• This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' 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 that was brought to my attention by Andrew Johnston of Ottawa: ".. ... 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."

    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.

AMERICA AND CUBA: THE NEW NORMAL

The Economist, January 3, 2015

 Original Here: The loosening of the embargo will pay dividends far beyond Cuba

ObamaMARCO RUBIO, a prospective Republican candidate for the White House, called it “a victory for oppressive governments the world over”. Only “the heinous Castro brothers, who have oppressed the Cuban people for decades” will benefit, thundered Jeb Bush, a likely rival, who is also based in Florida. The object of their fury: Barack Obama’s startling decision to loosen America’s 54-year-old embargo on Cuba.

Cuba’s Communist government is indeed oppressive, while the Castro brothers can fairly be called heinous and will probably do all they can to maintain control. Raúl Castro, who took over from Fidel in 2008, has said he will step down in 2018, but that is not a prelude to free elections. Nonetheless, easing the embargo is the right thing to do. The measures that Mr Obama and Mr Castro announced on December 17th—including a deal to restore diplomatic relations and the liberalisation of travel and remittances—will do much to normalise a relationship that has been trapped in the sterile logic of the cold war. But its significance goes beyond that. The embargo warps the United States’ relations with other Latin American countries, as well as their relations with one another.

The Economist has long argued that the embargo is self-defeating. Rather than ending the Castros’ rule, it has provided an evergreen excuse for their failures and so helped maintain them in power. The embargo kept Cuba out of international bodies such as the Organisation of American States, where other countries could have prodded the island towards greater openness. It put the United States at odds with most of its allies and nearly every other country in its hemisphere. It would be much better if the embargo were got rid of entirely, but its partial lifting is a step towards normality for the whole region.

So far most of the attention has been on Cuba. The Castros agreed to release 53 political prisoners (along with an aid worker and an American spy). Cubans will have more access to the internet, which should loosen the regime’s weakening grip on information. As Cuba’s relations thicken with the democratic giant next door, its citizens’ demands for freedom may grow more insistent. There is no guarantee that such engagement will unseat the Castros, but the embargo has manifestly failed for half a century. It has only remained there because of the political clout of a dwindling number of elderly Cuban exiles in Florida (which also explains the outrage of the normally more sensible Messrs Bush and Rubio).

But the biggest prize should be the advance of democracy and open markets in Latin America. The Castros are not the only ones who will be discomfited by the loss of the American alibi. Venezuela leads a loose coalition of countries that uses defiance of the United States as an excuse for policies that stunt economic growth and democratic rights. It has long supported Cuba (and other Caribbean countries) with sales of oil at heavily subsidised prices. Even for robustly democratic countries like Brazil, the American bogeyman makes it easier to justify resistance to trade deals and to cosy up to uglier regimes.

Now this depressing narrative may change. Venezuela’s government, reeling from the drop in oil prices, faces difficult parliamentary elections in 2015. Argentina’s next president is likely to be less prickly towards the rest of the world than Cristina Fernández de Kirchner, who will stand down in 2015. Colombia, an American ally, may end its 50-year war with the leftist FARC guerrillas if peace talks succeed. Dilma Rousseff could be a more pragmatic president in her second term.

The scene is set for a new realism in Latin America. As commodity prices tumble and economic growth stalls, the region needs open markets, trade and regional co-operation—including with the yanquis to the north. With his move on Cuba, Mr Obama has opened the way for the sort of diplomatic engagement that Latin America rarely enjoyed during his first six years in office. But Latin America needs to return the compliment. The time for sulking and striking poses is over—in Brasília and Caracas as well as Havana and Miami.

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VENCEREMOS! CUBA’S LESSONS FROM EASTERN EUROPE

Financial Times, | Dec 30 17:05

Original here: LESSONS|

By Piroska Mohácsi Nagy, European Bank for Reconstruction and Development

An historic thawing of ties between Cuba and the United States has raised the question of how far the Communist island state is prepared to go in opening up its economy to the forces of the market and integration with the international community.

If and when Cuba does embark on a path of economic – and perhaps also a degree of political transformation – it could well enjoy the advantages of the late-comer, drawing lessons both positive and negative from eastern Europe over the last quarter of a century.

It can assess what worked and what proved much more difficult, emulating the successes and avoiding the pitfalls. There is no doubt that the east European process was painful, especially at the very start when the existing production systems collapsed in the face of real competition, leading to precipitous declines in output and employment.There is equally no doubt that the unprecedented experiment that was launched after the fall of the Berlin Wall has been a success, however tortuous the route and however many times there have been setbacks on the way.

There were four key building blocks in the reform process that was launched after 1989. These began with the – often initially painful – measures to deregulate and liberalise economic structures, including trade, prices and markets. They also comprised measures to achieve macro-economic stability, the creation of new institutions, regulatory bodies and the dismantling of state-ownership of output via the privatisation process.

Of these four policies, privatisation proved to be the most socially controversial, leading not necessarily to calls for a return to the dominance of the state, but resulting in what was often perceived as a corrupt process that unfairly favoured a privileged set of elite insiders.

But none of the four can be viewed independently of the others; they are intimately intertwined. Without deregulation of product and labour markets, privatisation will not work. Without privatisation, macro stabilisation will not succeed. And without appropriate institutions, none of the reforms can be sustained.

The eastern Europe experience provides pointers on how to approach the reform roll-out and Cuba could benefit from reflecting on the outcome of what in the early years of transition was a furious debate about “big bang” reform or gradualism.

With the benefit of hindsight it is now clear that the advocates of pursuing all the four elements simultaneously were, in the main, right. Those include the believers in the “big bang” as well as the “opportunists”, i.e. those who claim that reforms should be implemented as soon as an opportunity arises.

Gradualism in the sense of postponing any of the key elements has proven not to be a workable option because it can create new vested interest in half-baked reforms, as Ukraine’s experience until recently has shown.

Lessons from eastern Europe’s mistakes
It is, therefore, vitally important to take full advantage of the window of opportunity that exists in the earliest days of transition. One lesson that the international community learnt late was the key role that is to be played by reformed public authorities and the state in helping to define and anchor the reforms that support the market reforms.

In the early post-communism euphoria the mantra of “State=Bad – Market=Good” dominated, leading to some of the worst examples of unfettered capitalism and wild-west economics that enriched the few and impoverished the many.

It was only much later that the reformed state was recognised as being a key element in the transition process, removing itself where markets can do the job more effectively but remaining or even being strengthened where it can support an environment within which the free market can flourish fairly.It is important to bear in mind that simply destroying the state instead of reforming and adapting it to support market development and perform the provision of public goods can lead to chaos and the state’s eventual resurrection with autocratic features.

At the same time, privatisation has to be addressed sensitively, preferably using a combination of methods that ensure fairness and also an acceptable balance between foreign and domestic private ownership.

For many European countries the prospect of EU membership has provided an anchor that has proven to be a major incentive in bedding down reforms and modernising economic structures. Similar options may not be out of reach for Cuba, given the vicinity of NAFTA (North American Free Trade Agreement), for example. And even without a powerful external anchor, like many other economies, Cuba can look to reap the benefits from other forms of external economic opening and integration and joining international organisations that can help to inculcate higher economic standards.

External support can work only if reforms start in earnest. Then foreign capital can be just as transformational as it has been in eastern Europe. Foreign direct investment can support know-how and good governance, in addition to providing much needed fresh capital. While developing external links are crucial, it is just as important for countries to nurture an independent civil society and a free media that holds up the evolving systems to scrutiny. They can both be a major support for developing democracies and fairer economies, acting as a deterrent to corruption and injustice.

However, local ownership of reforms will be, just as in eastern Europe, absolutely critical. The clear communication of new processes and policies is essential. The best policies in the world will not be effective if people do not understand them. Effective communication can help change value systems, explain policy choices and ensure their ultimate success.

What we are witnessing today may well be one of the last pieces of the iron curtain to start coming down. When it finally does, just as for eastern European countries 25 years ago, the Cuban people will deserve strong financial support and the best policy advice by the international community so that they can guide their reforms and re-integration into the world economy with as little volatility as possible.

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Piroska Mohácsi Nagy is Director for Country Policy and Strategy and Initiatives, Office of the Chief Economist, at the European Bank for Reconstruction and Development

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VENEZUELA’S CUBA PROBLEM

The Economist, December 19th 2014

In a surprise announcement on December 17th the US president, Barack Obama, and the Cuban president, Raúl Castro, announced a significant thaw in relations between their respective countries. The move has major implications for Venezuela, Cuba‘s main ally.

The Venezuelan president, Nicolás Maduro, appeared to be caught unawares on December 17th, right in the middle of a rhetorical campaign against “insolent, imperialist” sanctions passed by the US Congress just one week beforehand. Unlike the decades-old Cuba embargo, the sanctions are targeted at senior Venezuelan government officials accused of committing human rights violations. However, just as members of the ruling Partido Socialista Unido de Venezuela (PSUV) were being invited to burn their US visas in public, Cuba was announcing the restoration of diplomatic relations with the US.

A quiet betrayal?

The process that led to the announcement, it is now clear, began not long after the death of Mr Maduro’s predecessor and mentor, the former Venezuelan president, Hugo Chávez (1999-2013). The Cuban government, which has benefited from billions of dollars in Venezuelan subsidies—including cheap oil under the PetroCaribe oil-financing initiative—needed a “plan B”, given the severe economic crisis facing the Maduro government and the likelihood that it would be unable to resist mounting pressure to divert resources away from foreign aid. However, with an extensive network of Cuban intelligence agents given free rein in Venezuela—particularly in the barracks—Mr Maduro must now be wondering what else has been (or might be) negotiated behind his back.

At the very least, the news of a US-Cuban rapprochement will exacerbate resentment in the military over its subordination to Cuban officials who, it seems, gather intelligence but do not share it. There is also some confusion within the ranks of the PSUV, whose militants find it hard to understand why Mr Obama is allegedly seeking to overthrow Mr Maduro, but is happy to shake Mr Castro’s hand.

Hard choices ahead for Mr Maduro

Anti-imperialism is a handy tool with which to maintain unity against an external enemy. However, it is hard to wield when your best friend is embracing the “empire” (swiftly renamed “the giant of the north” in Mr Maduro’s post-announcement comments). Cuba has for decades played a useful role for Latin American governments of both left and right. “Solidarity” with Cuba has been a convenient, mainly risk-free way to stand up to the US government and beat the nationalist drum.

Now Venezuela faces the prospect of replacing Cuba as the US’s main adversary in the region—just as its economy is imploding and its governability is at risk from internal dissent—or capitulating and losing the support of the already-restive domestic left. The timing could hardly be worse for Mr Maduro.

Maduro_y_Raul_Castro_3

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CUBA INCHES TOWARD TRANSPARENCY, SEEKING INVESTMENT AND CREDIT

Wed Dec 24, 2014

 By Marc Frank

HAVANA, Dec 24 (Reuters) – Cuba released more information on its fragile external finances this week than it has in over a decade, as it seeks foreign investment and credit following its sudden improvement in relations with the United States.

The government revealed a healthy current account surplus of $1 billion for 2014, supported by remittances and the re-export of oil that it receives on favorable terms from Venezuela, its closest ally. An estimate of foreign currency reserves, normally a state secret, has also surfaced. Western diplomats told Reuters they had seen a figure of $10 billion on what appeared to be an official economic report.

The revelations followed U.S. President Barack Obama’s announcement last week that Washington would restore diplomatic ties with Cuba and lift some economic sanctions in a dramatic about-face after more than five decades of confrontation.

Hungry for fresh credit but in no position to enter the bond market, Cuba has over the past four years restructured billions of dollars worth of debt with China, Japanese commercial creditors, Mexico and Russia, obtaining substantial reductions in what it owed in exchange for payment plans it can meet.

It has also significantly increased tax incentives for foreign investment, although companies say tax cuts are not enough and complain about a lack of information needed to make investment decisions.

Debt negotiations with the Paris Club of creditor nations may begin next year after 18 months of informal contacts, according to European diplomats, but they say Cuba will have to first open its books. It appeared to be making a start this week.

FRESH FIGURES

Diplomats said the reserves figure of $10 billion seemed feasible as Cuba has increased its reserves for fear of economic and political turmoil in Venezuela. It also plans to unify the dual monetary system and devalue the one-to-one exchange rate with the dollar.

Cuba last reported its “active” foreign debt, accumulated after it declared a default in the late 1980s, as $13.9 billion in 2011. It no longer reports its “passive” debt from before the default, which economists estimate at $8 billion.

Pavel Vidal, a former Cuban central bank official who now lives in Colombia but follows Cuba’s finances closely, said he estimates the foreign debt is “somewhere between $25 billion and $30 billion” and that a $10 billion reserves figure is plausible.

The current account showed a surplus of $1 billion this year but will drop to $5 million in 2015 as Cuba increases imports by 13 percent to stimulate growth, according to Economy Minister Marino Murillo, a significant admission for a country that usually waits three years to report such information. He revealed the information in a closed-doors session of the National Assembly last week and it was broadcast by state media on Monday.

Since President Raul Castro took over for older brother Fidel in 2008, Cuba has achieved significant trade and current account surpluses after years of deficits. Exports have risen more than 50 percent while imports have grown less than 8 percent as the government tries to regain international credibility by improving its finances and meeting debt payments.

Remittances totaled $1.7 billion this year and the re-export of Venezuelan oil brought in $765 million, Murillo said in offering a fairly detailed line item review of the current account for the first time in more than a decade.

He also said the payment of dividends to foreign joint venture partners would increase from $120 million this year to $447 million in 2015. Most surprisingly, Murillo, Castro’s point man charged with dismantling the old Soviet-style economy and building one similar to Asian communism, said Cuba obtained $5.7 billion in credit to cover the same amount in debt payments in 2015.

“To open the international financial gates Cuba will have to be much more transparent in releasing economic data, especially on its balance of payments,” said Richard Feinberg, the author of several studies on Cuba’s need to join the international financial community. “This new data release is a step in the right direction.” (Reporting by Marc Frank; Additional reporting by Daniel Bases in New York; Editing by Daniel Trotta and Kieran Murray)

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SHIFTING DYNAMICS FOR CUBA’S DISSIDENTS

Leer en español (Read in Spanish) »

New York Times, THE EDITORIAL BOARD, DEC. 27, 2014

The words were scrawled in graffiti on a street near the house of the Cuban dissident Oswaldo Payá a few years before his suspicious death in 2012. “In a plaza under siege, dissidence is treasonous.”

Over the decades, Cuba’s authoritarian government has relied on that convenient argument to exert pervasive control over the lives of its citizens and keep opposition movements from gaining enough traction to threaten the state. The message was unmistakable: As long as the United States was intent on toppling the island’s leaders and meddling in the country’s affairs, Cubans, as a matter of national sovereignty, had to close ranks. The era that began this month when President Obama and President Raúl Castro of Cuba announced an end to more than 50 years of enmity between their governments is a watershed moment for Cuba’s diverse and courageous opposition movement.

Under Communist Party rule, Cubans endure the austerity of living under a stagnant, centrally planned economy. Their access to the Internet is severely limited and censored. The island’s official press is wholly subservient to the state. Outside the rigid mechanisms of the party, Cubans have few substantive vehicles to challenge their leaders.

In 1998, at the end of a decade of hunger and deprivation triggered by the collapse of Havana’s longtime patron, the Soviet Union, Mr. Payá undertook an audacious mission. Relying on a Cuban law that ostensibly allowed groups of 10,000 or more eligible voters to propose new laws, Mr. Payá gathered, by some estimates, more than 25,000 signatures from Cubans who endorsed sweeping democratic reforms, including free elections, freedom of assembly, freedom of the press and a less-regulated economy.

Osvaldo Paya

Oswaldo Payá

In 2002, Cuba’s National Assembly responded to Mr. Paya’s initiative, known as the Varela Project, by amending the Constitution to make the island’s socialist, one-party system “irrevocable.” The following year, Cuban authorities jailed scores of dissidents and independent journalists during a period of intense repression known as the Black Spring. The crackdown, which took aim at many leaders of Mr. Payá’s movement, largely escaped global attention.

In 2010, the Cuban government agreed to release many political prisoners in a deal brokered by the Catholic Church, on the condition that they move to Spain. Mr. Payá died in a car crash in 2012 in Cuba that many human rights activists suspect was staged by the authorities.

A few of the released prisoners, including José Daniel Ferrer, a fiery lieutenant in Mr. Payá’s movement, refused to leave the island. Mr. Ferrer now leads the Patriotic Union for Cuba, the most visible and outspoken opposition group on the island. In a recent interview in Havana, Mr. Ferrer said his eight years in prison gave him time to reflect on why Cuba’s democratic movements had failed in the past and how they might one day prevail. Historically, he said, Cuban activists have often been seen by their compatriots as hapless victims of an oppressive state. “These people inspire pity, not a desire to follow them,” said Mr. Ferrer, who is based in Santiago de Cuba, the island’s second-largest city. “We’re trying to avoid reaching people with speeches of losers.”

Mr. Ferrer says his goal is not the type of sudden, dramatic overthrow of the Castro government that many Cuban exiles have historically favored. Rather, he said, Cuba’s opposition movement must become sufficiently empowered to get a seat at the table.

“We need to become large enough to force the regime to negotiate,” Mr. Ferrer said, acknowledging that it will take time to get enough Cubans to believe that siding with the opposition is worth the risks. “No one wants to bet on the horse that’s losing the race.”

-josecc81-daniel-ferrer1

José Daniel Ferrer

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FELIZ NAVIDAD Y PROSPERO AÑO NUEVO

Caridad-del-Cobre-42 Caridad del Cobre, by Natasha Chaviano, Havana 1997

A great historic week in US-Cuban relations.

A fine Christmas gift to all. A win-win-win-win result for the Cuban people, the United States and its citizens, Obama, Raul Castro and almost everyone else.

Not the end of the beginning (as Churchill said after the Battle of Britain) but the beginning of the end of the embargo.

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REACTIONS TO DECEMBER 2014 US-CUBA STEPS TOWARDS RAPPROCHEMENT: Farber, Feinberg and Piccone

SAMUEL FARBER, “THE ALTERNATIVE IN CUBA

Jacobin, December 22, 2014

 Original Article Here: The resumption of US – Cuban relations is a real victory. But Cuban workers face renewed economic liberalization with little political opening.

…………

Conclusion

Independently of the considerations that led the governments of Cuba and the United States to reach this agreement, it is a major gain for the Cuban people.

First, because it acknowledges that the imperial power of the US was not able to coerce the imposition of its socio-economic and political system, handing a victory for the principle of national self-determination. It is up to Cubans and Cubans alone to decide the destiny of their country. Second, because in practical terms, it can improve the standard of living of Cubans and help to liberalize, although not necessarily democratize, the conditions of their political oppression and economic exploitation, making it easier to organize and act to defend their interests in an autonomous fashion against both the state and the new capitalists.

This has been the case of China, where thousands of protests occur every year to protect the standard of living and rights of the mass of the population in spite of the persistence of the one-party state.

Contrary to what many liberals thought right after the Cuban Revolution, the issue was never whether the end of the blockade would lead the Castro brothers to become more democratic. That possibility was never and is not in the cards, except for those who believe that the establishment of Cuban Communism was merely a reaction to American imperialism instead of what Che Guevara admitted was half the outcome of imperialist constraint and half the outcome of the Cuban leaders choice.

What is real is the likelihood that the end of the blockade will undermine the support for the Castro government thereby facilitating the resistance and political formulation of alternatives to its rule.

That Cuba will be free from the grasp of US imperialism even if the economic blockade comes to an end is not likely. The more “normal” imperialist power broadly experienced in the Global South will replace the more coercive and criminal one of the blockade era, especially if a successful alliance develops between American capital and the native state capitalists of the emerging Sino-Vietnamese model, as it happened in China and Vietnam. Even at the purely political level, there are many conflicts that are clearly foreseeable, like, for example, one that was left unmentioned in the Obama-Castro agreement involving the return of revolutionary exiles, such as Assata Shakur, to prison in the United States.

With the passing of the historic generation of revolutionary leaders within the next decade, a new political landscape will emerge where left-wing opposition political action may resurface and give strength to the nascent critical left in Cuba. Some may argue that since socialism of a democratic and revolutionary orientation is not likely to be on the immediate agenda, there is no point to put forward such a perspective. But it is this political vision advocating for the democratic self-management of Cuban society that can shape a compelling resistance to the economic liberalization that is likely to come to the island.

By invoking solidarity with the most vulnerable, and calling for class, racial and gender equality, a movement can build unity against both the old and the emerging oppression.

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Richard Feinberg,DIPLOMATIC SHOCK AND AWE: OBAMA ELATES CUBANS,

|Brookings, December 22, 2014 9:00am

Original Here: Diplomatic Shock and Awe: Obama Elates Cubans

………………….

Focusing on Next Steps

The U.S. bureaucracy is now under pressure to transform Obama’s promises into deeds. The upcoming April Summit of the Americas in Panama sets a deadline for issuing the new regulations liberalizing travel and commerce. In a speech before the National Assembly on December 20, Castro announced that he would personally attend the Summit, where he would “express our positions with respect for all of the other heads of state.” So the Panama conclave will bring Obama and Castro face-to-face. They will want to be able to report real progress in warming relations and in improving the economic prospects of ordinary Cubans.

Already there is speculation that the Panama Summit will witness a second round of initiatives, fed by Obama’s pledge to discuss with Congress a formal and full lifting of economic sanctions.

Both governments have raised hopes. But the Cuban government, accustomed to operating in deep secrecy, will have to learn how to manage popular expectations in a more relaxed international environment—where the United States can no longer be blamed for its own economic mistakes. And if promises are kept, Cuba will finally enter a post-Cold War era where informed citizens have ready access to the Internet and a world of information.

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Ted Piccone ON CUBA, OBAMA GOES LONG AND CASTRO HOLDS ON”

Brookings, December 22, 2014 9:51am

Original Article Here: On Cuba, Obama and Castro

Introduction

It’s hard to overstate the sense of relief and joy that was felt in both Washington and Havana as Presidents Barack Obama and Raúl Castro simultaneously announced a breakthrough in their two countries’ long-running hostilities. There was, of course, much anger and hand-wringing as well and a host of questions about what happens next. But it’s worth taking a moment to understand how both sides got to this point and why it portends a major shift in U.S. foreign policy and potentially, in Cuban society.

………………….

.Conclusion

The head-snapping confluence of events on December 17—the simultaneous presidential announcements and returning flights home of prized Americans and Cubans; the holiday season celebration of loss and redemption and hope in the Jewish, Catholic and Afro-Cuban traditions; and the powerful language employed by President Obama in particular—make this a watershed moment in U.S. foreign policy. It marks the beginning of the end of five decades of hostility between two proud neighbors with distinct systems of governance. It symbolizes the end of the Cold War just as tremors of a new cold war between Washington and Moscow are growing. It signifies a reset in U.S.-Latin American relations on the eve of an unprecedented summit meeting of all the region’s leaders. It recognizes the failure of comprehensive punitive sanctions against a general population in favor of targeted sanctions for specific transgressions, as recently adopted in the case of Venezuela. It underscores that democratic change cannot be imposed by external coercion but only by supporting indigenous citizen movements willing to take the difficult and brave steps to demand it themselves. It declares the end of the strangle-hold of a minority faction of Cuban-American hardliners on an important foreign policy issue that affects all Americans. And most importantly, it restores hope on both sides of the Florida straits that change will continue, as it must, to improve the livelihoods and rights of millions of citizens in both countries. It was the big enchilada.

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POLL: SUPPORT INCREASES FOR LIFTING CUBA EMBARGO, TRAVEL RESTRICTIONS

Washington Post: December 23 at 7:00 AM

By Scott Clement

Original Article here: Poll on Embargo

A large majority of Americans support establishing diplomatic ties with Cuba, and even larger — and growing — majorities support an end to trade and travel bans to the country, according to a new Washington Post-ABC News poll.

The national survey finds little erosion in public support after President Obama announced sweeping changes in U.S.-Cuba policy, despite his weak approval ratings nationally. Sixty-four percent support establishing ties with Cuba, similar to 66 percent in a 2009 Post-ABC poll asking whether the United States should do so.

Sixty-eight percent support ending the trade embargo with Cuba — up 11 points from 2009 — and 74 percent support ending travel restrictions to Cuba — a jump of 19 points from five years ago. The poll described each policy in general and did not mention Obama’s action, maintaining broad comparability to previous surveys.

Poll
Washington Post-ABC News poll Dec. 17-21, 2014 among 1,011 adults conducted on conventional and cellular phones.

Support for allowing trade and travel with Cuba has grown across the board, even among Republicans, who were most skeptical. In 2009, 36 percent of Republicans said the United States should end the trade embargo and 40 percent favored an end to travel restrictions. But support has grown more than 20 points among Republicans in the years since, with 57 percent now supporting trade with Cuba and 64 percent supporting travel between the countries.

But Republicans continue to split on establishing diplomatic relations with Cuba overall, with 49 percent supporting and 47 percent opposing the idea — a similar split to 2009. The intra-party disagreement was aired publicly this week by two potential GOP presidential candidates, as Sen. Marco Rubio (Fla.) forcefully rejected Obama’s move and Rand Paul (Ky.) voiced encouragement.

Leaders of the Republican-controlled Congress appear to be following Rubio’s lead and seeking ways to block Obama’s new policy, according to the Post’s Paul Kane and Ed O’Keefe. Key possibilities include cutting funding for new diplomatic operations and denying confirmation to an ambassador to Cuba. At minimum, Congress could ensure the ban on most imports and exports between countries remains in place.

The GOP aside, majorities in nearly every other major demographic group in the survey support establishing diplomatic ties with Cuba, along with scuttling travel and trade bans. Independents support renewed diplomatic ties by a 63-32 margin, with 67 percent supporting lifting the embargo and 72 percent backing travel between countries. More than three quarters of Democrats support all three proposals tested in the poll.

Hispanics are among the most supportive of re-starting diplomatic relations with Cuba; 75 percent support doing so, while 20 percent are opposed. The survey did not include a large enough sample of Hispanics or detailed questions to examine attitudes of Cuban Americans.

A separate survey of Americans with Cuban heritage conducted by Bendixen & Amandi International found the group closely divided on Obama’s decision. Forty-four percent agreed with “Obama’s announcement to begin normalizing relations with Cuba,” while 48 percent disagreed. The survey , sponsored by El Nuevo Herald, the Miami Herald and the Tampa Bay Times, found a clear generational split, with 64 percent of U.S.-born Cubans supporting Obama’s policy while 53 percent of Cuban immigrants opposed it.

The Post-ABC poll was conducted Dec. 17 to 21 among a random national sample of 1,011 adults reached on both conventional and cellular phones. Results from the full survey have a margin of sampling error of plus or minus 3.5 percentage points.

The Bendixen & Amadni poll of was conducted Dec. 17-18 among a random national sample of 400 Cuban-American adults reached on conventional and cellular phones. The sample was drawn by oversampling areas where the Census indicates Cubans make up a larger share of the population. Overall results have a margin of sampling error of 4.9 percentage points.

 

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ANALYSIS OF THE PORTFOLIO OF OPPORTUNITIES FOR FOREIGN INVESTMENT IN CUBA

Completer article is located here: From the Island #25, Investment in Cuba  

From the Island #25, Cuba Study Group  December 22, 2014

An analysis by Rafael Betancourt and Omar Everleny Perez (Centro de Estudios sobre la Economia Cubana, Universidad de ka Habana) of the portfolio of opportunities created by Cuba’s new Foreign Investment Law No. 118

 CONCLUSIONS

The Portfolio of Foreign Investment Opportunities suggests that the Cuban government has adopted a proactive posture and is clear as to where it wants to direct and promote investments. It is much easier to stimulate the influx of foreign capital when there are precise ideas of what they are looking for. But the legal framework per se is not enough. It is necessary to organize / adjust (poner a punto) the entire environment for doing business in the country, which includes the banking system, customs and the tax system, as well as telecommunications, domestic trade and the real estate market. The potential for exporting TIC services, for providing consulting and other professional services, in association with various national investors including cooperatives, could attract a significant amount of FDI and provide well-paid jobs to an important number of professionals in the country.

The Portfolio underscores mainly large investments, to the detriment of small and medium ventures, when they—in fact—are not mutually exclusive. The international practice demonstrates that medium enterprises tend to be more active in FDI that large multinationals, which have other interests associated with global value chains. In subsequent editions there should be greater number of opportunities for infrastructure projects, especially design and construction of highways and bridges, currently very deteriorated, together with telecommunications, to employ global technologies of e-commerce and messaging, among others.

The Portfolio prioritizes production for export, which will have a large import component. The country will need to guarantee the necessary facilities and flexibility of related institutions and mechanisms related to both. The excessively centralized form of planning that prevails today will need to be adjusted to the new times. 

Nor does the Portfolio encompass all possible foreign investments with the State sector: negotiations continue for projects under consideration before the Portfolio was published, others that stem from bilateral and multilateral agreements signed between Cuba and other nations, and still others such as those associated with the rehabilitation of the Havana Harbor, which changes function and morphology with the transfer of many of its industrial and port activities to Mariel and other areas.

Finally, agility in the decision-making process is an essential component in order for foreign capital to arrive with the swiftness that the Cuban economy requires, even though it has been a very gradual process to date. But the undercapitalization and accumulated needs require a quicker pace than has been adhered to until now.

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

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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