violence they practice no longer generates power, but rather eliminates it.  They have made more than 200 ‘minimal’ proposals – they want a constituent assembly, changes in the economic model, and deep reforms of the state.  They are negotiating as if they had the support of multitudes and 50,000 combatants at the gates of Bogota, when in reality their only option is to disarm rapidly and to engage in politics.

“In Colombia there is no military stalemate nor is the negotiation between equals.  The FARC leadership is elderly, they are considered terrorists by the international community while Venezuela, Ecuador, and Cuba no longer support armed struggle and instead support peace.  They have gone from having 25,000 men to having 8,000; their military activity is sporadic, irrelevant, and distant from vital centers; they have lost their territorial strongholds; they suffer numerous desertions that they replace by recruiting boys; they have more combatants disarmed than active; their strategic commanders have been eliminated and those that remain inside Colombia are besieged and in danger of dying in combat.

“Time is against the FARC but they negotiate slowly and complain that the government is in a hurry.  However, the correlation of forces favoring the state will continue to improve and the FARC’s situation will continue to worsen.  Prolonging the negotiations under these conditions will onle serve to demoralize the troops.  It is no coincidence that the talks have increased the desertions.  In war no one wants to be the last to die.  For the FARC combatants, the more than 30 leaders who make up the peace delegation are exiles living comfortably and risk-free in Havana, while they could be the last to die in a war that is already condemned to end.”

– Joaquin Villalobos, former Salvadoran FMLN guerrilla commander, in El Pais.  The FMLN fought a decade-long guerrilla war and converted to a political party when a peace agreement was reached in 1992.

Irrepressible Puig






In American baseball, there’s such a thing as The Way the Game is Played, which doesn’t include celebrating your own home run exuberantly, thereby showing up a pitcher, disrespecting him, and making him a little sharper or angrier for your next at-bat.

So what?

Yasiel Puig of the Dodgers broke out of an 0-for-10 series slump with a drive to deep right last night, which he celebrated exuberantly as a home run as he made his way slowly to first.  When it didn’t clear the wall he turned on the jets and made it to third standing up in about two seconds, there to celebrate his RBI triple. 

There’s a lot of harrumphing going on about Puig’s antics in the baseball world today, which LA Times writer Bill Shaikin puts in very good perspective here.  I think you have to be a Cardinals fan or a real grump to be down on this kid from Cienfuegos today. 

Look at the video below, taken from the stands, and ask yourself who wouldn’t want to be a Dodger fan today?