Cuba’s Serial Monopolist
This week, the Castro regime’s new customs regulations took effect, whereby most personal goods carried by travelers into the island will now be deemed “commercial” — and thus, fall within the domain of the state’s import monopoly.
According to Cuban customs officials, the new decree seeks “to keep certain people from using current rules on non-commercial imports to bring into the country high volumes of goods that are destined for commercial sale and profit.”
(These “certain people” are those who operate in the informal sector — the “black-market” — which Castro has perennially tried to bring within his control.)
This latest decree provides some important lessons (reminders), particularly for those who advocate “trade” with Cuba:
1. In Cuba, all foreign commerce (trade and investment) is the exclusive domain of the state, i.e. Fidel and Raul Castro. There are no “exceptions.”
2. In the last five decades, every single commercial “foreign trade” transaction with Cuba has been with a state entity, or individual acting on behalf of the state.
3. The state’s exclusivity extends also to what the rest of the world considers to be “humanitarian” transactions, i.e. all U.S. agricultural sales to Cuba have been solely with the regime.
(For further details, read “In Cuba Policy Debate, Theories Don’t Cut It” in The Huffington Post.)
Meanwhile, to those who argue that Castro’s latest “reforms” are irreversible (unlike its similar “reforms” in the 80s and 90s, most of which were eventually rolled back) — think again.
Finally, it proves the worst thing U.S. policymakers could do is institutionalize trade “with” Cuba, including (theoretically with) state-controlled actors (e.g. so-called “cuentapropistas”) — for all such “trade” would go through the state’s monopolies.
Doing so would effectively mark the end of the informal economy (“black-market”) — arguably Cuba’s most dynamic sector — and further expand the regime’s import absolutism.
Never has a monopoly been broken up by increasing its revenue and market share.
Thus, all current U.S. “trade” with Cuba — namely agricultural sales — should have a caveat:
That it be independent of Castro’s import monopoly.