The Direction of the New US-Cuba Relations

Foto: Ernesto Cruz
At the wheel.  Photo: Ernesto Cruz

HAVANA TIMES — During January the US and Cuban governments took their first step towards restoring diplomatic relations (announced in December) and setting up embassies in their respective countries. Likewise, by executive order, exceptions to the US Travel Ban on Cuba were implemented and some lesser aspects of the embargo were removed. Sam Farber, the author of Cuba Since the Revolution of 1959: A Critical Assessment is interviewed here by Lance Selfa about the new developments.

What do you see as the main reasons in the thaw between the U.S. and Cuba at this time? Talk about it both from the U.S. side and the Cuban side.

Sam Farber — I think there were factors that pushed this development on both sides, although the timing was open. Certainly the end of the Cold War, and the withdrawal of Cuba from Africa around the same time, downgraded the importance of Cuba in U.S. foreign policy to the degree that it was barely mentioned in any of the strategic studies that got published by the Defense and State Departments in the last couple of decades. So that relaxed the pressure from the old Cold War point of view.

There’s also the fact that American capitalists were increasingly in favor of trade with Cuba. In 2000, the U.S. approved legislation excepting the export of processing and agricultural goods to Cuba, and Archer Daniels Midland, Tyson Foods and several other U.S. companies got in to trade with Cuba. There are a lot of companies, with the exception of right-wing fringe types of capitalists, who are in favor of that. Also, the Pentagon has for some time been in favør of resuming relations. They have regular meetings with the Cuban authorities to discuss the logistics of the Guantánamo naval base, drug interdiction and other issues.

And, last but not least, the significance and importance of the right wing in Miami has declined. The Dade County area still has three Cuban-American right-wing members of Congress, but support for those politics has declined, and the composition of the Cuban community has changed quite significantly. The majority of Cubans and Cuban Americans in Southern Florida today are people who arrived since 1980. And that majority is growing as more Cubans arrive. At least 20,000 to 30,000 Cubans are arriving in the U.S. every year, and the older generation is dying away. Nevertheless, that generation still retains a great deal of control over the media and the political system, because they’re wealthier people.

All these factors on the U.S. side have contributed to create a favorable situation where politicians found it appropriate for all sorts of reasons to move on the issue of Cuba.

From the Cuba side, the country faces a pressing economic situation, with a tremendous lack of investment. The Cuban economy minister has estimated that they need about $2 billion a year to achieve a takeoff. Cuba reinvests capital at half the rate of the rest of Latin America, and productivity is low by Latin American standards. Economic growth has also been very low in the last few years, at slightly over 1 percent in 2014.

So all of those things created a situation in which both sides were open for a change in relationship, and with the 2014 elections done, Obama saw that this would be a perfect political moment to do it.

Can you characterize the extent of the opening of diplomatic relations? As I understand it, Obama can do certain things on the executive side, but the Congress would still have to repeal the Helms-Burton Act. Can you tell me what are some of the limitations of the arrangement at this point?

SF: The Helms-Burton Act, which Congress and President Bill Clinton approved in 1996, forbids any economic activity between the United States and Cuba–for example, American corporations investing in Cuba. That is forbidden by the law. Obama has made small indentations in the periphery of what that law covers to relax not only the political but the economic relationship between Cuba and the U.S. For example, he was able to liberalize remittances from Cuban-Americans in the U.S., which are bound to increase from $1.5 billion a year to over $2 billion in the coming year. So there will be at least a 25 percent increase in remittances during 2015. So he was able to do that, but the heart of the problem is that full economic relations with Cuba and the U.S. still is forbidden by Helms-Burton.

It’s up to Congress now to amend, change or repeal the Helms-Burton Act. There are a significant number of Republicans, such as Sen. Jeff Flake of Arizona, who are in favor of doing that. Whether there will be enough Republicans and Democrats to do that remains to be seen. Some Democrats, like Sen. Robert Menendez from New Jersey, are dead set against it because he is a Cuban American who has been allied with the most right-wing elements in South Florida’s Cuban community for many years. It’s not a clear-cut Democrat/Republican issue; it cuts across the party lines, and I have not yet seen any numerical assessment of how many Republicans and Democrats are willing to go for repeal. That remains to be seen.

Cuba by night.  Photo: Ghyslaine Peigné
Cuba by night. Photo: Ghyslaine Peigné

What would it mean for Cuban Americans who have family in Cuba if Helms-Burton isn’t repealed?

SF: The modifications around the edges of the Helms-Burton Act that Obama has made have significantly changed the situation for Cuban Americans in the sense that they can now, for example, send a pretty much unlimited the amount of money to close relatives, like parents, sisters or brothers, in Cuba. Travel to Cuba has been liberalized on the Cuban side and now from the American side, so there are bound to be increasing numbers of people visiting. There were quite a few already especially since the Cuban government began allowing Cubans to use tourist hotels. Then, Cuban- Americans begain to bring their relatives in Cuba to the hotels. So Varadero, which is the principal resort in Cuba, is full of Cubans whose hotels are being paid by their relatives in Miami who come to visit.

So a lot has already changed, and it will change even more. There will also be things they won’t be able to do. For example, the Cuban-American Fanjul brothers, who are major sugar mill owners in Florida who were very hostile to the Cuban government, have made a turn to favor economic relations with Cuba. They went to Cuba and talked with the Cuban government, but they won’t be able to bring in millions of dollars and open a new, modernized sugar mill or refinery in Cuba. That they won’t be able to do.

Many on the left have characterized this opening as a victory for the Cuban people. How do you see it?

SF: I also see it that way in the sense that to an extent–and I think it’s a substantial extent–the diplomatic relations with Cuba is a blow against the notion that the U.S. has the right to impose its preferred socio-economic and political system on Cuba and, if Cuba doesn’t accept this, then the U.S. is going to punish them economically. Not through the mechanism of market forces, but by political extra economic means. Keep in mind that it was an economic embargo/blockade, not the market that contributed to the misery of the Cuban people. Neoliberalism is supposed to be big on the forces of the market. This is political power interfering with the market and imposing penalties on Cuba, which are totally outside what bourgeois neoliberalism supposedly allows as legitimate. So to this extent, it’s a defeat for those who think that the U.S. has the power to approve a foreign government and foreign economic system, and if they don’t approve it then to punish them through extra economic means. So in that sense, there’s no question, it’s a victory.

I was going to ask about a State Department delegation holding high-level talks in Cuba in January, and then New York Gov. Andrew Cuomo has announced that he is going to lead a trade mission. Is there anything further to say about that?

SF: I guess that all of these government missions to Cuba are going to significantly increase Cuban tourism in the next year! A Democratic congressional delegation recently visited Cuba, Gov. Cuomo is planning to go there, and U.S. Secretary of Commerce Penny Pritzker is also planning to go to Cuba soon. I recently saw a declaration that was signed by very important politicians and business people, including George Shultz who was Secretary of State under Ronald Reagan, essentially pushing for normalization of relations with Cuba. They don’t explicitly talk about repealing or modifying Helms-Burton, but they pretty much imply it. It’s signed by establishment figures like former New Mexico Governor, UN Ambassador and Energy Secretary Bill Richardson and Shultz, so obviously there’s a big push in official U.S. politics and business to move toward normalization.

What impact do you think the re-establishment of U.S.-Cuba relations are going to have on Latin America? I’m thinking mainly about Cuba hosting the talks between the Colombian government and the FARC guerrillas, and Cuba’s close relationship with the Venezuelan government. What impact do you think this will have on the broader role of the U.S. in the region?

Viviendo con vista al mar. Living with a view of the ocean.  Photo: Ghyslaine Peigné
Living with a view of the ocean. Photo: Ghyslaine Peigné

SF: One of Obama’s considerations in re-establishing relations with Cuba was changing the U.S. posture in Latin America and removing a continuing source of irritation–and a significant one–in Latin America against the U.S. I think that was very much part of the calculation. In that sense, it would make it easier, in a particular sort of way, to deal with Venezuela and other countries in the hemisphere—particularly the center-left, some of them less radical like Ecuador and some more radical like Venezuela. It will make it easier to some extent for the U.S. to confront those countries if they have neutralized the Cuba issue.

I’m not suggesting for a minute, as others are, that Cuba is going to diminish its support for Venezuela and the other center-left countries in Latin America. That’s not going to be the case while present circumstances remain. But it will make it easier for the U.S. to deal with those countries. So I think that the foreign policy considerations were part of what Obama factored in. This was also the case with people like George Shultz who signed petitions calling for a normalization of relations. This was definitely part of the equation.

Do you think this opening is going to inaugurate a process of political change in Cuba itself? If so, in what direction, and does the U.S. care one way or the other?

SF: Yes, I think that that it is a longer-term question. In the meantime, there’s no question that it’s a victory for the Cuban government. As a matter of fact, the Cuban government has had the gall to attack dissidents on the grounds that they were endangering the new relations with the U.S. such as the case of performance artist Tania Bruguera who tried to have a show in the Revolution Square, and was prevented from doing so and arrested. Government spokespeople had the chutzpa to accuse her of disrupting the resumption of relations with the U.S. Before, the accusation was that dissident were playing into the hands of the blockade, and now you’re playing into the hands of disrupting relations with the U.S! .

In the medium and longer term, I believe that it will undermine the legitimacy of the government because there’s only so much, and only for so long, you can continue to claim that the economic problems in Cuba are simply the fault of the embargo. Especially if Helms-Burton is significantly modified or repealed. I think that in the medium-to-long run it will definitely undermine the legitimacy of the ideology of the Cuban government, which has argued that that this is the principal reason why things are so screwed up economically in Cuba.

The Cuban government is pretty enamored of the economic model of China or Vietnam. Do you think that’s where it would like to head? And given what you’ve just mentioned about the possibility of political change, or change within Cuba, is that viable?

SF: Well, I think that they’re aiming for that. By the Vietnamese and the Chinese model, I don’t mean that that Cuba can draw on the countryside like China did to beef up its industrial labor force. The rural population of Cuba is only 25 percent of the population. That’s very different from China and Vietnam. I don’t mean it in the sense of specific economic policy. I mean in the sense of a model of a social system where there’s a one-party state, lack of democracy and, at the same time, the allowance of substantial private investment–particularly foreign investment in important industry–with the state reserving for itself, as they have done in China the commanding heights of the economy ie, banking for example, which so far it’s monopolized by the Chinese state. In that sense, I think that’s what the Cuban government is aiming for.

The problem with Cuba has been that they move two steps forward in that direction and then take a step back. I suspect the reason is that there’s bureaucratic resistance to moving in that direction because a lot of bureaucrats are going to lose their power. They are going to lose the bailiwicks where they have power. Raúl Castro has tried not to be too disruptive of bureaucratic power, so in that sense it has been a contradictory process.

I saw that Cuba recently created an export-processing zone in Mariel. Do you think the economic planners want Cuba to become an export-processing zone like there is in Vietnam or Macau?

SF: SO FAR, the Mariel port hasn’t been successful. The Odebrecht Organization, a very large Brazilian corporation, has invested a tremendous amount of capital in renovating and modernizing the port of Mariel, which includes a free trade zone. They claim they’re waiting for the building of the Panama Canal to be finished, which will be necessary in order for big boats to use Mariel as a stepping stone to come to the States or to Europe. But so far it hasn’t been successful.

The fact of the matter is that, at this point in Cuba’s economic development, it hasn’t much to offer by way of industry or agriculture. What it has to offer, and it’s already heavily engaged in, is services. For example, there’s a tremendous amount of enthusiasm for tourism. In 2014, Cuba had 3 million tourists. It’s conceivable that by the end of 2016 it will be 4 million tourists. That’s going to place tremendous strains on the infrastructure of Cuba and on the hotels, so it might be likely that Spanish and European capital will be interested in increasing their stake in the hotel business in Cuba. It requires a lot more hotels, and it requires a whole infrastructure the hotels require.

There’s also the possibility of biotechnology and pharmaceuticals. There are already one or two projects concerning the joint development of drugs produced by American corporations in Cuba. That might expand, but I think that’s a much longer-term prospect.

Is there anything else that I missed that the readers should know?

SF: Over the medium to long run, I think there will be a challenge to the predominant ideology of the Cuban government, which justifies its economic status in terms off the blockade. That may facilitate the development of resistance in Cuba, and in that sense a certain liberalization which already has been happening–not democratization but liberalization will help. It would then make it possible for people to protest more openly than has been possible up to now.

In China, even though you have a one-party state, the fact that tens of thousands of protests occur every year has made it possible, among other factors of course, to increase wages in China to such a degree that some companies are pulling out of China. Bangladesh, for example, has become a big garment place because China is no longer “affordable.” To the extent that liberalization may create more room for people to organize themselves and to protest, that will be a positive development.
This article originally appeared, with changes, in 1/27/15.

14 thoughts on “The Direction of the New US-Cuba Relations

  • “John” is a frequent commenter to HT who annoyingly extolls the point of view that neither China, Vietnam nor the Soviet Union were or are communist/socialist countries. I sort of agree with him that if Mao and Marx were alive today, they would not recognize their progeny governments.

  • Well you brought up “John”, what suddenly now have amnesia/
    Alzheimer’s? LOL

  • You’re right! John who?

  • John who?. Unlike you and your other accounts spouting manufactured opinions in a coordinated manner. The rest of us are independant thinking and not sharing notes or opinions. So we do have different perspectives and are fine with that. Please check wikipedia for facts, if you need to validate mine. China is officially a communist/socialist country. Similar to how America is officially a mess.

  • You lefties need to get your story straight. John Goodrich claims China is NOT socialist, but rather State Capitalist and here you are suggesting the opposite. Which is it? By the way, check your numbers. What is the average wealth of the Chinese citizen today?

  • Not to be left out the rising #2, that Obama just went to visit and was gushing to continue building trade relations with “We, the people of INDIA, having solemnly resolved to constitute India into a one Sovereign _Socialist_ Secular Democratic Republic and to secure to all its citizens:”

  • Yes Socialism has succeeded in moving a billion people in China from post imperialist/colonialist war ravaged country to a country about to supersede America in GDP and output. A global superpower. Might it also add, holding the American economy in the palm of its hands.

    You need to make this a bit more challenging for me!

  • Cuba already is a Pirate Theme park, with that pair of brigands, the Buccaneer Brothers of Biran sailing the pirate ship “Revolucion” and hoarding all the booty. What Pirate Ship would be complete without a pair of talking parrots, named Granma & NYT?

    Ahoy, I spy Yanquis & gusanos! Now hand over all yer ducats!

  • “History is on the side of Cuba and hopefully the people and the government will remain a socially balanced system that respects the dignity of Humans and races.” What? What history? Where? Has socialism succeeded somewhere else? Does respecting the dignity of Humans include the weekly arrest and beating of middle-age women marching peacefully after Sunday mass? I agree with your last sentence but let’s not re-write history. The fact that Cuba NEEDS to ‘open up’ the country and seek a new future implies a closed country and a current future that seems bleak. What does the tragic street crime in the US have to do with any of this?

  • Americans show their true dignity to each other through violent armed crimes and unrelenting cycles of boom and bust and victimized by crony capitalism. History is on the side of Cuba and hopefully the people and the government will remain a socially balanced system that respects the dignity of Humans and races. Money comes and money goes but standing up to 50 years of imperialism Cuba has shown the strength of its people. I am very happy that Cuba is going to start a new future and a opening up of the Country and people to new opportunities.

  • President Obama just delivered his 2015 – 2016 budget to Congress. I suspect his focus in the next few months will be on his domestic agenda. After that, the summer will bring out the early presidential contenders. Contentious issues, like US/Cuban relations will largely be avoided by politicians. I don’t see this issue maintaining traction. Besides, the US can afford to wait it out. It is the Castros who hear the clock ticking.

  • The regime has little choice but to move to a more competitive production model. Bureaucrats and other state apparatchik litter these socialist economic deserts. Nothing works better than competition to find efficiencies. That’s why regulated market economies work. The Cuban’s have perfected the art of state control, balancing a little market freedom with state control of main levers of the economy should not be that hard to pull off.

  • My question is :::: Varadero needs a Pirate Theme Park – who is going to build it – operate it – own it ? Last year 1,175,077 Canadians visited Cuba and many enjoy theme parks sush as Disneyland.

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