Tag Archives: US-Cuba Normalization

BASEBALL, BOXING AND BEYOND: HOW A U.S.-CUBA THAW COULD CHANGE THE SPORTS INDUSTRY

Posted on December 22, 2014 by Arch Ritter

Would the island nation’s sports regime retain autonomy or become a sports colony?

By:Morgan Campbell  Staff Reporter,

Toronto Star, Published on Thu Dec 18 2014

Original article here: Baseball

aThe Associated Press file photo;  In 1959, a rebel solider from Fidel Castro’s army holds the bat of Detroit catcher Charley Lau, who was playing ball in the Cuban winter league in Havana.

Thursday afternoon in Miami, Gilberto Suarez was convicted for his role a human trafficking operation that smuggled baseball sensation Yasiel Puig out of Cuba in 2012. Puig had agreed to pay Suarez 20 per cent of his future earnings, but the price went up when the Mexican drug cartel working with Suarez also demanded a cut.

Suarez now faces up to a decade in prison, while Puig is headed into the third season of a $42 million (U.S.) contract with the Los Angeles Dodgers.

And the underground economy that prompts drug gangs to spirit star athletes out of Cuba — where pro sports have been illegal since 1961 — will crumble if the ends a five-decade embargo of the island.

But beyond shutting human traffickers out of pro baseball, Wednesday’s announcement that the U.S. and Cuba would move to normalize relations signals a massive shift in Cuba’s role in the global sports-industrial complex.

Cuba’s sports system has spent the last half-century focused on Olympic success. But as a return to professional athletics becomes possible, it’s not clear if Cuba will profit from participating in free-market sports or become colonized by wealthy U.S. outfits seeking discount talent.

The issue is especially pressing for Major League Baseball, where 25 Cuban-born players made rosters in 2014. That Cuba trails only the Dominican Republic and Venezuela as a source of foreign players, highlighting the depth of talent there. Major League teams aren’t authorized to scout Cuba, and players have to leave the country before they’re eligible to sign contracts.

Baseball industry experts say Major League Baseball needs to reach a detailed agreement with Cuban baseball officials on how to scout and sign players. An unfettered free market would favour big-spending teams like the Yankees, while a draft for Cuban players would help small-market teams keep pace.

Neither system necessarily benefits Cuba’s sports infrastructure.

“It’s (similar to) colonialism, and this is precisely what the Cuban government will want to avoid,” says Adrian Burgos, professor of Latino Studies and sport history at the University of Illinois. “There’s a lot of state resources invested in developing those players . . . It’s easy to say ‘We’re Major League Baseball and this is how it’s going to happen,’ but Cuba has its own baseball tradition.”

MLB faced a similar situation in the late 1940s and early 1950s, when the toppling of the colour barrier opened up a previously untapped talent source. Big league teams signed African-American stars like Jackie Robinson and Larry Doby, but weren’t obligated to compensate the Negro League teams that developed them.

Integration enabled MLB’s current cultural diversity, but a decade-long drain of star power crippled Negro League teams financially, leading to their eventual collapse.

If Cuba wants to guarantee its 16-team domestic league remains viable, Toronto-based sports lawyer Arturo Marcano says it should emulate the Japanese league, which requires MLB teams pay a posting fee before negotiating with a player.

“The Japanese model would allow them to have some control over players, which is something really important for them,” says Marcano, who also writes a baseball column at ESPNDeportes. “The Cuban government will welcome the income they get from signing players, regardless of the system they adopt.”

aaaaFidel: Baseball Star

Baseball wouldn’t be the only sports business facing changes.

In 1976, Cuban superheavyweight boxing legend Teofilo Stevenson won his second Olympic gold medal and entertained intense speculation that he would defect from Cuba for a big money showdown with Muhammad Ali. But Stevenson wouldn’t leave Cuba for capitalism. “What is $1 million compared to the love of eight million Cubans?” he’s often quoted as saying.

But for the past two decades, top Cuban boxers have trickled out of the country to fight professionally, and right now four Cuban fighters hold pro world titles.

When Cuban Guillermo Rigondeaux dismantled Nonito Donaire in April 2013, he figured that the win over an established star would propel him into boxing’s economic elite, where eight-figure paydays are the norm.

But no high-profile fights have materialized, and many observers blame the free market. As a Cuban exile, he doesn’t have a built-in U.S. fan base, while his cerebral fighting style isn’t exciting enough to attract casual viewers.

Rigondeaux’ manager, Gary Hyde, fumes over the idea that Cuban boxers are bad for business, and sees a huge opportunity if the U.S. and Cuba can normalize relations. Staging a title bout in Cuba, he says, will disprove the notion that Cuban fighters can’t attract customers.

“They reason they haven’t a fan base is because there are 11 million people in Cuba and they can’t get out to see” Cuban fighters compete), says Hyde. “Put those fighters in a baseball stadium in Cuba and I guarantee that stadium would be full . . . But I obviously wouldn’t be charging $2,000 for ringside seats.”

Wednesday’s announcement from the White House spurred similar speculation among baseball observers, who floated the idea that MLB could eventually expand to Havana.

Big league teams have set up shop in the Caribbean before.

From 1954 to 1960, the Havana Sugar Kings served as the Cincinnati Reds’ top farm team, and in 2003 the Montreal Expos played 22 home games in Puerto Rico. “Latin America is a market (where) MLB wants to have fans,” Burgos says. “It’s so much closer than Japan.”

Carleton University economist Archibald Ritter says Havana’s Pan American Stadium could host big-league baseball, but cautions that a franchise also needs deep-pocketed ownership, corporate support and a fan base with time and money. That’s where Havana would struggle.

Ritter, a research professor who studies the Cuban economy, says the best ownership option would involve the government collaborating with a foreign corporation, but that Cuba would also need to solve its currency dilemma. Last year, the country moved to phase out the “convertible peso,” a currency equal in value to the U.S. dollar — about 20 times the value of the standard Cuban peso aimed at tourists and tourism-industry workers. Most Cubans are paid in standard pesos and many work off-the-books jobs to hustle convertible ones.

Ensuring Cubans have the purchasing power to attend commercial sports events would mean settling on a single, strong currency.  In 2010, Cuba’s per capita GDP was $10,200, according to the CIA World Factbook. That figure is about a quarter of Canada’s per-capita GDP but still strong enough to enable a team to sell low-cost tickets.

“The players would have to be paid something close to what they would get in the U.S., so it would have to be a convertible currency,” Ritter says. “If enough Cubans could pay a reasonable cost — not an American cost — to pay a game, then I think it could become possible . . . If a ticket were $15 or $20, Cubans would go. They could afford it.”

aaaaaTraining Ground for Baseball Legends

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THE UNITED STATES AND CUBA: AT LAST, A THAW! HISTORIC STEPS TOWARDS ENDING AN ANACHRONISTIC EMBARGO

Posted on December 20, 2014 by Arch Ritter

The Economist, Dec 17th 2014

Original article here: AT LAST, A THAW

obama-castro-mandela

IT HAS long been one of the great anomalies of American foreign policy. The United States normalised relations with Communist China and even with Vietnam, with which it fought a bitter war costing more than 50,000 American lives. But ties with Cuba, which long ago ceased to pose any threat to America, remained frozen in the Cold War. Maintaining the economic embargo against the communist island first imposed in 1961 was about revanchism and Congressional politics, not foreign policy.

On December 17th Barack Obama announced sweeping changes which go a long way to bring policy towards Cuba into the 21st century. The two countries will start immediate talks on restoring diplomatic relations and re-opening embassies. The president will use his executive authority to loosen the ban on travel to the island; raise the limit on remittances to ordinary Cubans and their small businesses from $500 per quarter to $2,000; and allow exports of building materials, farm equipment and telecommunications gear. Americans will be able to use their credit and debit cards on the island. The administration is also preparing to remove Cuba from its list of states that sponsor terrorism.

These announcements followed 18 months of secret talks in Canada between American officials and the government of Raúl Castro, who replaced his elder brother Fidel as Cuba’s president in 2008. The talks were encouraged by Pope Francis. They culminated with a 45-minute phone call between Mr Obama and Mr Castro on December 16th.

The biggest stumbling block to any change in the embargo was the incarceration of Alan Gross, a worker for the United States Agency for International development, who was jailed in 2009 for handing out satellite-communications gear on the island. Mr Gross, who is in very poor health, was freed on December 17th (he is pictured below with his wife, Judy, after his release). Freed too, and sent to the United States, was a Cuban whom Mr Obama said was “one of our most important intelligence agents”, as well as 53 Cuban political prisoners from a list provided by the United States. In return, the United States has released three Cuban spies serving long sentences after being arrested in 2001 for snooping on exiles and American military bases in Florida.

In seeking to normalise diplomatic relations, the administration recognised what has long been clear to the outside world: the embargo has manifestly failed to topple the Castros. Under Raúl Castro change has slowly started to come to Cuba from within. Private farmers, small businesses and co-operatives now make up around a fifth of the island’s labour force.

The United States’ Cuba policy also put it at odds with the whole of Latin America, which now favours normal ties. Mr Obama said he would attend the Summit of the Americas in Panama in April, to which Mr Castro has also been invited. He said he would continue to press for human rights and democracy in Cuba.

As for Mr Castro, it is not hard to see why he is interested in closer ties with the United States. For the past dozen years, Cuba’s moribund economy has been propped up by subsidies from Venezuela, mainly in the form of cheap oil. The fall in the oil price has pushed Venezuela’s economy into a deep recession. The approval rating of its president, Nicolás Maduro, has plunged to 25%, casting uncertainty over the durability of Venezuelan aid. Mr Castro said the agreement to restore diplomatic relations “doesn’t mean that the main thing [ie, the embargo] has been resolved”.

Only the United States Congress can repeal the embargo. What Mr Obama has done is remove some of its teeth. The president can count on public opinion in this issue, which in recent years has swung against the embargo. In an apparent attempt to mollify the pro-embargo camp, the administration recently dropped its previous opposition to a bill, approved earlier this month, imposing targeted sanctions against Venezuelan officials involved in repressing opposition demonstrations earlier this year. But none of this will assuage the president’s conservative critics in Congress. Mr Gross considered himself a “hostage” rather than a prisoner, and Mr Obama’s opponents pounced on the swap as endangering American lives, as well as coddling a dictator.

Just how far détente between the United States and Cuba will go is not yet clear. “I don’t expect a transformation of Cuban society overnight,” said Mr Obama. But he is surely right in saying that after half a century of failure in trying to isolate Cuba, it is worth trying to promote change there through engagement.

 

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CANADIAN EXPAT TELLS OF CUBA’S EUPHORIA AFTER U.S. ‘GAME CHANGER’

Posted on December 19, 2014 by Arch Ritter

TAVIA GRANT

The Globe and Mail, Friday, Dec. 19 2014, 8:03 PM EST

Original article: EUPHORIA

This week is not one Gregory Biniowsky will ever forget. The Canadian lawyer has lived in Havana for 23 years, a place where hope has regularly ebbed and flowed on expectations the United States would restore relations with the Caribbean island.

Change was always just around the corner. But it never materialized. Until Wednesday.

It was an “enormous” surprise when President Barack Obama announced the United States would normalize relations with Cuba, Mr. Biniowsky said.

Outside his home in Old Havana, church bells rang out and people cheered as Cuban President Raul Castro made his own simultaneous live broadcast confirming that three of the famed Cuban Five prisoners were released and that the two countries will renew diplomatic relations after 53 years of hostility.

Friends celebrated, some wept. Mr. Biniowsky described the mood in Cuba as euphoric.

The significance of the dramatic announcement go beyond relations between the U.S. and its much smaller next-door neighbour. Smoothing ties with Cuba will improve U.S. ties with Latin America as a whole, a region that long urged the U.S. to end its trade embargo. And it will have ripple effects on Canada’s long-standing relationship with the island, opening up both business opportunities and more competition, along with big changes in a favoured Canadian holiday destination.

“Across the political spectrum, from stalwart supporters of the Cuban revolution to intelligent opponents of the system, everybody is very happy,” Mr. Biniowsky said in a phone interview. “It’s not difficult to pick up on the extreme significance of it.”

The prospect of a lifting of the U.S. embargo on Cuba, he added, is a “game changer.”

Most poignant of all for him was hearing that Canada played a role in the fence-mending by hosting most of the secret talks over the past 18 months.

“Our government, regardless of who’s in power, has maintained a really honourable, constructive, intelligent policy towards Cuba. And the Cubans know that,” said Mr. Biniowsky, an international consultant who has advised the Canadian embassy and the United Nations in areas such as business, investment and social-impact projects.

The news made him “proud to be a Canadian,” he says, for “staying true to the tradition of being an honest broker.”

 cuba-main19nw2

U.S. and Cuban flags hang from a balcony in Old Havana yesterday. ‘Everybody is very happy,’ said Canadian expat Gregory Biniowsky.

While it will take congressional approval to end the trade embargo, Mr. Obama is pulling all the levers at his disposal to free aspects of trade and travel, including – in a key confidence-building move for foreign investors – plans to take Cuba off the U.S. list of state sponsors of terrorism.

International visitors, many of them Canadian, certainly love cheap vacations and the charm of a place where time seems to have stood still, a country free of malls and McDonald’s, where 1950s cars still cruise and Internet access is sparse and roads are still potholed.

But the reality is that Cuba’s economy is stuck. It’s hard to aspire to a better life in a country with little access to credit, convertible currencies and foreign investment. Foreign investors have shied away from the communist-run nation, not just because of its red tape, one-side legal dispute system and state-heavy approach but also for fear of U.S. reprisals. This has made it difficult to, for example, expand ports and roads or improve obsolete industrial plants or telecommunications services.

“It creates a condition of a country that can’t grow, because everything grows on credit and investment,” said Julia Sagebien, associate professor at Dalhousie University who was born in Cuba and has studied the island’s economy since 1994. She said she is “extraordinarily happy” over the changes. On her last trip in May, after four years of advising Cuba on economic reform and areas such as social enterprises and Canadian co-operative models, she was set to throw in the towel. The economy was “starting to freeze again,” she said, and only the lifting of the embargo could really get it going. Now “the patient in the coma has finally woken up,” she said. “The real rehabilitation comes now.”

Cuba is an attractive market. It’s the biggest island in the Caribbean with the largest population, at 11.2 million people. It has fertile land, a growing bio-pharma industry, thousands of new micro-enterprises and miles of beaches. And Cubans are justifiably proud of the country’s achievements with a well-educated population, long life expectancy and low crime rates. The huge income disparities visible through much of Latin America are absent in Cuba, though that has started to change with shifts in the economy, meagre public-sector wages and the growth of private businesses such as hair salons and cellphone repair shops.

Prof. Sagebien sees opportunities for Canadians – particularly in the next year before U.S. investors move in – in sectors such as infrastructure, agricultural inputs like fertilizer, equipment and parts, paper pulp, energy, mining, commercial banking and tourism. (Most U.S. citizens will still be prohibited from visiting Cuba, unless they have Cuban relatives or fit other categories including education and humanitarian workers.)

Canada and Cuba have long and colourful history. Relations date to the 1700s, when Atlantic schooners traded salt cod and potatoes for rum and sugar. Cuba was the first country in the Caribbean where Canada established a diplomatic mission and official relations began in 1945, according to the federal government’s website. Canada and Mexico were the only two countries in the hemisphere that never broke trade relations with the island. Former prime minister Pierre Trudeau struck a friendship with Fidel Castro and visited the nation in 1976. Cuba’s annual Terry Fox Run has become the world’s largest outside of Canada. The two countries retain close academic ties. And Cuba is among the top three destinations for Canadian tourists. Canada is, by far, Cuba’s largest source of tourists with more than a million visitors a year.

Mr. Biniowsky figures the U.S. will lift the travel ban ahead of the trade embargo, which could in turn double the number of tourists to the island to about six million people. That will juice the economy. And, he added, “who is going to be doing all the airport expansions, marinas, hotels and infrastructure? Well, Canadians, Europeans, Latin Americans, everyone else except for the United States. So we’ll have an interesting situation where the Cuban economy will begin to really heat up before the embargo is lifted because the travel ban will have been lifted.”

The Canadian tourism industry already sees a pick up in business in year ahead. Cuba Cruise, a new Canadian company that runs cruises that circle the island, and aim to give visitors a sense of the “Real Cuba,” said it expects increased bookings in the short term from international travellers. “eager to explore a country that is virtually free of American commercialization and chock full with charm before it might change.”

Once big U.S. cruise companies and tour operators jockey their way into the island, the picture is less clear, according to Dugald Wells, president and chief executive of Cuba Cruise. “What the competitive landscape is going to look like a year from now, that’s up to the politicians,” he said, adding that it’s with a bit of trepidation that we go forward.”

“There’s change in the air,” said Mr. Biniowsky. He cautioned that Cuba is not the easiest place to do business, but that it holds much promise. Canadians “need to get in now, position ourselves, create relations with the Cubans now, because the clock is really beginning to tick.”

He is optimistic about the future – even though it may mean growing throngs outside his house. “It will be a bit too touristy for me, and Cuba will lose a bit of its charm, because part of its charm is the lack of massive amounts of tourists. I don’t think Cubans are ready because of their infrastructure … so it’s going to be maybe a bit of a rough transition. But it’s good for the country, it’s hard currency for them.

“Let’s see how the Cubans manage – hopeful there won’t be a McDonald’s in old Havana, but we’ll see.”

grec

Gregory Biniowsky

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ABAJO CON EL BLOQUEO EN CONTRA DE LOS EMPRENDEDORES CUBANOS, TANTO EN LA HABANA COMO EN WASHINGTON

Posted on December 19, 2014 by Arch Ritter

TED A. HENKEN Y ARCHIBALD R.M. RITTER*

 Source: Abajo con el bloqueo en contra de los emprendedores cubanos, tanto en La Habana como en Washington, 14 y medio, Diciembre 13, 2014

 Original article here: Abajo con el bloqueo

En docenas de entrevistas que hicimos a empresarios cubanos durante los últimos 15 años solíamos oír dos refranes: “El ojo del amo engorda el caballo” y “el que tenga tienda que la atienda, o si no, que la venda”. El primero indica que la calidad de un bien o un servicio mejora (o “engorda”) cuando la persona que lo presta goza de autonomía y obtiene una ganancia económica. El segundo exige que el Gobierno entregue al sector privado las actividades económicas (o “tiendas”) que no ha logrado operar con efectividad, muchas de las cuales ya se practican en la economía sumergida cubana.

En otras palabras, el embargo norteamericano, que ha sido criticado mucho últimamente, no es el “bloqueo” principal que está obstaculizando la revitalización de la economía cubana. Aunque el embargo ha sido condenado constantemente (y creemos correctamente) tanto por el Gobierno cubano como por los editores de The New York Times, en la Isla es mucho más común oír críticas al “auto-bloqueo” (embargo interno) impuesto por el mismo Gobierno cubano en contra del ingenio empresarial de su propio
pueblo.

Entre 1996 y 2006, Fidel Castro dio una gradual marcha atrás a las aperturas económicas que él mismo había implementado durante el llamado Período Especial a principios de los años noventa, demostrando que estaba más preocupado por los riesgos políticos que la iniciativa empresarial popular tendría para su control centralizado que en los beneficios económicos que estos traerían a Cuba. Por eso no estuvo dispuesto a transferir más que una porción simbólica de la “tienda” estatal a los emprendedores privados.

En cambio, durante la presidencia de Raúl Castro, aunque se declara que el objetivo de los cambios económicos sigue siendo “preservar y perfeccionar el socialismo,” él ha empezado a hacerle caso a la sabiduría popular de los refranes citados arriba reduciendo el tamaño de la “tienda” estatal al transferir la producción de últiples bienes y servicios a las cooperativas y pequeñas empresas privadas. De hecho, el número de los trabajadores por cuenta propia ha aumentado de menos de 150.000 en 2010 a casi medio millón hoy.

No obstante, hace falta hacer mucho más para que los empresarios cubanos puedan contribuir plenamente al crecimiento económico. Por ejemplo, el 70% de los nuevos trabajadores por cuenta propia vienen de las filas de los “desempleados”, una cifra que indica que simplemente legalizaron sus empresas informales ya existentes, por lo que no están creando empleos que absorban a los 1,8 millones trabajadores del sector estatal despedidos por el Gobierno.

Solamente un 7% de los trabajadores por cuenta propia son universitarios y la mayoría trabajan en actividades de bajo nivel porque casi todos los empleos por cuenta propia profesionales están prohibidos. Esta prohibición resulta ser un “bloqueo” bastante eficaz que obstaculiza el uso productivo de la fuerza de trabajo cubano altamente calificada.

Para “acabar con el bloqueo” contra los empresarios cubanos y así facilitar el surgimiento de un sector privado de empresas cooperativas y de pequeña y mediana escala hay que emprender reformas más profundas y audaces. Entre estas, una apertura de las profesiones a la empresa privada; la implementación de mercados mayoristas y crédito asequibles; acabar con el fuertemente custodiado monopolio de estado sobre las importaciones, las exportaciones y la inversión; permitiendo el establecimiento de empresas de venta al detalle; y relajar la presión fiscal sobre la pequeña empresa, que actualmente discrimina a las empresas nacionales a favor de las extranjeras.

¿Tiene Raúl Castro la voluntad política para profundizar sus reformas?

La prohibición de las actividades que el Gobierno prefiere monopolizar le permite ejercer un control sobre las ciudadanos cubanos e imponer un orden aparente sobre la sociedad. Sin embargo, esto se alcanza al precio de empujar toda la actividad económica prohibida (y toda ganancia impositiva) nuevamente al mercado negro donde se desarrollaba antes del 2010.

Por el otro lado, la legalización y regulación de las muchas actividades creadas y puestas a prueba en el mercado por el creativo sector empresarial cubano crearía más puestos de trabajo, una mayor calidad y variedad de bienes y servicios a precios más bajos, al tiempo que aumenta los ingresos fiscales. Pero estos beneficios vendrían a costa de permitir una mayor autonomía económica, la concentración de riqueza y propiedad en manos privadas y abrir la competencia contra los monopolios de estado por mucho tiempo protegidos.

La viabilidad de estas reformas depende también de cambios en la política norteamericana hacia Cuba y de la política cubana hacia su diáspora, la cual ya juega un papel importante en la economía cubana como proveedores de capital inicial a través de los miles de millones de dólares que mandan cada año en remesas. Otro fenómeno cada vez más importante es el amplio coro de voces en Estados Unidos, incluyendo a muchos prominentes miembros de la comunidad cubana-americana, que reclaman una nueva política norteamericana hacia Cuba.

Al reclamar reformas económicas más profundas dentro de Cuba, también creemos que unos cambios calibrados en la política norteamericana podrían estimular la apertura del mercado al permitir más apoyo material y técnico a los nuevos empresarios cubanos. Este acercamiento responsable al cada vez más robusto sector de las pequeñas empresas independientes de Cuba, puede y de hecho debe ser permitido, para estimular la expansión de las reformas económicas de Cuba y por tanto potenciar la autonomía económica del pueblo cubano.

Si el Gobierno cubano insiste en mantener un embargo a su propio pueblo, no debemos nosotros ayudarlo con nuestro propio embargo externo. Por el contrario, deberíamos hacer lo opuesto trabajando directamente con los florecientes empresarios de Cuba.

*Ted A. Henken es Jefe del Departamento de Sociología y Antropología de Baruch College, City University of New York. Archibald R.M. Ritter es Profesor de Investigación Distinguido Emérito de Economía y Asuntos Internacionales de Carleton University, Ottawa, Canadá. Su nuevo libro, Entrepreneurial Cuba: The Changing Policy Landscape, se publica en enero de 2015. 

New Picture (4)


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EUPHORIA GRIPS CUBA AMID DOUBTS OVER DETENTE

Posted on December 19, 2014 by Arch Ritter

Marc Frank in Havana and John Paul Rathbone in London

Financial Times, December 18, 2014 6:14 pm

Original Article Here: EUPHORIA GRIPS CUBA

In 1980, Mariel was the site of a massive refugee exodus to the US. Today, however, it is better known for the $800m free trade zone and container port that opened there last year – just as Washington was midway through secret talks with Havana. These culminated with this week’s US announcement that it would ease trade sanctions against the island.

“It’s going to change things around here a lot,” said Pedro Cordero, a machine operator, as he mused about Mariel’s future and the prospect of better US trade relations. “Soon we are going to have everyone here: Brazilians, Chinese, Panamanian . . . and Americans.”

Like Mr Cordero, Cubans reacted with hope and occasional euphoria to Wednesday’s announcement by President Barack Obama that the US was in talks to re-establish diplomatic relations with Cuba and improve commercial ties after a five-decade freeze.

 “It’s great, great, great. Everyone is thrilled, happy, excited,” exclaimed Anaida Gonzales, a nurse, in the provincial capital of Camaguey, after learning the news.

Mr Obama’s move, which follows 18 months of back-channel talks, does not end the US embargo, which requires an act of Congress. Nonetheless, Havana’s decision to sink scant resources into Mariel’s modern container terminal – and to build new marinas and golf courses elsewhere – suggests Raul Castro, president, decided long ago to make an all-out effort to normalise commercial relations.

The need for the boost this would bring has grown as Mr Castro’s limited economic reforms – which include liberalising small businesses and allowing some co-operatives – have failed to kickstart Cuba’s stalled Soviet-style economy.

The economic crisis in Venezuela, Cuba’s largest benefactor, has compounded the problem. Caracas will potentially soon be unable to afford the millions of dollars worth of subsidised oil it sends to Havana each year.

The easing of US-Cuban commercial relations “sends a very strong signal to the international community about the future of the Cuban economy and also the profitability of investments, especially with the US market so near”, said Pavel Vidal, a former Cuban central bank official, who now teaches at Javeriana University in Cali, Colombia. “If investment does increase, growth could rise to five or six per cent a year.”

Mr Vidal said he expected the biggest short-term boost would come from Cuban-Americans. Under the new rules they can send $2,000 every three months to their relatives on the island – four times the current limit.

Cuba’s potential removal from the US list of national terrorist sponsors would also trigger the end of some of the financial sanctions that have deterred foreign investment and trade.

Diplomats believe Washington and Havana hope to see relations fully restored by the time Mr Obama leaves office in 2017, or by 2018, when Mr Castro has said he will step down. However, they are cautious about the prospect of the congressional approval needed to end the US embargo and about the speed of change in Cuba.

For one, the most complicated elements of Mr Castro’s reform programme are yet to be put in place — unifying Cuba’s myriad exchange rates and granting full autonomy to state enterprises. And, despite revamping its foreign investment law in July to lure business, Cuba has not announced a single new deal.

From past experience, Havana is likely to move slowly as it balances the need for economic reform against the political risks of liberalisation. “The agenda on the far side of the Florida Straits we now know in detail, but the internal one remains, as it so often does, hidden and secret,” wrote Cuban dissident blogger Yoani Sanchez from Havana.

Other Cubans voiced disquiet amid the euphoria, fearing that the rapprochement could prompt a wave of emigration by Cubans who want to take advantage of current rules that make gaining US citizenship relatively easy, amid concern that these might change.

“I’m worried about a new immigration crisis over the next few months as people rush to set foot in America,” Alexis Fernandez, a local tour guide, said.

Nonetheless, the general mood in Cuba is one of ebullience, with small-scale entrepreneurs rubbing their hands at the prospect of more US visitors and others hopeful that their daily hardships might end.

“Everyone is grinning, some people are crying,” said said Ileleny Santiesteban. “This is wonderful . . . that it will be easier for everyone in the future, here and over there. That, maybe, it is finally over.”

What happens next

Travel and commerce American internet and telecoms companies, as well as banks, will be able to start doing business with Cuba. US visitors will be able to bring back $100 worth of cigars, writes Geoff Dyer.

Official meetings Roberta Jacobson, US assistant secretary of state for the western hemisphere, will visit Havana in January. John Kerry, secretary of state, will likely follow soon after and the White House has not ruled out a presidential visit.

A new embassy The US already has a large Interests Section in Havana. It wants to upgrade this into a proper embassy.

US Congress Some leading Republicans in Congress, who are deeply critical of the opening to Cuba, have threatened to block funding for an embassy and to hold up nomination of an ambassador.

Sanctions President Obama went almost as far as he could within the law in reducing restrictions on dealing with Cuba, but ultimately a real relaxation of the embargo will require approval of a Congress that contains many sceptics.

mariel.jpg 2Old Mariel

mariel

The New Mariel Container Port

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Sagebien & Spadoni: TWO ARTICLES ON THE IMPACTS OF US-CUBA NORMALIZATION ON CANADAIAN BUSINESS WITH CUBA

Posted on December 18, 2014 by Arch Ritter

Below are links to two articles by Julia Sagebien and Paulo Spadoni on the impacts of US-Cuba normalization on Canadian business relations with Cuba.

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O CANADA, WILL CUBA STAND ON GUARD FOR THEE? PREPARING FOR THE END OF THE US EMBARGO ON CUBA       

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WILL THEY STILL LOVE US TOMORROW? CANADA-CUBA BUSINESS RELATIONS AND THE END OF THE CUBAN EMBARGO

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WHITE HOUSE PRESS REPORT ON THE SPECIFIC MEASURES TAKEN BY PRESIDENT OBAMA ON NORMALIZATION WITH CUBA

Posted on December 18, 2014 by Arch Ritter

Original here: SPECIFIC MEASURES; http://www.whitehouse.gov/the-press-office/2014/12/17/fact-sheet-charting-new-course-cuba; 17 December 2014

cuba_page_header_02Obama on the Phone with Raul Castro, December 17, 2014

Key Components of the Updated Policy Approach:

Since taking office in 2009, President Obama has taken steps aimed at supporting the ability of the Cuban people to gain greater control over their own lives and determine their country’s future. Today, the President announced additional measures to end our outdated approach, and to promote more effectively change in Cuba that is consistent with U.S. support for the Cuban people and in line with U.S. national security interests. Major elements of the President’s new approach include:

Establishing diplomatic relations with Cuba-

  • The President has instructed the Secretary of State to immediately initiate discussions with Cuba on the re-establishment of diplomatic relations with Cuba, which were severed in January 1961.
  • In the coming months, we will re-establish an embassy in Havana and carry out high-level exchanges and visits between our two governments as part of the normalization process. As an initial step, the Assistant Secretary of State for Western Hemisphere Affairs will lead the U.S. Delegation to the next round of U.S.-Cuba Migration Talks in January 2015, in Havana.
  • U.S. engagement will be critical when appropriate and will include continued strong support for improved human rights conditions and democratic reforms in Cuba and other measures aimed at fostering improved conditions for the Cuban people.
  • The United States will work with Cuba on matters of mutual concern and that advance U.S. national interests, such as migration, counternarcotics, environmental protection, and trafficking in persons, among other issues.

Adjusting regulations to more effectively empower the Cuban people-

  • The changes announced today will soon be implemented via amendments to regulations of the Departments of the Treasury and Commerce. Our new policy changes will further enhance our goal of empowering the Cuban population.
  • Our travel and remittance policies are helping Cubans by providing alternative sources of information and opportunities for self-employment and private property ownership, and by strengthening independent civil society.
  • These measures will further increase people-to-people contact; further support civil society in Cuba; and further enhance the free flow of information to, from, and among the Cuban people. Persons must comply with all provisions of the revised regulations; violations of the terms and conditions are enforceable under U.S. law.

Facilitating an expansion of travel under general licenses for the 12 existing categories of travel to Cuba authorized by law-

  • General licenses will be made available for all authorized travelers in the following existing categories: (1) family visits; (2) official business of the U.S. government, foreign governments, and certain intergovernmental organizations; (3) journalistic activity; (4) professional research and professional meetings; (5) educational activities; (6) religious activities; (7) public performances, clinics, workshops, athletic and other competitions, and exhibitions; (8) support for the Cuban people; (9) humanitarian projects; (10) activities of private foundations or research or educational institutes; (11) exportation, importation, or transmission of information or information materials; and (12) certain export transactions that may be considered for authorization under existing regulations and guidelines.
  • Travelers in the 12 categories of travel to Cuba authorized by law will be able to make arrangements through any service provider that complies with the U.S. Treasury’s Office of Foreign Assets Control (OFAC) regulations governing travel services to Cuba, and general licenses will authorize provision of such services.
  • The policy changes make it easier for Americans to provide business training for private Cuban businesses and small farmers and provide other support for the growth of Cuba’s nascent private sector. Additional options for promoting the growth of entrepreneurship and the private sector in Cuba will be explored.

Facilitating remittances to Cuba by U.S. persons-

  • Remittance levels will be raised from $500 to $2,000 per quarter for general donative remittances to Cuban nationals (except to certain officials of the government or the Communist party); and donative remittances for humanitarian projects, support for the Cuban people, and support for the development of private businesses in Cuba will no longer require a specific license.
  • Remittance forwarders will no longer require a specific license.

Authorizing expanded commercial sales/exports from the United States of certain goods and services-

  • The expansion will seek to empower the nascent Cuban private sector. Items that will be authorized for export include certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment for small farmers. This change will make it easier for Cuban citizens to have access to certain lower-priced goods to improve their living standards and gain greater economic independence from the state.

Authorizing American citizens to import additional goods from Cuba-

  • Licensed U.S. travelers to Cuba will be authorized to import $400 worth of goods from Cuba, of which no more than $100 can consist of tobacco products and alcohol combined.

Facilitating authorized transactions between the United States and Cuba-

  • U.S. institutions will be permitted to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions.
  • The regulatory definition of the statutory term “cash in advance” will be revised to specify that it means “cash before transfer of title”; this will provide more efficient financing of authorized trade with Cuba.
  • U.S. credit and debit cards will be permitted for use by travelers to Cuba.
  • These measures will improve the speed, efficiency, and oversight of authorized payments between the United States and Cuba.

Initiating new efforts to increase Cubans’ access to communications and their ability to communicate freely-

  • Cuba has an internet penetration of about five percent—one of the lowest rates in the world. The cost of telecommunications in Cuba is exorbitantly high, while the services offered are extremely limited.
  • The commercial export of certain items that will contribute to the ability of the Cuban people to communicate with people in the United States and the rest of the world will be authorized. This will include the commercial sale of certain consumer communications devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems.
  • Telecommunications providers will be allowed to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and internet services, which will improve telecommunications between the United States and Cuba.

Updating the application of Cuba sanctions in third countries-

  • U.S.-owned or -controlled entities in third countries will be generally licensed to provide services to, and engage in financial transactions with, Cuban individuals in third countries. In addition, general licenses will unblock the accounts at U.S. banks of Cuban nationals who have relocated outside of Cuba; permit U.S. persons to participate in third-country professional meetings and conferences related to Cuba; and, allow foreign vessels to enter the United States after engaging in certain humanitarian trade with Cuba, among other measures.

Pursuing discussions with the Cuban and Mexican governments to discuss our unresolved maritime boundary in the Gulf of Mexico-

  • Previous agreements between the United States and Cuba delimit the maritime space between the two countries within 200 nautical miles from shore. The United States, Cuba, and Mexico have extended continental shelf in an area within the Gulf of Mexico where the three countries have not yet delimited any boundaries.
  • The United States is prepared to invite the governments of Cuba and Mexico to discuss shared maritime boundaries in the Gulf of Mexico.

Initiating a review of Cuba’s designation as a State Sponsor of Terrorism-

  • The President has instructed the Secretary of State to immediately launch such a review, and provide a report to the President within six months regarding Cuba’s support for international terrorism. Cuba was placed on the list in 1982.

Addressing Cuba’s participation in the 2015 Summit of the Americas in Panama-

  • President Obama will participate in the Summit of the Americas in Panama. Human rights and democracy will be key Summit themes. Cuban civil society must be allowed to participate along with civil society from other countries participating in the Summit, consistent with the region’s commitments under the Inter-American Democratic Charter. The United States welcomes a constructive dialogue among Summit governments on the Summit’s principles.

Unwavering Commitment to Democracy, Human Rights, and Civil Society

A critical focus of our increased engagement will include continued strong support by the United States for improved human rights conditions and democratic reforms in Cuba. The promotion of democracy supports universal human rights by empowering civil society and a person’s right to speak freely, peacefully assemble, and associate, and by supporting the ability of people to freely determine their future. Our efforts are aimed at promoting the independence of the Cuban people so they do not need to rely on the Cuban state.

The U.S. Congress funds democracy programming in Cuba to provide humanitarian assistance, promote human rights and fundamental freedoms, and support the free flow of information in places where it is restricted and censored. The Administration will continue to implement U.S. programs aimed at promoting positive change in Cuba, and we will encourage reforms in our high level engagement with Cuban officials.

The United States encourages all nations and organizations engaged in diplomatic dialogue with the Cuban government to take every opportunity both publicly and privately to support increased respect for human rights and fundamental freedoms in Cuba.

Ultimately, it will be the Cuban people who drive economic and political reforms. That is why President Obama took steps to increase the flow of resources and information to ordinary Cuban citizens in 2009, 2011, and today. The Cuban people deserve the support of the United States and of an entire region that has committed to promote and defend democracy through the Inter-American Democratic Charter.

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TEXTO COMPLETO DEL DISCURSO DE RAÚL CASTRO SOBRE EL ACERCAMIENTO CON ESTADOS UNIDOS: Alocución del Presidente cubano: Los Cinco ya están en Cuba, 17 diciembre 2014

Posted on December 18, 2014 by Arch Ritter

Granma, 18 diciembre de 2014

Raul-CastroCompatriotas:

Desde mi elección como Presidente de los Consejos de Estado y de Ministros, he reiterado en múltiples ocasiones, nuestra disposición a sostener con el gobierno de los Estados Unidos un diálogo respetuoso, basado en la igualdad soberana, para tratar los más diversos temas de forma recíproca, sin menoscabo a la independencia nacional y la autodeterminación de nuestro pueblo.

Esta es una posición que fue expresada al Gobierno de Estados Unidos, de forma pública y privada, por el compañero Fidel en diferentes momentos de nuestra larga lucha, con el planteamiento de discutir y resolver las diferencias mediante negociaciones, sin renunciar a uno solo de nuestros principios.

El heroico pueblo cubano ha demostrado, frente a grandes peligros, agresiones, adversidades y sacrificios, que es y será fiel a nuestros ideales de independencia y justicia social. Estrechamente unidos en estos 56 años de Revolución, hemos guardado profunda lealtad a los que cayeron defendiendo esos principios desde el inicio de nuestras guerras de independencia en 1868.

Ahora, llevamos adelante, pese a las dificultades, la actualización de nuestro modelo económico para construir un socialismo próspero e sostenible.

Resultado de un diálogo al más alto nivel, que incluyó una conversación telefónica que sostuve ayer con el Presidente Barack Obama, se ha podido avanzar en la solución de algunos temas de interés para ambas naciones.

Como prometió Fidel, en junio del 2001, cuando dijo: ¡Volverán!, arribaron hoy a nuestra Patria, Gerardo, Ramón y Antonio.

La enorme alegría de sus familiares y de todo nuestro pueblo, que se movilizó infatigablemente con ese objetivo, se extiende entre los cientos de comités y grupos de solidaridad; los gobiernos, parlamentos, organizaciones, instituciones y personalidades que durante estos 16 años reclamaron e hicieron denodados esfuerzos por su liberación. A todos ellos expresamos la más profunda gratitud y compromiso.

Esta decisión del Presidente Obama, merece el respeto y reconocimiento de nuestro pueblo.

Quiero agradecer y reconocer el apoyo del Vaticano, y especialmente, del Papa Francisco, al mejoramiento de las relaciones entre Cuba y Estados Unidos. Igualmente, al Gobierno de Canadá por las facilidades creadas para la realización del diálogo de alto nivel entre los dos países.

A su vez, decidimos excarcelar y enviar a Estados Unidos a un espía de origen cubano que estuvo al servicio de esa nación.

Por otra parte, basados en razones humanitarias, hoy también fue devuelto a su país el ciudadano norteamericano Alan Gross.

De manera unilateral, como es nuestra práctica y en estricto apego a nuestro ordenamiento legal, han recibido beneficios penales los reclusos correspondientes, incluida la excarcelación de personas sobre las que el Gobierno de los Estados Unidos había mostrado interés.

Igualmente, hemos acordado el restablecimiento de las relaciones diplomáticas.

Esto no quiere decir que lo principal se haya resuelto. El bloqueo económico, comercial y financiero que provoca enormes daños humanos y económicos a nuestro país debe cesar.

Aunque las medidas del bloqueo han sido convertidas en Ley, el Presidente de los Estados Unidos puede modificar su aplicación en uso de sus facultades ejecutivas.

Proponemos al Gobierno de los Estados Unidos adoptar medidas mutuas para mejorar el clima bilateral y avanzar hacia la normalización de los vínculos entre nuestros países, basados en los principios del Derecho Internacional y la Carta de las Naciones Unidas.

Cuba reitera su disposición a sostener cooperación en los organismos multilaterales, como la Organización de Naciones Unidas.

Al reconocer que tenemos profundas diferencias, fundamentalmente en materia de soberanía nacional, democracia, derechos humanos y política exterior, reafirmo nuestra voluntad de dialogar sobre todos esos temas.

Exhorto al Gobierno de los Estados Unidos a remover los obstáculos que impiden o restringen los vínculos entre nuestros pueblos, las familias y los ciudadanos de ambos países, en particular los relativos a los viajes, el correo postal directo y las telecomunicaciones.

Los progresos alcanzados en los intercambios sostenidos demuestran que es posible encontrar solución a muchos problemas. Como hemos repetido, debemos aprender el arte de convivir, de forma civilizada, con nuestras diferencias.

Sobre estos importantes temas volveremos a hablar más adelante.

Muchas gracias.

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OBAMA OPENS THE DOOR, BUT CUBA HAS TO WALK THROUGH IT

Posted on December 18, 2014 by Arch Ritter

Globe editorial; The Globe and Mail; Dec. 17 2014,

Original Here:  Obama Opens The Door

President Barack Obama’s announcement that the United States will normalize diplomatic relations with Cuba is the beginning of the end of a standoff that has outlived its usefulness. Mr. Obama deserves praise for doing what he can within the limits of his executive powers to break the ice. But the onus on making this work doesn’t lie with the U.S. – it is the Castro regime that will either prove itself willing to join the 21st century or blow an opportunity to improve the lives of its people.

Cuba is a dictatorship. The media are state-controlled. Internet access is illegal without a permit. The government jails political prisoners in brutal conditions. As well, its economy is centrally planned, with only limited recent forays into private-sector employment. The average monthly wage is about $20 (U.S.) per month. Its state-run monopolies are as inefficient and corrupt as you’d expect.

And, yet, it has plenty of willing trading partners, including Canada (which played silent host to the talks that led to Wednesday’s announcement), Russia, India and the EU. But Cuba’s dictatorship has maintained its hold on absolute power by portraying itself as the brave resister of the U.S. trade embargo begun in 1961 during the Cold War. If it has imprisoned its own people in a political and economic time warp, it has done so in the name of fighting an “imperial” power. As if.

It’s a useful overstatement to claim that the embargo has held back the country’s economic growth and prevented it from becoming more democratic. That was the choice of the Castro regime. The fact that the country has taken steps toward liberalization since 2006, when the ailing Fidel Castro transferred power to his brother Raul, is proof that Cuba controls its future, and always did.

The embargo is still in place, for now. Mr. Obama can’t lift it unilaterally; it will take an act of Congress to do that, and the Republican majority will oppose it unless there are convincing signs from Cuba that it is moving toward democracy.

But the opening of an American embassy in Havana is a positive step, as is the lifting of travel and financial restrictions that will allow for limited U.S. investment. The more access Cuba has to the world, the harder it will be for the government to keep its people trapped in the past.

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