Visions of a post-embargo Cuba
It seems that the U.S. trade embargo on Cuba is the constant thread of the narrative here at Babalu Blog and wherever the issue of Cuba and its dictatorship is discussed. It feels like every day someone new comes along and says, “well it hasn’t worked in fifty years so isn’t time to try something new?” The purpose of this post is not to discuss the origins or intent of the embargo, we’ve discussed that ad nauseam, but rather to look into our crystal ball and see what a post-embargo Cuba would look like without the regime first making any significant changes to its economic and political systems. In other words, giving the castro brothers exactly what they have been asking for since the Soviet Union collapsed.
Tourism
The first implication of lifting the embargo is that Cuba will be legally open to U.S. tourists for the first time in half a century. Now it’s interesting to ponder the fact that the castro regime’s creation myth begins with Cuba as a tourist playground for wealthy Americans who frolicked on Cuba’s beaches and gambled at tables of Cuba’s casinos while a dictator oppressed the Cuban people during the 1950s. Certainly it was not U.S. tourists that “liberated” Cuba from Batista. But now somehow American tourists possess some magical power to bring about change, at least that’s what embargo opponents would have you believe.
So what would a Cuba full of American tourists look like? Not too different than Cuba today. How can I say that with such certainty? Well because Cuba plays host to more than 2.3 million international tourists annually today, far more than ever went to Cuba during the 50s. The fact is that hotel capacity is currently limited to about 2.5 million visitors per year so the influx of American tourists will only increase the total number of visitors marginally. What it will do however is drive the price of hotel room nights up as demand temporarily outstrips supply.
So you’ll have a few more tourists visiting Cuba with all of them paying a premium to do it. What will they do there? Well certainly they’ll be staying at all-inclusive resorts like this one where the employees are selected by the regime and paid a fixed wage of roughly $20 a month by law. They’ll also be taking “cultural tours” like this one and enjoying the Jet Skiis and motorboats. They’ll be photographing all of the pre-castro landmarks (because nobody ever comes back from Cuba showing off their snapshots of Soviet Era apartment blocks) and getting drunk. The point here is that all of this already taking place yet the much ballyhooed people-to-people exchanges have not resulted in any significant change in the day-to-day lives of the Cuban people.
Additionally, American tourists will find Cuba’s resorts and hotels to be substandard when compared with other Caribbean destinations. At least that’s what Canadian and European tourists have found. They shouldn’t be surprised that facilities are not maintained and service is shoddy, after all it is a communist dictatorship.
Staying in the arena of tourism, American hospitality companies will be legally allowed to operate in Cuba. Let me clarify, they’ll be legal as far the U.S. government is concerned. They’ll have to meet with the approval of the castro regime, more specifically it’s military apparatus that runs the tourist sector. American companies will have to submit to Cuban laws, just like they must submit to the laws of any country they operate in, with the difference that they usually don’t operate in totalitarian communist dictatorships. So American companies will be forced to comply with Cuba’s labor laws which forbid the formation of independent labor unions and much more. In short, American companies will be business partners with castro, inc. Again, this is nothing new. Companies like Canada’s Sherritt and Spain’s Sol Melía have been engaged in such arrangements in Cuba’s tourism industry for almost two decades. So where are the results?
Trade
The embargo is starving Cuba’s people, or that is what embargo opponents would have you believe. That point is belied by the fact that U.S. is currently Cuba’s largest food supplier. That’s because food and medicine is currently exempted from the embargo as long as it’s paid for in advance by the castro brothers in cash. And therein lies the rub. The castro brothers don’t want to pay in cash. They don’t really want to pay at all. They want a big credit card so they can run up a bill in the U.S. like they have done with every other country they do business with. We should not be surprised when a post-embargo Cuba owes hundreds of millions or billions of dollars to the U.S., after all it’s a communist dictatorship. You might be thinking to yourself that any business that lends money to the Cuban thugocracy, with its track record of deadbeat-edness, deserves to lose its money. Well that would be true except that it’s you and I, the American taxpayers, that will be footing the bill. How do I know? Well because you and I, the American taxpayers, are the ones that fund institutions like the Export-Import Bank of the United States, which according to its mission statement, "assume[s] credit and country risks that the private sector is unable or unwilling to accept." So in this day and age of taxpayer funded bailouts for failing American corporations we would be subsidizing the operations of a failing Cuban communist dictatorship.
And it won’t just be for agricultural products. The castro brothers will “purchase” all kinds of goods from American businesses, goods that they will re-sell in official government stores at ridiculous mark-ups. How do I know this will happen? Well because it’s what happens now with goods that the castro brothers buy from China, Japan and all the other industrialized countries that haven’t cut Cuba off yet for non-payment. The mark-ups are ridiculous because there’s no private competition permitted in Cuba. It’s a communist dictatorship after all.
So what will the castro brothers do with the sudden but temporary influx of dollars that lifting the embargo would represent? Will they spend it to improve Cuba’s crumbling infrastructure or improve the quality of life of Cuba’s people? No, of course not. The castro brothers will use their windfall to buy weapons, jets for themselves, tools for further repression of the Cuban people and to subvert other countries. How do I know this? Well because it’s what they have always done in the past when they have had the resources to do it. We shouldn’t be surprised, because that’s what communist dictatorships do.
Diplomacy
Lastly are the diplomatic implications of lifting the embargo. In a post-embargo Cuba we can assume that diplomatic relations will be “normalized” between the two countries. That means that for the first time in nearly fifty years the United States would operate an embassy in Cuba and vice versa. The United States would join every other western democracy in that regard. What change can we expect from such a monumental shift in tactics? Well maybe we’ll see a photo op for Hillary Clinton, or maybe even President Obama, standing next to raul castro where the latter will deny that Cuba has any sort of political opposition and that Cuba has no political prisoners. How do I know this might happen? Well, because it’s what we’ve seen before. Remember, it’s a communist dictatorship.
Conclusion
So what’s the common denominator here? Cuba is a communist dictatorship. We can make all the changes we want to American foreign policy and it won’t fundamentally change the nature of Cuba’s government. Only people in Cuba can do that. So we have a fundamental choice. Do we want American tourists soaking up sun on Cuba’s beaches while they prop up the military sector of the communist regime there? Do we want American companies forging joint partnerships with the oppressors of Cuba’s people, facilitating that repression and exploiting Cuban workers? Do we want American taxpayer money strengthening Cuba’s repressive apparatus and going toward subversion of other countries? Do we want U.S foreign policy to close a blind eye to Cuba’s human rights abuses just so that we can say we have “normal” diplomatic relations with a communist dictatorship?
Without a clear answer to how American involvement in Cuba would be substantially different than that of other countries, for me, the answer is no to all of the above. There is simply no evidence that a change in U.S. policy to one that has been adopted by almost every other western democracy will yield any different results. And the downside as I have articulated here is substantially more than one might think at first blush.
As insane as it may sound I think we generally agree on what will happen. I could nitpick...and God knows I love to but given how much there is it would be stupid for me to be petty. Contrary to popular belief I am not petty.
I think this is an excellent case for any unilateral changes on our part. Then again even I have trouble negotiating away the whole embargo. I would however, be willing to negotiate pieces for something say...exit permits for those that have already been granted US Visas. Another piece say for fugitives hiding out in Cuba. Heaven for bid an agreement on reparations are made cuz from shock alone I would give up the whole thing. That being said regardless of what is negotiated I completely, totally, wholeheartedly agree things will get worse for the cause of freedom in Cuba.
Good stuff, Henry. I bookmarked it for handy reference...also:
"You blockheads play into Castro's hands with this embargo!..He secretly WANTS it so he can blame!...yada..yada..yada...!" we've all heard this broken record.
If so, then why have all agents thus far outed, from outright Intelligence (like Ana Montes) to influence (like Sweig, Wilhelm, Marifeli, etc) promoted an END to the "embargo"--while undercover as agents?
If Castro "secretly wants it", shouldn't his agents have been secretly promoting it?
Unreal
[...] Gomez en Babalú Blog: Visions of a post-embargo Cuba. var addthis_language = [...]
Not sure if Castro wants the embargo - he'll take the fee cash but I do believe that he will do whatever he can to keep the US at bay. Fidel had a tendency to get feisty when Dems who wanted to kiss his butt would be in office. He needs the bogeyman to remain the bogeyman but he wouldn't mind if the bogeyman forked over dough.
It depends how you view it, if your viewing it from a exiled Cuban perspective this makes sense BUT Cuba should not dictate US policy towrads its own citizens.
The USSR is gone and Cuba thanks to a socialist economy is a third world Basket Case.
I do not think we should lift the emabrgo (WITHOUT CREDIT) and allow travel simply because I think a tourist will turn their Mojitos in Molotoff Cocktails and overthrow the tyrant (he is not a dictator) and his little bro, I think that because the embargo and travel restrictions restrict the rights of citizens here in the US and those specific policies Mirror those of the Cuban regime.
Cato, I have libertarian leanings myself but if there's one thing that constitution expressly mentions about the power of the federal government, it's in the arena of regulating trade. And the way the embargo is structured, it's a trade policy. It's about spending of dollars in a foreign country. The fact is that there are many ways an American can visit Cuba. What's restricted is spending money there as a tourist. The embargo exists because the castro brothers are responsible for the largest expropriation of American assets in history thus your comparison of U.S. policies to castroite ones is horseshit.
Let's all collectively beat the shit out of Castro, and feed him to the dogs of the island! Huh? Huh? Who's with me? Lol
In my opinion (speaking strictly as an outsider) and with respect, you guys are spending way too much time and energy debating 'good embargo vs. bad embargo'.
First, without credit (money) courtesy of the US congress, there is no rebuilding of anything in Cuba, Miami knows it, the CCP knows it. Val articulated the point concisely in his latest anti-Yoani rant with "Who in Cuba is the US exactly supposed to do business with" or extend credit to? Answer: The FAR.
Seriously, this is what you are afraid of? The President of the United States handing a $100 million dollar check to a FAR General? Chance of that happening (without a riot) while Val, Henry, Humberto, and another 1.2 million Cubiches in Miami are still breathing? Slim to none (with Sr. Delgado leaving on a balsa last month). And believe me, you could count on a lot of Yumas rioting with you (not the sign/flag waving type of riot, more the cocktail/brick type).
Second, the embargo never worked effectively - because EVERY Cuban (not on the island) on the planet sends aid (big stack of dollars & more) to his extended family on the island, somehow, someway. And if he happens to be the one in a million who doesn't (which means there are 11 Cubans who don't) - he sure as hell knows someone who does.
Right now today, there is now a golden opportunity to slap Fidel Inc., hard, in his pocket book, sitting in Miami's lap, and no one (to my knowledge) is organizing to make it happen.
Too much defensive playing from the Miami team these days, not enough offense. I don't know why that is, the Cubans used to cause trouble like nobody's business.
Golden Opportunity, to smack Fidel Inc, on table... right now.....
Gabe,
I think you make a good point, unfortunately we can't play offense today due to the fact that Congress is controlled by left wing Democrats that are sympathetic to the Castro regime and our current POTUS who is sympathetic to the tyranny too (regardless of what he says).
The fact that so many Cuban exiles that are traveling to the island with the excuse to visit family these days without disregard for the consequences of their actions (those consequences are that they are bringing the revenue that helps the tyranny stay afloat, period) plus the influx of money remittances from exiles further complicates the issue.
The Castro tyranny is on the upswing today as they control most of Latin-America, with a sympathetic EU on their side, money coming from exiles and Venezuela and not an ounce of effective outside pressure that puts the tyranny in-check.
No wonder Raul Castro had the fucking balls yesterday to open-up his lying mouth and shout his string of lies regarding the death of Orlando Zapata Tamayo. It is freaking sickening and unbelievable if you asked me.
The Castro brothers know very well today that they can do very much what they want in the island and in the hemisphere as there is no an effective opposite force to either confront or oppose them.
And the fact that the people in the island are so afraid to revolt and fight for their freedom that it further complicates the issue.
It is a sad and painful reality but, it is what it is.
Unfortunately until we get the lefties out of the US Congress in November and the Marxist anti-American bullshit artist out of the White House in 2012 and we replace them with real leadership that stands to the Castro brothers we'll be in this freaking predicament.
Correction,
Unfortunately until we get the lefties out of the US Congress in November and the Marxist anti-American bullshit artist out of the White House in 2012 and we replace them with real leadership that stands-up to the Castro brothers we'll be in this freaking predicament.
Gabe,
I appreciate your comment and respect your right to your opinion, however, I have to take umbrage to a couple of your points.
First, we write about the embargo not by choice, but by need. From day one of this present administration, efforts to eradicate the embargo and all trade and travel restrictions have increased exponentially. The calls for lifting the embargo are coming at us from all angles and all sides, most of them with the standard boilerplate language espoused by the regime in Cuba. if we do not take the time to make a cogent argument depicting our point of view and the reason why the embargo is more important now than ever, who will?
Second, the President of the US will never hand a $100 million dollar check to fidel and company. That's absolutely true. But, lifting the embargo will most certainly lead to allowing Cuba credit for its purchases and trade. Specifically when it comes to agribusiness from agricultural states where farms and other agricultural businesses are heavily subsidized by the US tax payer. And, as Henry pointed out above quite succinctly, when the regime defaults on those "loans" or credit, the responsibility for repayment will fall upon the American tax payer in one way or another. Now, you may have no problem as a tax paying American funding the repressive regime in Cuba, but I, and am sure many many more, do.
I have to interject here and tell you that this statement:
And believe me, you could count on a lot of Yumas rioting with you (not the sign/flag waving type of riot, more the cocktail/brick type).
makes me think you are a complete fucking asshole. I can assure you that none of us here, nor 99% of the Cuban-American population would resort to "cocktails" (molotovs as you are insinuating) or brick throwing. And, for a guy with supposedly "the place" to be with regards to Cuba on the net, you surely dont know squat about Cuban-Americans. Our community doesnt throw bricks or bottles filed with flame inducing liquids. we throw money at political action committees and cast votes. Much much more powerful than any brick through any window.
Third, you state the embargo never worked effectively - and in some areas you may be right - but just consider what the Americas would be like right now, had the castro regime had billions of dollars at their disposal. You sir, might just be speaking in Cuban right now, asere.
"we throw money at political action committees and cast votes. Much much more powerful than any brick through any window."
Gabe,
Val is right as we're law abiding American citizens and we don't resort to rioting and burning. Our opponents wished we were this way as it would give them ammunition to further discredit us.
For my part I was only addressing the offense/defense playing issue you were mentioning.
Val, first, apparently, no humor.
Second. There is a long history of effective coctail/brick protest in this country. I am disappointed to know that no Cubans would be supportive of such action (I don't know why we are debating it as it is about as relevant as Disneyland). I would suggest such action would in fact be legal and a patriotic duty if the President of the United states were using the wealth of this country to subsidize said totalitarian regime.
Third. Washington will be more than happy to take all your money and votes. It will make big promises (as it has done for 50 years). Let's see: Kennedy, Johnson, Nixon, Carter, Reagan, Bush I, Clinton, Bush II, Obama - all came down to Miami, stood up, made speeches, took your communities money - and then did ... nothing.
Honestly, the "did nothing" statement is not totally accurate. I guess I would have to argue the cause of Cuban liberty has actually been subverted and betrayed (and lives of many Cubans destroyed) by many an American politician's cowardice and deliberate betrayal.
But next election it is going to be different?
Am I clear in my understanding? The Cubans in Miami are now "waiting" until the "correct" group of people take power in Washington, and then "hoping" that those men will be inspired to take action that leads to change in Havana?
Oh and by the way, I would love to be able to speak Cuban: I can't because 1) you guys talk way too fast and 2) I can't figure out what the hell killing Lola has to do with telling the time.
Opportunity.... Golden Apple.... on table....
Gabe:
I've come into the game late and I'm a little confused. If you would be so kind to indulge me and provide a description of just what "Golden Opportunity" is sitting on the table, I would appreciate it.
Just how do you propose we slap Fidel, Inc. in the face?
Alberto you're correct,
At this point our options at slapping Fidel,Inc. are extremely limited.
Alberto, don't you see the golden apple on the table? To give fidel exactly what he wants! That'll teach him to ask for hundreds of millions of dollars!
My eyes ain't what they used to be, Henry. Nevertheless, I'd still like Gabe to give me the details of that Golden Apple.
Henry I see Your horse chip and raise you two. The Companies ripped off by Castro where private concerns and last i looked not protected from their losses in foreign countries by the Constitution (at least not the US Constitution).
I would understand concerns if Cuba still had support of USSR and had a viable militray, none of those conditions exist today.
I do not think the US government should be in the business of muscling third rate banana republics in order to collect for private companies who went in knowing full well the risk involved with investments outside the US (particularly in the carribean, central and south america).
Restricting a citizens movement and how or where he spends his money is similar to what the Cuban Government does to its citizens (excuse me slaves).
BTW hundred million dollars will be the price of admission to a movie thaetre if these clowns in DC keep spending and printing the way they have for the last 40+ years.
"Restricting a citizens movement and how or where he spends his money is similar to what the Cuban Government does to its citizens (excuse me slaves)."
Oh my God, how dare anybody tell Cato how to spend his money or move around the world, gees, he's and American!!!! Who gives a rat's ass why or what our purpose is in asking him to go anywhere he wants but to refrain from throwing money at a tyranny, oh no, the point here is not the freedom of a people, it is the right of an American. How blind are we?
Personally I would rather make it rain at a local cat house than spend my coin in Cuba, but seriously my point is that as US CITIZENS, yes we should be able to spend our dinero where we damn well please and go where we please without being restricted by our own Government.
Whether it be Chile under Pinochet, South Africa during Aparthied or yes Cuba with the old vulture looking half dead tyrant.
No politicain even if elected by the masses should have that type of control over "free" citizens. My eyes are wide open, but seems like some folks around here have blinders on and can't tell the forest from the trees.
I generally agree with Henry's post, but I have another take on the tourism issue. He wrote:
"Well because Cuba plays host to more than 2.3 million international tourists annually today, far more than ever went to Cuba during the 50s. The fact is that hotel capacity is currently limited to about 2.5 million visitors per year so the influx of American tourists will only increase the total number of visitors marginally. What it will do however is drive the price of hotel room nights up as demand temporarily outstrips supply."
If the hotel prices are driven up by market forces, that means more money for the regime and that is as good as increasing tourist numbers.
Also, room capacity in Cuba does appear to be on the rise. Many hotels are presently under construction (apparently China has at least one big resort planned, and probably more to come soon), and if the doors are thrown open to American tourists then I am sure that more hotels will quickly come on line.
But forget all of that.
I think a bigger impact anyway might be from a huge surge in day trip visitors and cruise ship port of call visits. I understand that Jamaica had about 1.8 million tourists per annum staying in its hotels a few years back, but another 1.1 million cruise ship passengers in the same year who stopped over for day visits (the numbers may be a little off, but that's approximately what was reported on one tourism web site). If Cuba is suddenly open to American tourism and American-based cruise ships are permitted to dock in Cuba, I think that would significantly inflate the tourist numbers - even if no more hotel rooms were added.
Sorry Cato,
Maybe you’re the one who doesn’t see the forest from the trees, just think about it.
It is not like we have blinders and don't see the forest from the trees but it is more than your sense of freedom and liberty to do as you please would be sponsoring those regimes that clamp on those same liberties and freedoms that you so champion.
Just think about it.
You still don't get it, I personally won't go to Cuba but I am opposed to any state telling its citizens where they can or can't go.
Travel and trade restrictions are contrary to principles of individual freedom and rights.
You don't fight tyranny with tyranny even on a lesser degree, it defeats the purpose.
Cato,
This is my point, think about it.
If the US will let its citizens go whenever they want, many of those citizens would travel and sponsor countries that should not be sponsored with USD because people can be very irresponsible with their choices.
Your concept on freedom to travel is very noble and believe me I fully understand it but you most understand too that there are many stupid Americans that are willing to sponsor these same countries that should not be sponsored because many Americans don't give a rat's ass about traveling to countries where the people are totally oppressed by their own regimes (such as it is the case in Cuba).
My whole point is that people should not have the freedom and liberty to sponsor regimes that don't uphold freedom and liberty.
I disagree with you on this point as this is not fighting tyranny with tyranny on even a lesser degree. To me this is a matter of principle that many American tourists that travel to oppressed countries could care less to uphold.
I personally won't go to Cuba but I am opposed to any state telling its citizens where they can or can't go.
I am opposed to any state telling its citizens to wear their seat belts, not drive over 75 miles per hour, not smoke marijuana, etc. etc.
BTW there are several ways you can go to Cuba legally.
As long as the last two are mutuatlly exclusive I agree. There should be NO federal laws prohibiting the use of any substance.
I know people can go legally to Cuba but the system is kind of kafkaesque, and that's expected from communist regimes but not from the land of the "free."
"To me this is a matter of principle that many American tourists that travel to oppressed countries could care less to uphold."
Someone could have used that same exact argument to restrict travel to Chile while Pinochet was in power , that's why I have my reservation about travel restrictions. It's not that I care to go to Cuba, South Africa or Chile its that once the state is granted a power and a precedent is established how it will be used in the future is unpredictable.
You miss the point which is there's a whole host of things Libertarians don't agree with like Medicare, Social Security, etc. etc. that aren't going anywhere. And by the way there's a much more direct argument that the federal goverment doesn't have a right interfere in those arenas than in the arena of commerce which as I have already argued is expressly mentioned in the constitution.
Article I, Section 8, Clause 3:
[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;
There's a reason why people who travel to Cuba legally have to get a license from OFAC (the office of foreign asset contro) which is part of the treasury department. Because it has to do trade and commerce.
[...] You can read more about the real life facts of bringing democracy to Cuba, one mojito at a time, here. [...]
[...] Cuban people food and medicine in an attempt to drive the Castro’s from power. Never mind that food and medicine is exempt from the embargo and the U.S. is one of the largest suppliers of food and medicine, as well as [...]