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.
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?
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.
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.
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.