USAID/Cuba, a Schizophrenic Policy

By Tracey Eaton (

My Schizophrenic Brain

HAVANA TIMES — If Washington’s policies toward Havana were a person, the poor soul would likely be confused, maybe even schizophrenic.

U.S. officials try to starve Cuba into submission with economic sanctions for more than five decades.

Then they undermine sanctions by allowing Cuban-Americans to travel freely to the island, dumping fistfuls of cash on the island.

Regime-change programs – democracy programs, whatever you call them – are another peculiar feature of the U.S. approach.

The U.S. Agency for International Development, or USAID, has spent more than $200 million on these programs since 1996. They are explicitly designed to influence internal affairs in Cuba and boost freedom. And no matter how noble the cause might be, the programs are at odds with development work in most parts of the world.

The programs also operate under increasing secrecy at a time when governments and NGOs move toward greater transparency. See, for instance:

  • Publish What You Fund, a global campaign for aid transparency
  • aidinfo, which promotes development aid accountability, and
  • Avco openaid, designed to show people how development funds are being spent around the world.
Keith Bolender. Photo: Juventúd Rebelde
Keith Bolender. Photo: Juventúd Rebelde

Even the U.S. government has gotten into the act with its Foreign Assistance Dashboard, which tracks foreign aid, and its so-called Greenbook, a historical record of U.S. aid to the rest of the world and USAID’s release of new datasets and technological tools meant to boost transparency (See April 30 announcement).

But Uncle Sam’s initiatives have done little to reduce the secrecy surrounding USAID’s Cuba programs, which remain unlike development programs in most of the world.

Take the case of the United Kingdom. The foreign secretary there dispenses development aid only if he is convinced that the money “is likely to contribute to a reduction in poverty.”It’s not just a pledge – it’s written into the law. See International Development Act 2002.

In sharp contrast, a key U.S. government goal in Cuba is to increase poverty, not reduce it.

Keith Bolender writes in his 2012 book “Cuba Under Siege”:  “…There is ample evidence to suggest that America is enacting collective punishment on the people of Cuba with the intent of precipitating the overthrow of the socialist experiment…”

Douglas Dillon, under secretary of state during the Kennedy administration, helped set the tone in 1960 when he said it was Washington’s duty to cause “rising discomfort among hungry Cubans.”

The strategy continued in the 1970s, according to “Cuba Under Siege,” which quotes a CIA officer as saying: “We wanted to keep bread out of the stores so the people would go hungry.”

Tom Paulson. Photo: Infinity Box

Efforts to suffocate Cuba continue today. Yet while trying to squeeze the Cuban economy, American officials also allow Cuban-Americans to send more than $1 billion in remittances to their families every year. It’s a sensible humanitarian gesture, but it erodes the impact of the sanctions that U.S. officials so carefully enforce.

Time passes and these contradictory measures remain in place, ever more ingrained, part of aninstitutionalized machinery that has cost American taxpayers hundreds of millions of dollars.

In February 2012, Desmond Butler of the Associated Press focused on one piece of that machinery – a USAID program that sent American Alan Gross to Cuba to set up a satellite Internet network. Butler’s article began:

“Piece by piece, in backpacks and carry-on bags, American aid contractor Alan Gross made sure laptops, smartphones, hard drives and networking equipment were secreted into Cuba.

The most sensitive item, according to official trip reports, was the last one: a specialized mobile phone chip that experts say is often used by the Pentagon and the CIA to make satellite signals virtually impossible to track.”

Tom Paulson, a former reporter at the Seattle Post Intelligencer, wrote that the AP story added to an “ongoing discussion within the federal government about ‘re-inventing foreign aid.'”

Paulson runs a website called Humanosphere, which analyzes the latest news in global health, development and poverty. He was strike by the AP’s claim that Gross was smuggling satellite telephone cards that aren’t available to the public and are “provided most frequently to the Defense Department and the CIA.”Paulson said U.S. officials said Gross “was just carrying out the normal mission of USAID.” He wrote:

Juan Ramón Quintana
Juan Ramón Quintana

“Huh? This is the normal mission of USAID? This is certainly normal for the CIA, or those other branches of government legitimately set up to undermine authoritarian regimes around the world….

“But is it wise, and in our long-term interest, to be enlisting USAID in this cause as well?

“Should the agency that was set up primarily to bring food to the starving, medical supplies to the injured or otherwise engage in America’s humanitarian causes overseas also be doing covert political work against hostile foreign governments?

“Is there a need to more clearly delineate foreign aid from foreign policy?”Some countries have objected to USAID’s intrusions. Russia kicked out the agency in September 2012.

On Wednesday, President Evo Morales announced that his government would expel USAID from Bolivia.

USAID had operated in Bolivia since 1964. Juan Ramón Quintana, minister of the presidency, said today that the agency did not reduce poverty in the country. Instead, it directly interfered in Bolivian affairs from 1985 to 2005 and sought to maintain “political control” over Bolivia, Quintana said.

Patrick Ventrell
Patrick Ventrell

“No one said anything” because ruling political parties benefitted from the “rain of dollars,” he said.

“We have done rigorous research and what Bolivia should know is that the United States has not destined money for distribution to the poor, but rather to preserve its strategic interests outside its borders.”

State Department spokesman Patrick Ventrell told reporters that Bolivia’s accusations were “baseless.” He said the agency’s goal was not political meddling, but “to help the Bolivian government improve the lives of ordinary Bolivians.”

Whatever the case, Bolivia’s move was not a surprise. In June 2012, Bolivia along with Cuba, Ecuador, the Commonwealth of Dominica, Nicaragua and Venezuela signed a document calling for the expulsion of USAID from their borders.

The document stated: “…USAID, through its different organizations and disguises, acts in an illegal manner with impunity, without possessing a legal framework to support this action, and illegally finances the media, political leaders and non-governmental organizations, among others.”

Despite that glaring diplomatic red flag, “Bolivia’s decision to expel USAID came as a shock to the United States, as no one in Evo Morales’ government had complained about the U.S. development agency’s activities,” Agence France-Presse reported Thursday.

Mark Lopes
Mark Lopes

Mark Lopes, deputy assistant administrator for USAID’s Bureau for Latin America and Caribbean, told AFP that the agency had heard grumblings about USAID from the Bolivian government, but “we always found cooperative partners and government officials within all levels of government.”

Either the AFP story is inaccurate or Lopes is incredibly disingenuous. Bolivian officials had signed a document calling for the expulsion of USAID. That is not a mild complaint or a “grumbling.” That is a message telling USAID to start packing its bags.

On the issue of transparency, Lopes told AFP: “This idea that we’re not transparent, not telling who we’re funding, is simply false.”
Link:  State Department cable outlining USAID strategy in Venezuela in 2006.

Note: This article was shared with the Center for Democracy in the Americas as part of a six-month collaborative project with the non-profit group. See more about our collaboration here.

13 thoughts on “USAID/Cuba, a Schizophrenic Policy

  • May 12, 2013 at 1:06 pm

    Burgess, your personal anecdotal experience is misleading. The empirical evidence gathered tells another story. But you are right, Cuba does evoke a love or hate impression. Why do you think Capriles is funded by the US? Because, if elected, he appears to be more likely than Maduro to have a relationship with the US? Wow, hard evidence! Thank you for considering my comments to ‘blessings’.

  • May 11, 2013 at 5:20 pm

    The official conversion rate is 1:1, the CADECA rate is 25:1. This discrepancy has caused a phenomena called marked segmentation, where different economic agents interact with the two currencies and amongst each other using different rules.

    When state owned enterprises or public services need supplies available only in CUC they acquire them at 1:1 rate, while the the private sector and individuals who need CUC have to use the CADECA rate of 25:1.

    The true conversion rate should have been way lower than the initial 25:1, the 14:1 comes from applying a 3% inflation rate on the USD (pegged to the CUC) over 20 years to the original 25:1 rate and in a fair world the rate should be favoring the CUP instead of against it. But this is not a fair world, not by any stretch of imagination.

    As for the black market, well, as every unregulated market is opportunistic and is NOT going to fall down the official conversion rate on its own but follow closely the CADECA one. That said, you should compare the black market prices of products and services, not the currencies. But the black market is a complex mosaic and the available data pretty bad and that renders useless almost any analysis.

    And no, the creation of the CUC has no role whatsoever in the taxation of dollar, you can achieve that by moving the CUP conversion rate at will. The only advantages of the CUC is that it serves to inflate artificially the value of the labor with foreign partners allowing the government cash the difference and as I mentioned before, it masks the huge income disparity.

    The way it works, a foreign or mix business operating in Cuba pays their wages in CUC at 1:1 conversion rate to an intermediate agency that collects the money and pays the workers in CUP at 1:1 rate. The difference in value, of course goes to the government. This is pretty stupid, because turns the huge advantage of a cheap, qualified labor force in the international market into a less competitive mess of disgruntled employees tired of being skinned by their own government.

    As for the last point, you must understand that the concept of tax is foreign to them and has been so for more than 50 years. Cubans do not pay taxes, their meager salary all theirs to use and they have no clue about what GST means. The only ones paying any kind of taxation are the self-employed, but thats a big joke, since they usually only pay a fix rate and rarely any income tax at all and the government don’t get a share of the product and service they offer.

    The decision to create the CUC was ideological in nature, because they can’t simply answer how is possible that a waitress earns 10 times more income than a surgeon, so they created this little counting trick to keep things in check and their little utopia floating.

    But that was a big mistake and they are paying dearly the consequences. As a result of political cowardice, their economy is completely messed up, so any policies they try to implement is completely ineffective because of the complexity that the two currencies introduce, to the point that even the most basic questions (i.e. is sugar production profitable?) can’t be answered categorically.

    And of course, it didn’t solve the issue of income disparity in the population, because regardless of what the official accountability said, the waitress is still earning 10 times as much as the surgeon and it can help but reflect in her standard of life.

  • May 10, 2013 at 4:47 pm

    I find these comments really interesting and would be great if you did a full article in HT. Unfortunately I don’t understand everything. It would seem daft to apply a 1:1 for accounting when there is an exchange rate 1:25. Where and why would they publish this data. Are you saying that the true conversion rate would be 1:14 — If so wouldn’t that mean that you would get an unofficial rate on the black market rather than the official exchange rate. Why would unifying the currencies create inflation if the rate of CUPs were set to their true value?

    Also wasn’t the creation of CUCs a way of applying tax on dollar exchanges and therefore redistributing some of wealth given that not everyone had relatives who could send them remissions. Wasn’t there some benefits of having two currencies in that the CUP is protected to some extent from international currency fluctuations, unlike for example the crisis in the Eurozone?

    Finally wouldn’t some of the problems be sorted if they took some money back off the waitress or people working in tourism / joint ventures. This could be by taxing them on the estimated real value of their wages or by reducing their pay and then using this to pay more to professionals in other sectors. A bit harsh I know, but probably necessary.

  • May 10, 2013 at 12:46 pm

    I have been going to Cuba for over twenty five years and one of the things that has always amazed is the amount of people who keep coming back.Cuba is a place you either love or you try it once and go somewhere else.For years people told me to go to Cuba but I listened to people like Moses instead of going and seeing for myself.And yes I think the US is funding Capriles .If Cuba is beyond salvation Moses would not feel he has to bless us with his words of wisdom every thirty minutes

  • May 8, 2013 at 12:38 pm

    I would like one or more of the spin masters who post here to explain operation Northwoods to me.I have read the officiat version.

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