Cuba’s new economic measures and how they may impact its emigrants

Por Jesus Arboleya (Progreso Weekly)

HAVANA TIMES – The Cuban government has just announced the implementation of a wide range of new economic measures. Although there are details of its scope and instrumentation still not known, it has been reported that these are decisions previously approved in the last two congresses of the Communist Party of Cuba (2011 and 2016), and by all the country’s governing bodies and through popular consultation.

So it can’t be said that they were conceived to fight the economic consequences of Covid-19, but it is evident that the pandemic catalyzed decision-making and helped overcome the resistance of the sectors that until now had slowed down its application. Therefore this could also reflect a new correlation in the country’s political body regarding these issues.

In fact, one of the government’s challenges will be to overcome the mistrust generated by this stage of immobility and convince public opinion, both nationally and abroad, that it is ready to move as quickly as possible to apply the reforms. President Miguel Díaz-Canel emphasized that maintaining popular support depended on the success of the new measures and tied its consequences to the general population’s standard of living.

Although they are measures that are of an endogenous nature and aimed at stimulating national production, organizing the internal market and improving the balance of foreign trade, their impact on emigration is explained by the close relationship of these persons with Cuban society. It once again demonstrates how important it is to take into account Cuban emigrants when designing national policies.

Decisions such as the creation of small- and medium-sized businesses, the promotion of foreign investment in the food production sector, the expansion of the market in convertible currencies, and the elimination of the tax imposed on the dollar since 2004, may be incentives for greater participation of emigrants in the national economy. The same results from the announced extension of activities for the exercise of self-employment, as well as the possibility of mixed investments where all forms of ownership intervene. To that we can add the approval of non-state-owned import and export businesses through the State’s foreign trade companies.

Essentially, if the expectations generated by the government’s announcements are met, a policy of stimulating the participation of emigrants in the economy is developed, and the appropriate legal frameworks to achieve this are established, the country points toward a new economic dynamic, which should facilitate the advancement of more inclusive policies towards its emigration in other aspects.

From an economic point of view, this dynamic that can benefit not only Cuba, but also its emigrants at a very difficult time for the economy everywhere. Although the blockade limits potential of investments in Cuba, the participation of émigrés in the Cuban economy has resisted attacks and has been maintained over time, including through channels that have not had government authorization on either side.

An improvement in relations with the United States, which cannot be ruled out based on what happens in the upcoming U.S. elections, combined with encouragement and better guarantees for these investments by the Cuban side, can trigger this interest more intensely than what happened during the Obama administration, since at that time the Cuban government did very little to stimulate them.

As for possible niches for these emigrants in this area, Cuban specialists have mentioned the expansion of businesses that already exist, such as the marketing of various goods, the internet and telephony, as well as restaurant services and lodging. One can also add investment opportunities in high-tech businesses and in the modernization of other productions, such as agriculture and construction, where contributions can be made with different levels of capital, business know-how, and new markets. These new emigrant investors can, at the same time, be nourished by the existing and highly skilled workforce the country possesses, and at a more competitive cost.

Beyond the possible profits, investing in Cuba has special attractions for its emigres. An obvious one is contributing to the well-being of their families, but also in many cases there are cultural factors and the motivation to reintegrate into the national life. It can be argued that this interest is not always exempt from unwanted political intentions, but the same is true of the entire process of stimulating private investment, even at the national level, and that is the political challenge that the government faces when implementing this policy.

In fact, implementation has been the argument used by those who have opposed this opening. The problem is that, under current conditions, a fully nationalized economy has been shown to no longer be functional to the country’s interests. Private investment is a necessity, not a disposable option, so you have to assume it and learn to deal with it, even if it involves violating the comfort zone of those who advocate maintaining the current economic model.

Solving this problem will determine Cuba’s future and the emigrants are an inevitable part of the process. Whether it is for better or worse will depend on the intelligence of the policies that are implemented. Paraphrasing an old maxim of spiritual consultants: “Destiny is in our hands.” This ability to decide without outside interference is a luxury for Cubans. Let’s take advantage of it.