Cuba–US Relations: Which Court is the Ball In?

By Pilar Montes 

PIzzeria. Photo: Juan Suarez

HAVANA TIMES — Only the most general aspects of the conversation Presidents Barack Obama and Raul Castro had on the afternoon of September 18 are known, but one needn’t have a crystal ball to be certain that the measures Washington had just announced to relax the embargo were the main topic of discussion.

Any announcement of this nature creates expectations among Cubans, who long to see an improvement in their quality of life, own a decorous home and get in touch with their many relatives and friends who live abroad from the comfort of their homes.

The measures announced include the lifting of restrictions on remittance sums sent to Cuba from the United States. This decision requires no response from the Cuban government, as the amount anyone may receive from abroad has long had no limits in Cuba.

Another item has to do with the development of communications in Cuba, through investments from US companies.

This point does require an official Cuban response, now that the government is quickly installing Wi-Fi networks in all provinces and computer clubs at many locations, claiming, nonetheless, that it is still unable to offer home Internet connections.

A magnificent opportunity to overcome this problem was lost, for the time being, when Google’s president visited Cuba and offered Internet equipment and connections to everyone in the country and met with no reply from authorities.

Among the measures approved by the United States on September 18 and which came into effect yesterday is authorization for US travelers to open accounts at Cuban banks during their stay in the country.

Cuban bank. Photo: Caridad
Cuban bank. Photo: Caridad

Since January, US credit card companies (including MasterCard) have been expressing interest in having US visitors to Cuba use their credit and debit cards in their transactions on the island. Eight months later, this has not yet been authorized owing entirely to US blockade restrictions.

Though US “people-to-people” visitors continue to be limited to 12 existing trip categories (now more flexible), the number of visitors Cuba welcomed during the first half of the year has notably increased, growing by 50 percent in comparison to last year.

Now, authorized US citizens may travel with their families and do so by sea or air, without the need to making stopovers in third countries. Regular tourism, however, is still prohibited.

The United States has also authorized US companies based in Cuba to employ Cubans residing on the island. Under the current foreign investment law, however, these companies will have to go through a State employment agency for all personnel contracts. The Cuban agency offers these companies professionals and charges the employees a high percentage of their salaries. This indirect hiring mechanism has been highly criticized as an obstacle to investment.

There is no shortage of US companies interested in investing and still unable to do so, though the recently-approved measures have greenlighted the creation of joint ventures.

The US Trading with the Enemy Act was not revoked but recently extended, and fines and sanctions applied to banks, firms and businesspeople who maintain dealings with Cuba are still in effect.

The Las Avenidas cafe.
The Las Avenidas cafe.  Photo: Juan Suarez

Trade continues to be one-way, preventing a dynamic interaction between the two markets. Meanwhile, the US dollar continues to be prohibited by Washington for use in Cuba, providing another obstacle to normal commerce.

An example of the kind of interaction that is now possible was the recent authorization granted by the Cuban State for Sony Music and Cuba’s EGREM label to sign an agreement that would allow the former to promote Cuban music worldwide.

The authorization granted US firms to establish product distribution facilities in the Mariel Special Development Zone could benefit the scant and at times inexistent product supplies at State retail chains. Such products would, however, continue to be sold at prices beyond the reach of average Cuban wage-earners.

Without a doubt, the establishment of FedEx and UPS facilities in Cuba could speed up mail distribution on the island and facilitate family and business-related communications, but it remains to be seen whether the Cuban State will allow its Empresa de Correos de Cuba to establish an agreement with these US firms.

The new measures also envisage loans and payment term extensions by US companies for the sale of authorized products, but this is still tentative, as Cuban firms are still not allowed to hold accounts in US banks or to pay in US dollars.

The United States’ willingness to allow its companies to sell Cuba building materials and supplies could be of great benefit in terms of repairing the country’s deteriorated housing infrastructure and the building of new homes, and, most importantly, for expanding the island’s hotel network, which is already beneath demand in the tourism sector.

In the meantime, we continue to wait to know to what extent the Cuban State is willing to accept these new offers and the obstacles beset by the complex legal structure of the embargo that continue to prevent their implementation.

7 thoughts on “Cuba–US Relations: Which Court is the Ball In?

  • Patience, patience lads!!! This is just the beginning nothing will happen overnight but it WILL happen, it’s just a matter of time. The Castro’s days are surely numbered. If you want permanent change it has to be done with thought & consideration not rushed into.

  • Good analysis Marti! It’s tiring just reading all this but would hate to imagine what the average Cuban must endure. I do think Carlyle gives a very clear picture as to what is
    happening with those living outside the major cities and it’s pathetic to even imagine.
    One day at a time!

  • It is obvious as you indicate that currently there are a lot of words flying around, particularly from the media. I think you are overly optimistic in thinking that deeds and practice will follow. Raul Castro Ruz is a dedicated communist and has been so since prior to 1953 when he visited the USSR. He, like the leopard, will not change his spots. Currently he has the wide world thinking that life for Cubans will improve, when he and his big brother (Fidel when younger was 6′ 3″ and way back in 1944 was rated Cuba’s best all round school athlete) have already had fifty six long dreary years to introduce change.
    It is correct that until three years ago, Cubans could not buy and sell their homes or cars. By then making that possible by deciding that the occupants now owned their homes, Raul transferred any responsibility for the property off the shoulders of the State, so the State has no responsibility when a home collapses. As I have said previously, he is full of street smarts. Now there is wifi in selected places at a price which for the average working Cuban earning less than $1 per day, is prohibitive.
    With cars, my understanding is that in the first year, the State agency responsible for sales, sold fifty one cars at exorbitant prices, one of the more modern vehicles a six year old Peugeot, at $83,00.
    You are correct N.J. in writing that for the average person it may (will) be years before life is impacted. Let’s face the truth and with it, reality. The country of Cuba is in a mess, it’s economy is in a mess. successful countries export more than they import – with Cuba, the reverse is the case. Someone in response is going to say that Cuba has the tourism industry. That is a relative success with a claimed 3 million in 2014 (France at over 80 million). But Cuba is a country blessed with considerable areas of good indeed some excellent land – much of which is reverting to bush. Cuba has a workforce of 5.2 million people – producing what?
    Cuba has by far the cheapest labour in the western hemisphere, so what does the regime do? It plans……and plans.
    Yes, I live there most of the year which limits the periods during which I can contribute to these pages – but mind you that is no doubt regarded as a blessing by folks like Rich Haney – who describes me as a “thug” and a “bully” and by so doing, exposes his own inadequacy, his lack of knowledge of the reality of Cuba being self-evident like that of Mr. John Goodrich who has never set foot in Cuba.

  • For the average a Cuban, life may not have changed but things are not the same. The first step in change are words and rationale. Deeds and practice will follow. For the average person it may be years before life is impacted. However for some, such as those using the new wifi spots, that is something they did not have. This said I would defer to your greater knowledge as it appears you live on the Island.

  • Moses, I have been critical of Obama’s foreign policy as it has not produced the change in relations he ran on. It has often lacked thoughtful leverage. But with Cuba, the policy has been masterful. Sure Cuba gets a chance to expand trade and financing but it comes with a price. To plug into world trade, it needs to reform monetary system and settle past defaults. To take advantage of increased tourism, it also must make updates. The changes on trade require Cuba to open it’s private sector as it is private business that is authorized to trade. The changes are helpful to Cuba, but only in so far as the changes to the economic model underway can take advantage.

  • Raul Castro Ruz is displaying the depth of his street smarts and has the free world running around bleating happily that ‘change’ is taking place in Cuba. Donde? (Where).
    There is no change, he has created an illusion and the audience do not comprehend that the illusion is just that. What has changed for the people of Cuba? Nada! (Nothing).
    Repression remains, food rationing remains, poverty remains, the CDR remains, and Raul Castro Ruz’s total power and control remains!
    Where is the change? It is all semantics!

  • The ball is clearly in the Castros court.If Obama does any more for these tyrants unilaterally without an in-kind response from the Castros, he risks losing the dwindling credibility he has that his motivation is unselfish. The overwhelming criticism is that Obama is legacy-building and could not care less about bringing democracy to the Cuban people. The Castros should make the next move or two or three.

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