• The objective of this Blog is to facilitate access to research resources and analyses from all relevant and useful sources, mainly on the economy of Cuba. It includes analyses and observations of the author, Arch Ritter, as well as hyper-links, abstracts, summaries, and commentaries relating to other research works from academic, governmental, media, non-governmental organizations and international institutions.
    Commentary, critique and discussion on any of the postings is most welcome.
    This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' original blog "Generation Y" this is not dedicated to those with names starting with the letter "A". Instead, it draws from Douglas Coupland's novel Generation A which begins with a quotation from Kurt Vonnegut at a University Commencement:
    "... I hereby declare you Generation A, as much as the beginning of a series of astounding triumphs and failures as Adam and Eve were so long ago."

CUBA STANDARD, ECONOMIC REPORT 2015, First Quarter

Pavel Vidal, Chief Economist and Johannes Werner, Editor

Original here: Economic Report 2015

EXECUTIVE SUMMARY

•The year 2015 has begun with hopes for economic improvement, based on the speeches by Presidents Barack Obama and Raúl Castro on Dec. 17. Given the new tone in bilateral relations and the measures announced by the U.S. government, favorable impacts are expected on tourism, on the private sector, and on the overall functioning of the Cuban economy. We estimate that the way in which Cuba’s GDP growth will be most favored by the new measures is through investment. The new optimism awakened among businesspeople could propel foreign investment on the island.

•In this first quarter of 2015, we are presenting the Cuba Standard Business Confidence Survey, the first poll of this kind used in Cuba. Half of respondents (50.5%) said that their company has increased its intentions to invest in Cuba. Sixty-one percent of respondents believe that economic conditions on the island will improve in the coming 12 months.

•Survey takers were asked to mark the five biggest obstacles to developing and expanding their business in Cuba. The three factors that were selected by most respondents were government bureaucracy (62.2%), excess of regulations (49.5%), and guarantees and legal procedures (43.4%). None of the three factors refers to clear economic problems, but rather to the quality of institutions in the Cuban system.

•Despite the opening of new opportunities in global markets, we foresee slow reaction speed by the Cuban authorities to the new scenarios and institutional weaknesses that will delay Cuba’s international insertion.

•The Cuban authorities have made evident their optimism regarding the macro economy and the main sectors in their perspectives for 2015. The government is planning an acceleration of GDP growth from 1.3% in 2014 to 4% in 2015. Again, the GDP growth plan is based on a “spectacular” acceleration of investments; this year, the government expects an expansion of investments by 27%.

•We also predict an acceleration of GDP growth in 2015, albeit somewhat less optimistic than the government. Our forecast of 3.4% is based mainly on the possible rebound of investments (even if they don’t match the plan), improved access to external financing (thanks to foreign debt renegotiation agreements the government is pursuing), and the benefits of a relaxation of import and fiscal spending controls

•The Cuba Standard Economic Trend Index (CSETI) indicates that the favorable effects of the new international scenario have not impacted yet the Cuban economy. The February 2015 estimate is -0.14, which suggests that balance-of-payment conditions continue to be unfavorable for GDP growth. Even so, they are less negative that those of the first half of 2014.

z1

CONTENTS

Executive Summary

I. Structural and institutional reforms

Entering the eighth year of Raúl Castro’s reforms

Cuba Standard Business Confidence Survey

“Rational optimism” towards the Obama administration’s new policy

New procedures for investments

II. Real sector

Official projections for 2015

Business climate and balance-of-payment conditions in the first quarter of 2015

Uncertainty about future GDP growth

III. Economic policies

Monetary reform continues to be delayed, and new ‘noises’ are heard

Salary expansion and doubts about inflation data

IV. Key macroeconomic indicators

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POLL: CUBAN AMERICANS FAVOR OBAMA’S POLICY OVER RUBIO’S

Original Essay: Cuban Americans: Obama over Rubio and Cruz zzzzzzz CUBA STANDARD

Bad news for Marco Rubio and Ted Cruz: Most Cuban Americans support President Barack Obama’s normalization policy with Cuba, suggests a poll published by Miami-based Bendixen & Amandi International on Dec. 17, the anniversary of the normalization announcement by the presidents of the United States and Cuba.

The survey’s results suggest that presidential candidates Marco Rubio and Ted Cruz, both Cuban American Republicans espousing hardline views of U.S.-Cuba relations, do not represent the majority views of the Cuban community in the United States.

According to the poll, a clear 56% majority support Obama’s normalization policy, 12% more than a year ago, and 53% of Cuban Americans would like to see the embargo lifted, 9% more than last year. The majority is larger among younger Cuban Americans: Sixty-six percent of those age 18-49 favor an end of U.S. sanctions.

Bendixen conducted the survey Dec. 14-16 among 400 Cuban Americans. Florida, a center for histórico exiles who have been driving the U.S. sanctions policy, polls less favorable for Obama’s policy than the rest of the United States. Only 41% of Cuban Americans living in Florida said they had a favorable impression of normalization policies, compared to 56% of Cuban Americans living elsewhere in the United States. Despite broad support for his policy, 52% of Cuban Americans said they would oppose a trip to Cuba by Obama.

The U.S. president announced this month that he would like to visit the island, on condition of progress by the Cuban government on human rights issues.

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CUBAN BASEBALL CRISIS: THE DOWNSIDE OF WARMING RELATIONS WITH AMERICA

The Economist, December 18, 2015

Original Essay: Cuban Baseball Crisis

zzzzThe Havana Sugar Kings of the old International League, circa 1956

LOOK for the Che Guevara mural on a pitch-black street corner in Lawton, a run-down district on the outskirts of Havana. Turn left, walk up the concrete steps and give the password (today it’s “I sell green dwarfs”). Inside, around 20 Cuban men sit silently. Despite the humidity, the ceiling fan is still, allowing puffs of sweet tobacco smoke to hover in the flickering fluorescent light. The newcomers are asked for a “solidarity contribution” of 25 Cuban pesos, or $1. After the customary first drops are spilled to sate the thirst of the saints, a $3 bottle of clear rum makes its way around.

It could easily be a clandestine political gathering. But this group has far more important business: the first game in the Major League Baseball (MLB) semi-final series between the Kansas City Royals and Toronto Blue Jays. For half a century after Cuba’s revolution in 1959, the island’s sports fans knew little of professional leagues beyond their shores. But today, thanks to the internet’s belated arrival and a wave of Cuban players defecting and starring in MLB, in-depth knowledge of American baseball is a badge of honour for baseball-loving Cubans—that is, nearly all the men and plenty of the women, too. “You didn’t know Kansas City won? You’re an embarrassment,” one attendee teased a friend during the ride to Lawton in an exhaust-spewing 1950s taxi, whose shock absorbers were no match for the area’s cavernous potholes.

The easiest way for Cubans to follow MLB in real time is at hotel bars in Vedado, a central Havana district packed with middle-aged American tourists taking advantage of the recent relaxation of travel restrictions. But few Cubans can afford a beer priced in dollars. And if a woman happens to be running a shift at the bar, locals say, there’s always a risk she will put a soap opera on the TV instead. So baseball fans gather in speakeasies like this decrepit flat, whose owner has managed to acquire an illegal satellite broadcast signal and hook it up to his 1980s Japanese television.

The group try to keep quiet, lest the neighbours snitch to the local Committee for the Defence of the Revolution (a network of government informants in every town). But they are rooting for the Royals because of the team’s first baseman, Kendrys Morales, who fled Cuba on a raft in 2004 after serving several stints in jail for his seven previous failed escape attempts. Every time he comes up to bat they allow themselves a muffled cheer. A round of high-fives follows Kansas City’s 5-0 victory.

The next day a big game is scheduled in the domestic baseball league, at Havana’s rickety 55,000-seat Latin American Stadium. It pits the hometown Industriales, Cuba’s answer to the New York Yankees, against a visiting club from nearby Matanzas. A few years ago the stands would have been packed. But today the outfield bleachers are empty, and only the rows of seats closest to the action appear even half-full. Bored-looking police drag on cigarettes. A group of hometown fans tries to rouse the crowd by blaring on hand-held air horns, but it is well short of critical mass.

One reason for the apathetic mood is that the government has banned alcohol sales in stadiums to stop fights. A bigger problem is the poor quality of the play. Last year 11 Industriales players left for the United States; Matanzas lost ten. Only the weaker players remain, and they are demoralised: runners seem content to jog around the basepaths, and fielders let the ball skip past them on difficult plays. In recognition of the depleted rosters, the Cuban league now disbands half of its teams at mid-season and shares their players among the eight clubs that are doing best.

Today’s game is painfully lopsided, as the Matanzas hitters pound the Industriales starting pitcher for seven runs. The biggest attraction is Rey Ordóñez, who defected in 1993, played in MLB for nine years and is catching a game on a visit home. Fans pose with him for pictures. “It’s very hard for the team,” says Lourdes Gourriel junior, the 21-year-old shortstop for the Industriales, following his team’s defeat. “It’s weird seeing someone on TV [in MLB], and just yesterday they were here with you. But that’s everyone’s individual decision. We’re still friends with those who left.”

South American football fans are accustomed to their countries’ brightest sporting stars decamping to richer European leagues. But for Cuban baseball fans the exodus is new. Less than a year after the United States and the government of Raúl Castro, Fidel’s younger brother and successor, announced they would re-establish diplomatic relations, this brawn drain is the most visible consequence of rapprochement with the yanquis, and an indication of what might be lost as the Cuban economy liberalises.

BOTTOM OF THE NINETEENTH CENTURY

Although baseball originated in the United States, the sport arrived in Cuba during its infancy in the 1860s. Within a decade of the first recorded match on the island, Cuba had established the first professional league outside America and put its adopted national game at the service of political aims: the league’s organisers funnelled its profits to guerrilla groups fighting for independence from Spain, and the movement’s spies posed as baseball players when shuttling messages and funds to and from supporters in the United States. “Baseball is more Cuba’s national pastime than it is America’s,” says Roberto González Echevarría, the author of a history of Cuban baseball. “It was considered modern, democratic and American, while the Spaniards had bullfighting, which was retrograde and barbaric. It’s as if the American Founding Fathers had been wielding Louisville Sluggers [an iconic brand of bat].”

After Cuba gained its independence in 1902 baseball became one of its principal means of exercising soft power. It was Cuban athletes, not American soldiers, who spread the sport across the Spanish-speaking Caribbean, helping to form a shared cultural identity with the Dominican Republic, Puerto Rico, Venezuela and eastern Mexico, and earning the Cuban players the nickname the “apostles of baseball”. And it was baseball players who became the best-known Cubans in the United States. Of all the MLB players born in Latin America who started playing before 1959, two-thirds were Cuban, even though most of the island’s stars were black and banned from MLB until the league’s colour barrier was broken in 1947. (In 1912, in response to inquiries about the lineage of two olive-skinned Cuban players, the Cincinnati Reds conducted an “investigation” which declared them “two of the purest bars of Castilian soap [that] ever floated to these shores”.) During the same period Cuba was putting black and white talent on the same fields in its racially integrated winter league, establishing the country as an exemplar of moral leadership in sports.

After Fidel Castro (pictured, swinging) took power and became the island’s baseball-fan-in-chief, the sport’s tacit political role became explicit. He proclaimed athletes to be “standard-bearers of the revolution playing for the love of the people, not money”. He banned professional sports and founded the National Series, a wildly popular amateur league in which each province fielded a team of players from its territory. He also established a formidable player-development system, with scouts identifying talented children and academies to train them once they became teenagers.

American fans, who then, as now, paid attention only to MLB, were unaware of the stars Cuba was producing, since they never played for a team in the United States. But Cuba’s athletic assembly line yielded a national team that dominated the weak competition in international events like the Olympics (in which MLB players do not participate): from 1987 to 1997, the squad won 156 straight games. The elder Mr Castro made such successes central to his propaganda strategy. “The only way Cuba could raise its head in the world was in sports,” says Ismael Sené, who ran the sports department of the Communist Youth in the early 1960s. “There was a campaign against us from the outside, saying that we were all needy, that we didn’t have food. Well, look at our athletes!” The fact that baseball, America’s “national pastime”, was Cuba’s strong suit made each victory extra sweet.

Fidel Castro might be proud of Cuba’s ability to export baseball players, were they not going to America

But setting so much store by its baseball players left the government vulnerable to shifting geopolitics. In 1991 René Arocha, a pitcher in the national team, walked out of his hotel room during a tournament in Miami, made his way to his aunt’s house, and never returned, making him the first team member to defect in history. He had not been planning on playing baseball afterwards, because he had assumed that MLB players were far superior to Cuban ones. But after connecting with a Cuban-born agent, he was given an MLB contract with a six-figure salary, and the next year became the St Louis Cardinals’ second-best pitcher.

After Mr Arocha had proved that Cuban players were of MLB quality, and the fall of the Soviet Union plunged Cuba into a “special period” of unprecedented poverty, more defectors began to leak out. Two half-brothers, Liván and Orlando Hernández, left the island separately in the 1990s, one at a tournament, the other on a rickety boat. Both played starring roles for World Series champions in their first years in MLB, providing Miami’s Castro-hating exiles with a remarkable narrative about the risks Cubans will take for a taste of freedom and the chance to play America’s game. To reduce the risk of further defections, the Cuban team put its players under tight surveillance whenever they travelled abroad, making their national treasures feel like prisoners and encouraging more defections.

SQUEEZE PLAY

The government responded to early defections with stoicism. “When one leaves, another ten better players emerge,” Fidel Castro once said. But in the past few years, the trickle of defections has become a torrent. As recently as 2007 there were just ten Cubans in MLB. Today there are 27. And whereas some of the early defectors had undistinguished careers, the current crop is aking an impact that, were it to occur anywhere but in the reviled United States, Fidel Castro would probably regard as his greatest accomplishment. Yoenis Céspedes, a burly outfielder with a pronounced uppercut swing, single-handedly powered the New York Mets to the World Series this year. His deadly accurate throws to home plate from distances of 300 feet (91 metres) or more have earned him the nickname the Cuban Missile. José Fernández, who fished his mother out of the ocean after a wave swept her overboard during their escape to Mexico when he was 15, is the toast of Miami’s Little Havana for his unhittable array of blazing fastballs and knee-bending curves. Aroldis Chapman holds the record for the fastest pitch in MLB history at 105 miles (169km) per hour. At the “Esquina Caliente” (Hot Corner), a bench in a downtown Havana park where die-hard fans have gathered daily for decades to talk baseball, the regulars today come prepared with the latest statistics on how Cuban players—and even the American-born children of Cuban exiles—are performing in MLB. They use websites like CubanPlay, a new, locally run site, by connecting their phones to public hotspots accessible with $2-an-hour Wi-Fi cards.

Major-league success has been accompanied by major-league riches: the 27 Cuban MLB players earn an aggregate annual salary of $100m. As the rewards have grown, a sophisticated infrastructure to smuggle more players has built up. Almost all recent defectors have escaped with the help of sinister human-trafficking syndicates. These hire boats to bring players to nearby countries, bribe the Cuban coastguard to let them depart, and Dominican or Mexican authorities to grant residency papers, pay tribute to organised-crime groups for the right to operate on their turf, and hold players hostage until they sign an MLB contract and provide a return on the gangsters’ investment, perhaps from their signing bonus. Yasiel Puig, a star right fielder, was held at a motel in Mexico’s Yucatán peninsula for months while his captors, associated with the fearsome Zetas mafia, argued over payment. Leonys Martín, an outfielder, was held at gunpoint in Mexico and forced to sign a contract in which he promised to pay 30% of his earnings to a front company; his smugglers are now in a Florida jail.

Since Raúl Castro became Cuba’s president in 2006, he has cautiously tried to relax state controls. But the defections have forced the pace when it comes to baseball. In 2013 Cuba said it would allow athletes to play professionally in foreign leagues—if they paid a 20% tax and returned for international tournaments and the winter National Series. A handful have gone to the Japanese league in the summer and earned seven-figure salaries.

Both MLB and the Cuban government now say they want a “normalised” system, in which Cuban athletes can travel to America legally and safely, play for MLB teams on a work visa and return home in the off-season. Antonio Castro, one of Fidel’s nine acknowledged children, an international baseball official and the national team’s doctor, has publicly called for such a change.

In an echo of the 1970s “ping-pong diplomacy” in which table tennis helped restore relations between the United States and China, MLB is encouraging a thaw between Havana and Washington. It has applied for an American government licence to do business in Cuba, is sending former players on a pre-Christmas goodwill tour of the island and is trying to organise an exhibition game in Havana featuring one of its teams next March. Meanwhile, Cuban baseball stars are giving Americans a new perspective on a country many perceive as nothing more than a totalitarian dystopia.

Yet the defections continue, for two reasons. The first is that the Cuban baseball authorities’ proclamations that players are now “free to go” ring hollow. It is the government, not athletes, that determines who can leave and for how long, to which country and team, and how much they will be paid. It generally selects older stars who have shown loyalty to the regime.

The second is the continuing influence of ageing “cold warriors” in the United States. Although Barack Obama has streamlined much of the bureaucracy required to authorise contracts with Cuban players, they must still establish residency outside Cuba and sign an affidavit saying that they “do not intend to, nor would [they] be welcome to, return to Cuba”. And America’s trade embargo, which can only be lifted by Congress, bans transactions with the Cuban government. That precludes any arrangement in which athletes would pay a modest tax on their foreign earnings in recognition of the state’s investment in training them, just as the United States taxes its citizens on their worldwide income. Cuba’s requirement that its players working abroad also participate in the National Series and be available to the national team represents another stumbling block, since MLB clubs would never allow their stars to skip out for an international tournament during the season, or risk injury during a long winter campaign in Cuba.

 

Yet for all the Cuban government’s rhetoric about America’s athletic imperialism, it may have an unlikely ally in MLB on the issues that concern it most. Despite MLB’s reputation as a fiercely capitalist industry worth $9 billion a year, the game’s economic model has much in common with Cuban-style socialist principles. To maintain fans’ interest, MLB needs a competitive balance between its rich and poor clubs. It accomplishes this by levying a tax on teams with high payrolls, and via an annual draft that routes the best young players to losing franchises. Cuban players aged over 23 with at least five years in the National Series are exempt from these rules. That enables them to auction their services to the highest bidder, undermining MLB’s carefully calibrated system of economic redistribution and reducing club owners’ profits. As a result, MLB is likely to advocate a tightly controlled system of acquiring Cuban players, rather than a free-for-all.

Moreover, MLB clubs and agents are already warning that after so many defections, the Cuban baseball pipeline is running dry and will need to be replenished. At the Premier 12, an international tournament held last month in Taiwan and Japan, Cuba finished an embarrassing sixth. The unique baseball culture Cuba has developed over 50 years of isolation has proved to be a formidable manufacturer of outstanding players. The Dominican Republic and Venezuela serve as providers of raw athletic material for MLB. Ordinary Cubans, by contrast, have grown accustomed to a remarkable closeness to world-class athletes, who play only for their home provinces and for almost no pay. “I’m just another fan,” says Reinier Reynoso, a 27-year-old pitcher for Industriales who is hanging out with the faithful outside the ballpark before a game. Fans and players “party together”, he says.

Since MLB has a keen interest in producing a new generation of Cuban superstars, it is reluctant to meddle with this potent combination of popular encouragement and state support. “We have no interest in going to Cuba and taking all of their players,” says Dan Halem, MLB’s chief legal officer. “We want Cuban baseball to thrive. We’re perfectly happy for Cuba to develop their own stars and keep them for a period of time. If they lose all their stars, fans will lose interest. There aren’t enough countries where baseball is played for this to just be a feeder for Major League Baseball.”

zzzzzzA recent friendly game

zzzzzWorld champions many times over

CASTRO AT BAT 1977

A Cuban baseball star

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CHINA AND CUBA: 160 YEARS AND LOOKING AHEAD

Mao Xianglin, Adrian H. Hearn and Liu Weiguang

Latin American Perspectives, November 2015

Original Essay: http://lap.sagepub.com/content/42/6/140.full.pdf+html

Abstract

Sino-Cuban relations have deepened rapidly since the beginning of the twenty-first century, propelled by both political ideology and economic interests. A shared commitment to socialism with “local characteristics” has enabled the pursuit of an unusually broad range of cooperative initiatives. These include Chinese investment in the Cuban nickel and oil sectors, educational and medical exchange programs, the development of tourism, and engagement with the Chinese diaspora on the island. Data from Chinese sources on these spheres of engagement reflect an attempt to address contemporary needs with a blend of state and market forces. The intensification of Sino-Cuban relations over the past decade poses no challenge to the United States; on the contrary, it opens new opportunities for trilateral cooperation.

Las relaciones sino-cubanos se han profundizado rápidamente desde comienzos del siglo XXI, impulsadas tanto por ideología política como por intereses económicos. Un compromiso compartido al socialismo con “características locales” ha permitido la consecución de una gama inusualmente amplia de iniciativas cooperativas. Éstas incluyen la inversión china en sectores cubanos de níquel y petróleo, programas de intercambio educacionales y médicos, el fomento de turismo, y la interacción con la diáspora china en la isla. Datos de fuentes chinas sobre estos ámbitos de interacción reflejan un intento de abordar necesidades contemporáneas con una mezcla de fuerzas estatales y del mercado. La profundización de relaciones sino-cubanas en recientes décadas no presenta ningún desafío a los Estados Unidos; al contrario, abre nuevas oportunidades de cooperación trilateral.

zzzChinese President Xi Jinping (L) is awarded Cuba’s Jose Marti Medal by Cuban President Raul Castro in Havana, capital of Cuba, July 22, 2014 [Xinhua]

 

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LET’S MAKE A DEAL: DOING BUSINESS IN CUBA

William M. LeoGrande, Professor at American University in Washington, D.C.

Original article here: Doing Business in Cuba

zzzzBy the first anniversary of President Barack Obama and Cuban President Raúl Castro’s decision to normalize relations last December 17, much had been achieved on the diplomatic front. But progress on the commercial front has been lagging, and unless both sides realize significant economic gains before Obama leaves office, the momentum toward lifting the embargo and fully normalizing relations could be lost.

The initial surge of excitement among U.S. businesses after December 17 was palpable: finally, an opportunity to enter a largely unexploited market, forbidden for half a century. In the past year, a parade of trade delegations has visited Havana. In April 2015, Democratic Governor Andrew Cuomo took a group of 20 New York business leaders. In September, Republican Governor Asa Hutchinson of Arkansas led an agricultural trade mission hoping to expand food sales. In November, Texas Governor Greg Abbott followed suit. Legislators and local officials led other trade delegations from Alabama, California, Kentucky, Illinois, Indiana, Louisiana, Missouri, New Mexico, North Carolina, Ohio, and Tampa, Florida.

In March 2015, the U.S. Agriculture Coalition for Cuba–a broad-based group formed after December 17 to promote agricultural trade–took 95 people to Cuba, including two former secretaries of agriculture. The U.S. Chamber of Commerce launched the U.S.-Cuba Business Council representing over two dozen major corporations, including Caterpillar, Kraft Heinz, Sprint, Boeing, Home Depot, and American Airlines. In October, Commerce Secretary Penny Pritzker went to Cuba, followed in November by Secretary of Agriculture Tom Vilsack.

Cuba needs the trade and investment that U.S. businesses can offer, and Cuban leaders appear eager to expand commercial ties. Yet despite this enthusiasm, few deals have actually been signed. “Up until now it has been going down. looking around, and saying, ‘this is an interesting place, but how do I make money here’?” explained deputy assistant secretary of state Alex Lee at a forum on doing business with Cuba organized by The Economist.

The case of The Home Depot, Inc. illustrates both the opportunities and the obstacles. Some 90 percent of Cubans own their own homes, most of which are in desperate need of repair. Dilapidated structures dot the island, from houses in need of a new coat of paint to apartment buildings literally falling down.

One way Havana has tried to ease the housing problem is by letting people do it themselves. Tens of thousands of families have taken advantage of new government grants and loans to finance home renovations. In 2015, private owners and contractors built more new housing units than the state construction company. That boom translates into a huge demand for tools and building materials–and a huge business opportunity for Home Depot.

The giant home improvement retailer is clearly interested. It is a founding member of the new U.S.-Cuba Business Council, and regional export manager, Heriberto Correa, attended the council’s inaugural meeting held in Cuba during Havana’s International Trade Fair. The Obama administration’s new regulations specifically license the sale of construction materials for private buildings, so Home Depot could legally sell to private Cuban construction cooperatives, contractors, and private home-owners.

It could even rent or build a warehouse in Cuba’s new Special Development Zone at the port of Mariel, where imports are duty-free and new businesses enjoy a ten-year tax holiday. In fact, any U.S. business legally selling goods to Cuba could take advantage of the favorable terms available for establishing facilities in the Mariel zone. And if the Cuban government would allow it, the company could open its own retail outlets and import a fleet of delivery trucks to ship goods from the warehouse to the stores.

Yet when asked if Home Depot planned to enter the Cuban market, the company’s CEO Craig Menear replied cautiously. “Cuba is an area we’re watching carefully,” he said. “We know at some in time when the environment is right, there’s opportunity for The Home Depot to be there. But we believe that before we go in there, it needs to benefit the people of Cuba.”

Caterpillar is another company well-situated to enter the Cuban market. Obama has licensed sales to Cuba’s private farms and cooperative, which are in serious need of better equipment. Moreover, Caterpillar is no late-comer to the island: it first called for an end to the U.S. embargo in 1998, and in 2004 donated generators to Cuban hospitals. “Caterpillar wants to do business in Cuba,” said Bill Lane, senior director of global government and corporate affairs. “Everything Caterpillar makes in the United States is needed in Cuba.” The company hopes to open a dealership on the island, Lane told The Economist‘s Cuba Summit in December, but it has yet to sign any contracts.

So why has progress been so slow?

To be sure, there are difficulties in doing business with Havana. Cuba’s infrastructure– its roads, energy grid, and digital network– lags behind neighboring countries. Foreign companies must still hire labor through the state’s hiring agency. Cuba’s bureaucracy is notoriously slow to make decisions and opaque, making dispute resolution problematic. But, as David Pathe, CEO of Canada’s Sherritt Corp., one of the island’s largest foreign investors, put it, “There is nothing unique about Cuba”– these are the kinds of problems companies face in any new foreign market.

The larger issue making U.S. companies reluctant to enter the Cuban market is uncertainty on the U.S. side. Although the Obama administration wants to see U.S. businesses engage with Cuba to demonstrate the benefits of the president’s new policy, the regulatory changes made thus far still leave too many obstacles in the way. If companies are not absolutely certain that their business plan is legal, they will not take the risk.

Financial regulations are a particular problem. Finance is the life blood of commerce; if funds cannot be easily transferred between Cuba and the United States, business will remain negligible. Although U.S. regulations allow for fund transfers involving licensed activities, companies are terrified of inadvertently violating the rules and being hit with enormous fines.

For example, it took months for the State Department to find a bank willing to handle accounts for Cuba’s diplomatic mission in Washington because the costs of regulatory compliance far outweighed the profit. Stonegate Bank in Florida finally agreed to do it because, as CEO David Seleski put it, they regarded it as a “moral obligation” to help re-establish diplomatic relations. Earlier this month, the Treasury Department had to reassure U.S. banks that they could process fund transfers to Cuba involving authorized travel without themselves having to certify that the travel was, indeed, legal.

The ultimate solution to these problems is to lift the U.S. embargo in its entirety, but that is not likely to happen in an election year when Republicans control Congress. In the meantime, President Obama should issue another round of regulatory changes that clarify what can and cannot be done.

In the financial area, Obama could license U.S. businesses to provide credit to Cuban customers to stimulate nonagricultural trade (agricultural credits are prohibited by law). He could authorize Cuban banks to establish correspondence accounts with U.S. banks to facilitate payments to Cuban customers. Finally, he could issue a general license to U.S. banks to process dollar-denominated transactions conducted by foreign banks (so-called “U-turn” transactions) that must be processed through a U.S. financial institution.

President Obama’s opening to Cuba was historic, but to make it irreversible, the policy needs to produce results–especially in the field of commerce. The interest is clearly there on both sides, but the barriers are still formidable. The exceptions to the embargo that the president has authorized thus far are impressive and lay the groundwork, but they have not yet gone far enough to reassure U.S. businesses that they can safely enter the Cuban market without running afoul of U.S. law.

As Cuba’s economic reforms open the country to foreign trade and investment, U.S. companies risk being left behind as competitors from Canada, China, and Europe jump in ahead of them. Companies that enter the market early and build relationships with their Cuban counterparts stand to benefit the most in the long run. As Caterpillar’s Bill Lane, an aficionado of the seafood in Havana’s private restaurants, put it, “The first movers in Cuba get the lobster.”

 

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HOW CUBA IS, AND ISN’T, CHANGING, ONE YEAR AFTER THE THAW WITH THE U.S.

By Nick Miroff December 15 at 7:00 AM

HAVANA — No event in decades shook up Cuba like the announcement last Dec. 17 by presidents Obama and Raul Castro that their countries would begin normalizing long-broken relations. In the 12 months since, Cubans have witnessed scenes few expected to see in their lifetimes, or at least in the lifetimes of Fidel Castro and his brother, Raul.

A U.S. flag snaps once again in the sea breeze outside a U.S. embassy in Havana. Raul Castro and Obama held talks on the sidelines of a hemispheric summit in April. So many U.S. politicians, corporate executives, foreign leaders, tourists and celebrities have visited, that an island long known for isolation suddenly feels it is at the center of the world.

The psychological impact of these events, however, has far outpaced any physical one. So far, U.S. businesses have only completed a handful of new deals. Cuba remains the only closed, one-party state in the Americas, and if anything, normalization with Washington has left communist authorities increasingly anxious about dissent and more determined to stifle it.

Cuba is still very much the same country it was a year ago. And yet, not quite.

“For a lot of my friends who are university graduates, the news was positive, and we saw it as the beginning of a long and complicated process,” said Lenier Gonzalez, a founder of the group Cuba Posible, which advocates gradual reform. But for more of the population, “it produced an unrealistic expectation

That third group of Cubans heard in Obama’s words last Dec. 17 a cue to flee. They fear normalization will put an end to the immigration rules that essentially bestow residency and welfare benefits on any Cuban who reaches U.S. soil.

As many as 70,000 Cubans have left for the United States in the past year, in what appears to be the largest wave of migration from the island in decades.

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The Legal Emigration Route to the USA: Early Morning Queue outside the American Embassy, April 2015

The changes of the past year have set Cuban authorities on edge too, bringing an escalating crackdown on public protest or opposition activity.

Dozens, even hundreds of activists are detained or arrested each Sunday, when the Ladies in White dissident group attempts to march in Havana and another group, the Patriotic Union of Cuba, stages a weekly mobilization in Santiago, the island’s second- largest city.

Though the government generally no longer locks up dissidents for long prison terms, it increasingly relies on short-term arrests to block protests by activists it considers “mercenaries” at the service of foreign interests.

The illegal but tolerated Cuban Commission of Human Rights and Reconciliation tallied 1,447 political arrests or arbitrary detentions in November, the highest monthly total in years.

In an interview published Monday, Obama said that the United States would continue to support Cuban rights activists and that he was considering a trip to the island — but on the condition that he can meet with dissidents. “If I go on a visit, then part of the deal is that I get to talk to everybody,” he said, in an interview with Yahoo News.

“Our original theory on this was not that we were going to see immediate changes or loosening of the control of the Castro regime, but rather that over time you’d lay the predicates for substantial transformation,” said Obama, whom surveys show is a widely popular figure on the island.

Cuban officials this year have tried to push back at public perceptions that Obama is a friend and the United States is no longer a threat or a foe. Relations will not be truly normal, they insist, until Washington lifts its trade embargo, closes the U.S. Navy base at Guantanamo Bay and makes reparations for a half-century of economic sanctions and other grievances.

Yet the rivalry has morphed from hostile confrontation into something more sportsmanlike: a low-intensity contest to set the pace of change, with Washington trying to move faster and Cuba preferring slow, cautious steps.

As Rafael Hernandez, editor of the Cuban journal Temas, put it: “We’ve traded a boxing ring for a chess board.”

For all its revolutionary slogans and lore, Cuba can be a profoundly conservative place, in the strict definition of the term. It is a country where the television programming, food rations and newspaper editorials seem to remain the same, year in, year out. This drives young Cubans crazy. But the continuity is a comfort to some, not least the communist party elders who have ruled for 57 years.

Raul Castro, 84, has pledged to step down in February 2018. Obama has 13 months left in office. That leaves a narrow window for the two men who charted the normalization course to see it through.

Rarely does a week go by without some new chess move. The Obama administration in May took Cuba off the list of state sponsors of terrorism, paving the way for the countries to formally reestablish diplomatic ties in July.

The two countries have signed new agreements on environmental cooperation. They’ve enhanced anti-narcotics enforcement. Direct mail service is set to resume on a trial basis. U.S. and Cuban officials have even started discussing their oldest grievances, opening negotiations to settle billions in U.S. property claims and Cuban counter-claims.

The U.S. secretaries of agriculture, commerce and state have all visited Havana in the past year, along with dozens of U.S. lawmakers, adding up to the highest-level government contacts in decades.

A U.S. tourism tsunami still seems to be building. U.S. travel to Cuba increased by 40 percent since last December, according to industry estimates. Overall tourism to Cuba increased nearly 20 percent, bringing billions in additional revenue for the government.

“Our booking activity has been off the charts,” said Tom Popper, president of Insight Cuba, the largest U.S.-based provider of the licensed “people-to-people” travel permitted under U.S. law.

Most of the U.S. travelers have come to Havana, where a shortage of hotel beds has kicked off a scramble among Cubans and their foreign business partners to buy, renovate and rent properties. Each city block seems to have at least one crew of contractors patching cracks and applying paint.

A deal to reestablish regular commercial flights between the two countries is said to be imminent, with United, JetBlue, American Airlines and other U.S. carriers pledging to begin service as soon as they’re cleared by the two governments.

Cuba established a direct phone link with a U.S. company, IDT, and a roaming agreement with Sprint. It has set up nearly 50 outdoor WiFi hotspots at parks and boulevards across the island, where Cubans gather round-the-clock to chat with friends and relatives overseas.

But the initial Cuba excitement among U.S. companies has been replaced by something more “sober” a year later, said James Williams, president of Engage Cuba, a group lobbying to lift the embargo.

Williams said he knew of at least two-dozen U.S. companies that had submitted formal business proposals to the Castro government, aimed at taking advantage of more flexible rules. “I would imagine it’s probably in the hundreds,” he said.

The companies want to lease office space, build warehouses, dock cruise ships and ferries. Not one has gotten a green light so far, he said.

“Frankly I think the Cubans have been overwhelmed with a surge in interest and the decentralized nature of how that interest is coming to them, with companies calling them up, consultants coming to them, and not a lot of clarity about how to make a deal,” said Williams. “The non-responsiveness has slowed things down.”

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THE BUENA VISTA ECONOMIC EFFECT

A genre of music once sidelined as “A decadent relic of the past” that came back to “Rescue” *   the Revolution.

 By Anthony Smith, December 14, 2015

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Buena Vista Social Club, the musical phenomenon that initially captured the world’s attention around 1997, is in the midst of its final world tour. Although several of the stalwarts of the group have since passed away, the remaining members, along with an injection of new blood are giving fans a good show. The unlikely rise of these musicians came at the height of the special period, giving Cuban cultural tourism an unexpected boost when it was limping along following the collapse of the Soviet Union. Although Cuba has always punched above its weight in the area of music, this was the most improbable of scenarios at a time of utter desperation.

The success of Buena Vista on multiple fronts (CD, concerts and a documentary), led a lot of individuals across the world to visit Cuba. On the island, Cubans themselves knew little about Buena Vista, and the younger generations were largely indifferent to the music. Cuban musicians were initially surprised by foreign tourists requesting songs that they did not know, but they quickly caught on, learning songs like “Chan Chan.” There was also a boom in new groups forming to play exclusively for tourists, though it soon became obvious that they had a repertoire that was largely limited to the ones made popular by Buena Vista Social Club. They could play hits from the past like “Quizas, quizas,” but not “Me voy pa’l pueblo” or “La runidera” because they were not among those that the members of Buena Vista had included in their various albums.

Now largely unknown by many and overlooked by a few, is the reasoning that led these musicians into obscurity. Throughout history, revolutions have upended societies and sought to reshape them, and Cuba was no different. There is little doubt that Cuba needed a revolution in 1959. The existence of a mafia state, gambling, rampant corruption, abject poverty, drugs and prostitution created conditions ripe for sweeping change. As relations with the US deteriorated, Cuba entered a degree of isolation, defections and a looming cold war that changed everything internally. Music, art and culture were soon expected to toe the party line. The worst times were in the so called “El quinquenio gris,” a five year gray period (1968-73) where there was severe repression in the arts and culture. The air of uncertainty led writers, poets, artists and musicians to play it safe in their work, for fear of running afoul of rules and regulations that were deliberately ill-defined to create an atmosphere of indecision and self- censorship.

Looking back, there is little doubt that the arts were unfair victims of this purge. State resources were directed towards other, newer forms of music. The individuals that had burgeoning careers in pre- Castro Cuban and remained in Cuba were sidelined as the revolution sought to create new sounds. Ruben Gonzalez said that he had not played a piano in well over a decade at the time he was invited to play for Buena Vista Social Club. Ibrahim Ferrer was for all intents and purposes retired, shining shoes to make some extra money. Compay Segundo had composed the song “Chan Chan” as early as 1987, but did not get the chance to record it in studio until 1995. This is not to say that Cubans were devoid of musical choices. A lot of new artists like Silvio Rodriguez and Pablo Milanes did emerge, as did forms of music like Nueva Trova and Timba, but their emergence came at the expense of the older musicians that had established careers in 1959.

A lot of criticism has been directed at the lack of authenticity of Buena Vista Social Club, and it’s over reliance on marketing and neo-colonial nostalgia for the past. However valid that criticism may be, when it comes down to the dollars and cents, Buena Vista beat Timba, Nueva Trova, Latin Jazz, Reggaeton and all others as a selling point. If anything, Cuba failed to fully capitalize on the Buena Vista craze at its peak over a decade ago. Commemorative and limited edition T-shirts, cups, rum, coffee and even cigars would have brought in additional millions in revenue from foreign tourists.

Finally, it should not be forgotten that Buena Vista Social Club happened in spite of, and not because of the Cuban revolution.

*The word “Rescue” is frequently used to describe attempts to resuscitate and rebuild various parts of Cuban society in the economic decline that followed the collapse of the Soviet Union.

Anthony Smith is an amateur Cuban historian and lover of all things Cuba. He has made his living as a consumer rights advocate, a professional fundraiser, a political activist and in the food service industry

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RECONCILING U.S. PROPERTY CLAIMS IN CUBA: TRANSFORMING TRAUMA INTO OPPORTUNITY

Richard Feinberg, December 2015,  Brookings Institute

Original Here: Reconciling U.S. Property Claims in Cuba: Transforming Trauma into Opportunity.” 

zzzzzzzzz CONCLUSION:  . A Grand Bargain?

In their opening meetings, the U.S. and Cuba will present their conflicting claims. One possible outcome is protracted and contentious negotiations. But there is a much more promising alternative approach: to take advantage of the very size and complexity of the conflicting claims and to make their resolution the centerpiece of a grand bargain that would resolve some of the other remaining points of tension between the two nations, and embrace an ambitious, forward-looking development strategy for Cuba.

There are precedents for such a grand bargain, in such cases as the Soviet Union, Vietnam, and China. The Roosevelt-Litvinov agreements—negotiated in the White House directly between the U.S. president and Soviet foreign minister—laid the foundations for renewing diplomatic relations, and one might argue for the World War II alliance that defeated the axis powers. Similarly, the claims settlement with Vietnam was one piece of a much broader normalization process between the two once bitter adversaries—two nations that now label themselves strategic allies. Pointedly, at the August 14, 2015 flag-raising ceremony at the U.S. Embassy in Havana, Secretary of State John Kerry remarked:

“And last week, I was in Hanoi to mark the twentieth anniversary of normalization of relations between the United States and Vietnam. Think about that. A long and terrible war that inflicted indelible scars on body and mind, followed by two decades of mutual healing, followed by another two decades of diplomatic and commercial engagement. In this period, Vietnam evolved from a country torn apart by violence into a dynamic society with one of the world’s fastest growing economies.”

In recent U.S.-Cuban relations, there is also the precedent of the December 17, 2014 announcements, when the return of Alan Gross and a CIA asset for three Cuba spies was wrapped in the larger story of normalizing diplomatic relations, and on the U.S. side, the relaxing of certain travel and economic restrictions.

The two-tiered settlement strategy outlined above allows for U.S. firms to re-engage in Cuba. At the same time, some individual claimants and their families harbor deep affections for Cuba and would probably be willing to contribute to its future development. Cuba could consider special incentives to regain this legacy of the island’s past, and for interested claimants to match their awards with re-investments in new projects.

With the right incentives, Cuba could also attract the capital and talents of many of the two million Cuban-Americans resident in the United States. With their separate legal issues and emotional charges, and the vastness of their numbers, the property claims of Cuban-Americans will require their own treatment (more on this in a subsequent paper). But the settlement of U.S. property claims might include a general framework for the future consideration of issues of concern to Cuban-Americans – with the overarching goal being reconciliation of the diaspora with the homeland.

The settlement of U.S. claims could be wrapped in a package of economic opportunities for Cuba. Importantly, the United States could further relax its economic sanctions (amending or repealing Helms-Burton), providing more trade and investment opportunities – and the capacity for Cuba to earn the foreign exchange needed to service debt obligations. In turn, Cuba will have to accelerate and deepen its economic reforms, to offer a more attractive business environment for investors and exporters. Politically, the Cuban government could present a significant softening of the U.S. embargo as a victory, offsetting any concessions made in the claims negotiations. A comprehensive package might also be more attractive to the U.S. Congress; formal Congressional consent would enhance the measures’ legitimacy and durability and help to close off any court challenges, should some claimants be unsatisfied with the final settlement. It is time for Cuba to enter the international financial institutions and the United States should no longer stand in the way. The IFIs can play a vital role, in providing capital and connections to the global marketplace. The IMF and World Bank are also deep repository of knowledge on transitions from central planning to more market-driven economic systems.

The claims settlement agreement between the United States and Hungary contained an annex where it was agreed, inter alia, that the Hungarian Government intended to settle outstanding dollar bonds through direct talks with bondholders; and that the United States would seek authority from its legislature to accord Most-Favored Nation (MFN) treatment to Hungary, subject to separate negotiations.

75 In a grand bargain, the United States could offer to work with Cuba and other creditors to renegotiate Cuba’s outstanding official (Paris Club) and commercial (London Club) debts on terms that take into account Cuba’s capacity to pay.76 The U.S. government continues to carry on its books $36.3 million of Cuban obligations to the U.S. Export-Import Bank (Ex-Im Bank), which could be addressed within the Paris Club framework.77 The United States could also agree to reconsider remaining trade and investment restrictions.

At this stage, it would be too much to expect agreement on a detailed development strategy for Cuba. But a process could be put in place whereby Cuba would work with its many international partners, including the United States, to forge a twenty-first century development model that preserves the social gains of the revolution but that also raises labor productivity and living standards.

Under President Raúl Castro, Cuba has initiated economic reform and the international community can accompany it by adding its expertise and resources. It would not be too much for the claims ettlement talks, if they agree on a two-tiered strategy, to include a discussion of the business climate, and what additional steps Cuba needs to take to attract badly needed foreign investment. As strict socialist property relations are gradually replaced by a more hybrid economic system, Cuba will need to design and  implement new property regimes that promote individual initiative but that also encompass land-use, housing, natural resources and other regulatory oversight protective of the public interest and consistent with sustainable and equitable growth.

The strategic goals in a massive claims resolution process must be political: to heal the deep wounds of past conflicts, to lay foundations for peaceful coexistence and the non-violent resolution of disputes, to avoid jeopardizing fiscal balances and crippling debt burdens, to build investor confidence and  international reputation, and to help render the Cuban economy more open and competitive. These vital goals will not always be fully convergent with the more traditional, legal objective focused narrowly on the rights of property claimants. In designing and implementing solutions, as claimants bang on doors and demand attention, policy makers should not lose sight of their overriding purposes. In the interests of both Cuba and the United States, the twentieth-century trauma of massive property seizures should be transformed into a twenty-first century economic development opportunity.

 zzzzzRichard-Feinberg

Richard Feinberg is a nonresident senior fellow with the Latin America Initiative at the Brookings Institution. He is a professor of international political economy at the School of Global Policy and Strategy, University of California, San Diego. His four decades of engagement with inter-American relations spans government service (in the White House, Department of State, and U.S. Treasury), numerous Washington, D.C.-based public policy institutes, the Peace Corps (Chile), and now in academia. He is also the book reviewer for the Western Hemisphere section of Foreign Affairs magazine.

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A NEW CRISIS OF CUBAN MIGRATION

By WILLIAM M. LEOGRANDE, New York Times,  DEC. 4, 2015

Original Essay Here: Cuban Migration

zzCuban migrants remonstrated with a Costa Rican immigration official at the border with Nicaragua, in Penas Blancas, Costa Rica, on Monday.

 zzzNicaraguan soldiers and policemen stand guard in Penas Blancas, Guanacaste, Costa Rica, on the border with Nicaragua on November 16, 2015

 Washington — A standoff in recent weeks that has trapped hundreds of Cuban migrants at Costa Rica’s border with Nicaragua as they try to reach the United States is a graphic demonstration that Washington’s migration policy toward Cuba is no longer sustainable. Left unchanged it could produce a crisis on the scale of the 1980 Mariel boatlift or the 1994 balsero (rafters) crisis — if one hasn’t begun already.

Current policy, based on migration accords negotiated with  Havana in 1994 and 1995, commits the United States to accepting at least 20,000 legal Cuban immigrants annually, and to returning to Cuba migrants intercepted at sea as they try to enter the United States illegally.

Unilaterally, the United States also adopted a “wet foot/dry foot” policy, which allows Cubans who arrive in the United States (“dry foot”) to remain in the country under a special status called parole and, a year later, become eligible under the Cuban Adjustment Act of 1966 to seek permanent residency. No other foreign nationality enjoys such privileged status.

The Cuban government has long argued that these policies encourage illegal migration and human trafficking. Still, the problem of Cubans coming to the United States illegally has been relatively minor until recently.

In the years since the migration agreements were signed, about 4,000 Cubans annually have eluded the United States Coast Guard, reached Florida beaches, and claimed “dry foot” status. Some 2,000 to 3,000 others have been intercepted at sea (“wet foot”) each year and returned to Cuba. Because crossing the Florida Strait on rickety rafts or dilapidated boats is so dangerous, and the chances of being caught by the Coast Guard are high, the flow of illegal migrants remained manageable.

It is manageable no longer. The number of migrants has surged since last December, when President Obama and his Cuban counterpart, Raúl Castro, announced their intention to normalize relations. Would-be immigrants fear that reconciliation foreshadows repeal of the Cuban Adjustment Act, prompting Cuban migrants to act now lest they miss their chance.

With that in mind, Cubans have found an air-land route to the United States on which everyone can be a “dry foot” who can expect entry. In the past 12 months, more than 45,000 Cubans entered the United States from Mexico — without having to risk crossing a perilous desert as Mexicans and Central Americans do.  The new route is possible because in 2013, the Cuban government abolished its requirement that citizens obtain government permission to travel abroad. Today, most Cubans can travel to any country that will grant them a visa. Ecuador even admitted them without one until last Tuesday, and Guyana still does.

As a result, would-be migrants have been flying to Ecuador to begin a long, surreptitious trek north, without visas, through Colombia, Central America and Mexico. At the Texas border, they simply declare their nationality and are admitted under the “dry foot” policy.  Hiring “coyotes,” as smugglers of migrants are called, to guide the trek is expensive, but many Cubans have family members in the United States willing to pay. Recently, Cubans armed with cellphones have been crowdsourcing their own smuggling routes by following advice on social media from those who have gone before them.

The current crisis in Central America was triggered on Nov. 10 when Costa Rican authorities broke up a smuggling operation, leaving 1,600 Cubans stranded. When Costa Rica tried to send them north, Nicaragua closed the border. As more Cubans arrive daily, the number stuck there has reached 4,000, with no end in sight.

At a recent meeting of diplomats from the region, Costa Rica proposed creating a “humanitarian corridor” that would allow Cubans free passage to the United States border. Nicaragua rejected the proposal, but even the suggestion of such a plan should be a red flag for Washington. Latin Americans are getting tired of enforcing a United States immigration policy toward Cubans that isn’t working and discriminates against their own citizens. The contrast between Washington’s privileged treatment of Cuban migrants and its coldness toward Central Americans, including children fleeing criminal violence, is indefensible.

18CUBA-slide-8QJE-superJumboEarly morning que for migration visas, American Embassy, February 2015.

Nevertheless, the Obama administration has repeatedly declared that it has no intention of changing current migration policy, for fear that any hint of change will touch off a stampede. United States diplomats reaffirmed that position at a meeting with their Cuban counterparts last Monday. The meeting produced no new thinking about how to resolve the crisis.

There is a solution to this conundrum. If Cuban migrants trying to enter the United States by land were treated the same as those intercepted at sea and returned to Cuba, the incentive to make the long, dangerous passage north would be drastically reduced.

This would not require amending the Cuban Adjustment Act, which allows for the adjustment of status only for Cubans who have been admitted or paroled into the United States. It would require only changing the “dry foot” policy of admitting on parole anyone who sets foot on United States territory. That policy is a matter of executive discretion. To avoid a last-minute exodus from Cuba, it could be rescinded by the attorney general without prior notice.

An end to the “wet foot/dry foot” distinction should be accompanied by a significant increase in the number of Cubans admitted legally, so that those who want to immigrate to the United States have more opportunities to do so safely.

But to do nothing is to face a slow-motion migration crisis that will be interminable. Cuba will not reimpose travel limits on its citizens, and Latin America will not cooperate indefinitely by blocking Cubans’ transit when Washington’s policy is to let in all Cubans who arrive — and keep other Latin Americans out.  For Washington to refuse to change a policy when new circumstances have rendered it utterly ineffective makes about as much sense as King Canute trying to hold back the tide.

zWilliam M. LeoGrande is a professor of government at American University in Washington, D.C., and a co-author with Peter Kornbluh of “Back Channel to Cuba: The Hidden History of Negotiations between Washington and Havana.”

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U.S.-CUBA NORMALIZATION ALLOWS MEXICO AND CUBA TO REPAIR OLD TIES

William M. LeoGrande, World Politics Review, Monday, Nov. 30, 2015

Complete Essay Here: Cuban-Mexican Relations WPR 11-30-15

imageCUBAN PRESIDENT RAUL CASTRO AND MEXICAN PRESIDENT ENRIQUE PENANIETO November 15

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