• 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."

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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HOW THE AMERICAN LEFT FELL IN AND OUT OF LOVE WITH FIDEL CASTRO

By Carlos Lozada, Washington Post, November 25

Review of “FIGHTING OVER FIDEL: THE NEW YORK INTELLECTUALS AND THE CUBAN REVOLUTION” by Rafael Rojas,  Princeton University Press. 312 pp. $35.

Original here: Fighting Over Fidel
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One of the sharpest divides between political and intellectual life is that changing one’s mind is unforgivable in the former and inevitable in the latter. For politicians, consistency is prized; switching positions elicits the dread flip-flopping charge. Among intellectuals, by contrast, dalliances with competing ideologies over the years are an almost required rite before settling on a worldview — ideally one stronger for the journey — that underpins subsequent inquiry.

Historian Rafael Rojas has written an oddly captivating account of the Cuban revolution as a moment when these two worlds clashed, when a political revolt in one nation upended intellectual forces in another. Rather than focus on Fidel Castro, Che Guevara, John F. Kennedy or the other usual suspects of this Cold War era, Rojas tells the story of the left-wing academics, beat poets, Black Panthers and radical journalists in the United States, particularly in New York, who initially embraced Cuba’s transformations only to splinter over Castro’s repression of individual freedoms and the island’s move toward the Soviet orbit. “The complex relation between the New York left and Cuban socialism,” Rojas writes, “oscillated between a sense of the promise Cuba represented for leftist libertarianism and the sense of disenchantment that resulted from Havana’s alignment with Moscow.”

The initial optimism emerged from Castro’s early promises. When the New York Times interviewed him in 1957, in a dispatch from the Sierra Maestra mountains by Herbert L. Matthews, the young revolutionary declared that he held no animosity toward the United States, that his struggle was against dictatorship in his own country. In 1959, during his first U.S. trip, he pledged that elections would come quickly to Cuba, as soon as the revolution’s social transformations to end poverty and improve health and education were underway. “I advise you not to worry about communism in Cuba,” he declared. “When our goals are won, communism will be dead.”

Princeton University Press

At the time, American leftists were inclined to regard the revolution less as a Cold War battleground than as an upstart victory in the global conflict between rich capitalist nations — especially that great imperialist to the north — and colonial or postcolonial countries. So strong was this perspective that in his book “Listen, Yankee,” Columbia University sociologist C. Wright Mills (popularizer of the term “new left”) wrote that “the Cuban Government, as of mid-1960, is not ‘communist’ in any of the senses legitimately given to this Word. . . . The leading men of Cuba’s Government are not ‘Communist,’ or even Communist-type.” By the third printing of the book, Castro had pronounced the socialist character of the revolution and — after the failed Bay of Pigs invasion in 1961 — had lauded the scientific prowess of the Soviet Union, his soon-to-be patron. Waldo Frank, a social critic and historian of Latin America, found himself in a similar plight; his 1960 book “Cuba: Prophetic Island,” arguing that Cuban socialism could develop to be different and independent from the Soviet Union, proved anything but prophetic, as the revolutionary government began evolving into an oppressive one-party regime with a Marxist-Leninist cast.

Condemnation would arrive, though with caveats. In the left-wing journal Dissent, Daniel M. Friedenberg wrote critically of the Castro regime’s “xenophobia, hate campaigns, the retreat into phantasy fears, the dependence on communist support, the swollen Army, the rigid control of radio and press.” But he concluded that such “frightening symptoms of dictatorship” were responses to the colonialist, interventionist mind-set of U.S. foreign policy. The prime mover, the true culprit, was still outside the island; Castro remained absolved.

The beat poets, exemplified by Allen Ginsberg, were less forgiving. Initially impressed by Castro’s meeting with Malcolm X in Harlem in 1960, Ginsberg would soon portray him “as one more Latin American caudillo,” Rojas writes. In his “Prose Contribution to the Cuban Revolution,” published in 1961, the poet decries the mechanisms of social control that he saw in laws and codes against drug use and homosexuality, in communist as well as capitalist systems. “No revolution can succeed if it continues the puritanical censorship of consciousness imposed on the world by Russia and America,” he wrote. And during a trip to Havana in 1965, Ginsberg denounced the regime’s repression of young Cuban writers and even posited that Raul Castro was gay, earning the poet a quick deportation.

Rojas is most energized when discussing the multiple views of the Cuban revolution among African American civil rights activists and leaders of the Black Panther Party in particular, perhaps because their opinions were varied and less easily categorized. Party co-founder Huey P. Newton “advocated subordinating the black cause to a larger socialist cause,” Rojas writes, and admired the mix of nationalism and socialism that he saw in Ho Chi Minh’s Vietnam and Castro’s Cuba. Others such as Stokely Carmichael, however, rejected any prospect of Cold War alliances with the Soviets or did not necessarily link racial emancipation in America to a socialist project, Rojas explains. Meanwhile, Black Panther leader Eldridge Cleaver noted that few of the Cuban revolution’s commanders were black and highlighted the racism in the island’s daily life and ideological rhetoric.

Cuban revolutionary intellectuals, for their part, admired America’s militant black civil rights leaders, even devoting a full issue of Pensamiento Critico, a journal edited by Cuban philosophers and Marxists, to the Black Power movement in 1968, interviewing Carmichael, Newton and others. “The revolutionary struggle of American blacks was demonstrating that it was possible to strike the enemy in its own technologically developed heart,” the editors wrote.

“Fighting Over Fidel” is translated from Spanish, and it reads that way. There are sentence constructions and word choices that I suspect flow more easily in the original. (“Desencuentro,” for instance, is a lovely noun in Spanish, connoting failed expectations and sundered connections; “disencounter” just makes a jarring noise on the page.) And the author frequently reintroduces characters we’ve already met, sometimes just a few pages ago.

Such moments are forgiven, however, when Rojas introduces us to relatively obscure left-wing advocacy groups in New York that supported the revolution, such as the Fair Play for Cuba Committee or the unforgettably named League of Militant Poets. League members published the radical magazine Pa’Lante, featuring works by Ginsberg, photographer Leroy McLucas and poet Michael McClure. Alas, Pa’Lante survived but a single issue before its editors became disenchanted with the Cuban revolution — just another example of the oscillations between enthusiasm and disappointment, sympathy and tension, among distant thinkers observing a distant land. As Rojas puts it, a bit awkwardly but by all means memorably: “The socialist conga dance that these intellectuals of the New York Left joined in 1961 ended like the congas of the Havana carnival always end: in dissolution and complaints.”

A warning: If you’re wondering how the evolution of left-wing thought in New York affected the Cuban government or U.S. policy toward the island — indeed, affected anything beyond itself — don’t look here. Rojas admits early on that “New York’s critical debates on the Cuban Revolution naturally had few effects” on Washington’s approach to Cuba. “Fighting Over Fidel” is intellectual history entirely for its own sake, and as such, it succeeds. If you’re more interested in high-stakes national security dilemmas than in special issues of briefly published Marxist journals, go read “Essence of Decision.” But if you’re curious, intellectually or otherwise, stick with Rojas. I suspect you’ll be glad you did.

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CUBA DETENTE CREATES MIGRANT CRISIS IN MEXICO

Financial Times, 9 November 2015

Amy Stillman in Tapachula, southern Mexico

Original article here: Cuban Migrants in Mexico

As Cuban president Raúl Castro met Mexican President Enrique Pena Nieto on Friday to strengthen trade ties and smooth over past tensions, a new political problem was mounting in the south with the huge influx of Cubans flowing across Mexico’s border.

Almost 6,500 Cubans arrived in Mexico en route to the US in the first nine months of the year, more than five times as many as a year earlier, according to official statistics. And the numbers have continued to surge. Mexico’s national migration institute, INM, said that more than 8,000 Cubans have been processed in Mexico so far this year.

The national human rights commission, CNDH, noted that over a thousand Cubans turned up at the Tapachula migratory station in the space of one week in October, overwhelming migration officials’ capacity to attend them.

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Many Cubans have spent days sleeping rough outside the Tapachula station awaiting processing. Local human rights groups have begun to open their doors to them amid the growing humanitarian crisis.

The Cubans are responding to rumours on the island that the US will soon remove their right to automatic asylum upon reaching US soil. The 1966 Cuban Adjustment Act deems Cubans fleeing the island to be political refugees, a product of the Cold War that sits uncomfortably with the recent restoration of diplomatic ties between Havana and Washington.  The law has already been amended once before, when the US implemented the “wet-foot, dry-foot” policy in 1995, enabling Cuban migrants caught at sea to be repatriated.

The Cubans, meanwhile, are sceptical that the gradual lifting of economic restrictions will improve their lives. Political freedom and economic opportunity, they say, are still lacking on the island.

“The [trade] opening is good, but it is not enough to change the culture in Cuba,” said López, 50, who had arrived at the Tapachula migration office with his wife and two grown children after a gruelling, month-long slog through South and Central America.

López, who asked to be identified with a pseudonym, had earned the equivalent of $25 a month working for the government in Havana. Fearing that the US law might change, in September he and his family made plans to join their relatives in North Dakota, selling their car and scrounging all of their savings to afford the trip, which cost $2,500 per person.  Like so many Cubans, López hopes to find better-paid work in the US. “America is a different democracy, it is a different opportunity,” he said.

While trade barriers in Cuba are slowly being chipped away, the US has yet to lift its 53-year old economic embargo on the Communist-run country, and political reform will take time.  Moreover, few people expect Cuba to become a market economy without going through some economic turbulence.

“Cubans understand that there is a good chance things will get worse before they get better,” said Duncan Wood of the Woodrow Wilson Center in Washington.  “Changing the economic culture of the country is going to be enormously disruptive, so I am not surprised that the number of Cuban migrants in Mexico is up.”

The lifting of travel restrictions in Cuba in 2013 has facilitated this process, with many countries along the route now providing Cubans with transit visas.

Also, increasing numbers of Cubans are choosing the circuitous trek across eight borders because it is less risky and cheaper than sailing directly to Miami. Cubans in Mexico told the Financial Times that the journey overland is half the price of the perilous sea voyage along the Florida Straits, which reaches $10,000.

Mexican immigration officials warn that the numbers arriving across the border continue to climb. Mario Madrazo Ubach, director-general of immigration control at the INM, said: “If 300 people show up in the same moment at the same station, what can we do, build a bigger station?”

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EMPRESA MIXTA ESTADO-COOPERATIVA: UNA PROPUESTA

This interesting proposal was brought to my attention thanks to Jose Luis Rodriguez.

Ensayo original: http://www.perfiles.cult.cu/article.php?article_id=291#sdendnote2sym

Seida Barrera Rodríguez

Un debate que comenzó con el maltrato a la propiedad social en las empresas cubanas inspiró este proyecto. Fenómeno observado desde la cercanía con las entidades visitadas como fiscal del 2005 al 2008, la búsqueda de responsables y debilidades formó parte de la cotidianidad, pero faltó la perspectiva científica. El profesor que luego se convertiría en cotutor, insistió en profundizar cada vez más en la idea inicial de la autora de mezclar otras formas de propiedad con la estatal, y sugirió la cooperativa como una de las alternativas principales.

Habiendo presentado resultados parciales en un evento, con el ánimo de encontrar una organización que reuniera los requisitos adecuados para implementarlos, una colega mencionó que en su lugar de trabajo se advertían muchas de las características de una cooperativa, por el modo en que colaboraban los distintos establecimientos y la camaradería mutua entre sus empleados. Inmediatamente fueron solicitados contactos y entrevistas, y así se arribó a la Empresa de Producciones Industriales Cabildo, en lo adelante Cabildo. Su máximo dirigente, una persona de pensamiento flexible y vanguardista, enseguida se entusiasmó con la posible conversión de uno de sus talleres hacia una empresa mixta, donde el Estado cubano sería copropietario y cogestor con una cooperativa formada por trabajadores de la propia entidad. Para lograrlo, sería imprescindible el registro del proyecto como piloto para su seguimiento durante al menos un año.

Cabildo es una de las nueve empresas que gestiona la Oficina del Historiador de la ciudad de La Habana y no se encuentra en perfeccionamiento empresarial. Está conformada por quince talleres y una oficina central; su objeto social es muy variado: abarca desde el diseño de interiores hasta la costura, pasando por la fundición de las bellas farolas que iluminan esa parte de la ciudad, o la elaboración de banderas. En pocas palabras, sus empleados toman los inmuebles recién reparados o acabados de construir, y los proveen de todo lo necesario: muebles, lencería o pintura, intentando mantener el espíritu del casco histórico.

Los motivos para enfocar los esfuerzos en este frente pueden explicarse con la ayuda de las estadísticas: el 77% de los ocupados en la economía son trabajadores estatales, 3 millones 873 mil, por lo que constituye la mayor fuerza de trabajo a nivel nacional, y se encuentra tan necesitada de incentivos como los sectores cooperativo y privado, que solo representan el 23%.1 Además, en sus manos se encuentran la mayoría de los medios de producción que, conjuntamente con el capital humano, son las claves para incrementar los indicadores de productividad. Por último, existe carencia o debate sobre propuestas concretas en el sector, lo cual se confirma por el silencio de los legisladores, y la creciente flexibilización de las formas de gestión no estatales.

Esta brevísima introducción resume dos años de búsqueda de fundamentos teórico-metodológicos. Perseguimos el diseño, puesta en funcionamiento, legalización y seguimiento de cooperativas de producción y servicios a nivel local; con ello pretendemos seguir el Lineamiento 25 de la política económica y social, que promueve la creación de cooperativas en diferentes sectores de la economía.2

 Leer mas:  EMPRESA MIXTA ESTADO-COOPERATIVA

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Cooperativa de Omnibus Aliados, cerca 1952

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