Cuban economy – Page 2 – dwkcommentaries

Cuban Private Enterprises Offer Opportunities on the Island

Since 2021, with Cuban government approval, “roughly 10,200 new Cuban private businesses have opened, creating a dynamic, if fledgling, alternative economy. . . . About 1.5 million people work for private businesses, a 30 percent jump since 2021, and they now represent almost half of the total work force on the Caribbean island” and about 15% of gross domestic production. While “Cubans working for the state, including white-collar professionals, doctors and teachers, make the equivalent of roughly $15 a month in Cuban pesos, . . . employees in the private sector can make five to 10 times that amount.”[1]

Last year, this sector imported roughly $1 billion of goods, mostly from the U.S. and mostly financed by cash remittances sent by Cubans in the U.S. to their relatives back home. “Across Havana, new delis and cafes are appearing, while entire office floors are leasing space to young entrepreneurs bursting with business plans and products, from construction and software to clothes and furniture.”

An example of such businesses is two Home Deli markets in Havana, which offers a mix of locally made items like pasta and ice cream and imported goods like beer and cereals. They are owned by Diana Sainz, who had lived and worked in Europe, but who returned home to Cuba to open and operate these stores.

Another example is a Havana restaurant, La Carreta, that was reopened by a local restaurant owner and Obel Martinez, a Cuban-Amereican interior decorator based in Miami.

The Cuban government, however, could do more to build this sector. Such businesses are limited to 100 employees. Cuba’s state-owned banks do not allow account holders to access deposits in dollars to pay importers because of the government’s lack of foreign currency to pay its own bills. U.S. sanctions also prohibit direct banking between the United States and Cuba. And the Cuban government has kept major industries off limits to private ownership, including mining and tourism.

Benjamin Ziff, the chargé d’affaires who heads the U.S. Embassy in Cuba, observes, “Cuba is falling apart faster than it is being rebuilt. There is no turning back.’’ He wonders “whether the [Cuban] government will allow the private sector “to expand fast enough and freely enough to meet the challenges.”

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[1] Adams, In a Communist Stronghold, Capitalists Become an Economic Lifeline, N.Y. Times (April 29, 3024).

Cubans Have Difficulty Obtaining Pesos

In recent weeks, ordinary Cubans have begun to form lines outside banks and ATMs in the Cuban capital in search of money to pay for the products or services they use daily.[1]

Omar Everleny Pérez, a Cuban economist and professor at several foreign universities, listed at least four reasons for the lack of cash in ATMs: a growing fiscal deficit, the nonexistence of bills with a denomination greater than 1,000 Cuban pesos (equivalent to three dollars in the parallel market), high inflation and the non-return of money to the banks.

Perez also says “various private economic actors such as small or medium-sized businessmen who receive that money for transactions, but do not deliver it to the bank out of distrust that they will not be able to withdraw them later or to convert them into dollars as quickly as possible before they depreciate.”

Cuba’s Minister of Economy and Planning, Joaquín Alonso Vázquez, said that for the first quarter of 2024, income from exports decreased, imports also decreased, and different key economic activities are not fulfilled, such as the main agricultural production, sugar and other derivatives, as well as electricity generation.[2]

Another Cuban Minister, Vladimir Regueiro Ale (Finance and Prices), said that the budget deficit stood at 22,822 million pesos. The figure is lower than planned, but around 20% of “this decrease was due to the non-execution of a group of Budget items that have a great impact, especially on social policies.“

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[1] The cash shortage deepens the agony of Cubans in crisis, Diario de Cuba (April 29, 2024).

[2] ‘Unfavorable outlook’: the government falls short in the face of the chaos of the economy in Cuba, Diario de Cuba (April 29, 2024).

Cuba’s Worsening Economic and Political Crisis

Emilio Morales, a Cuban who has had wide-ranging marketing experience on the island, is now the President and CEO of Havana Consulting Group, a Miami-based consulting firm specializing in market intelligence and strategy for U.S. and and non-U.S. persons doing business in Cuba.[1]

Morales has provided a detailed analysis of Cuba’s worsening economic and political crisis.[2] The following is part of that analysis.

“The multi-systemic crisis that overwhelms Cubans and that has been caused by the ineptitude and mediocrity of those in power (shielded by lunatic ideological fanaticism and the ambition to control all the country’s wealth, leaves no room to make structural changes that are required to get out of the crisis) has generated a chaotic situation that seems to have no way out.”

‘The country is bankrupt, it has no lines of credit, its energy matrix is collapsed, the three main areas of income have fallen precipitously: tourism, remittances and exports of medical services. The agricultural system is practically paralyzed, the sugar industry is destroyed. The health system, the education system and the transportation system suffer the same fate. There is nothing left to destroy. The only thing that is increasing is poverty and citizen anger, which so far in the last two years more than 600,000 Cubans have resolved by leaving the country.”

“Faced with this reality, the ruling leadership has postponed any forum for debate that exists in the political structures authorized in the country to address the economic, political and social issues that affect the country and its citizens. Months ago, the party apparatus suspended the Second National Conference of the Party, invoking the need to ‘be consistent with the economic situation of the country.’ Some time later, the Council of State announced the suspension for the second consecutive quarter of the so-called Accountability Assemblies of the delegates to his voters, an activity through which the Castro regime has tried for decades to illustrate its alleged model of ‘popular democracy’.”

“In other words, Cubans are mired in poverty, and the regime has closed the forums where they can channel their complaints, even though these have never really worked and have always been pure circus. But the leadership no longer even dares to put on its circus.”

“In this sense, the call for unity made by Raúl Castro on January 2, meant a strong alarm signal. At such a crucial moment, when what the people need is a message of hope, the nonagenarian dictator used his speech to instill fear in the already decimated partisan troops and in the military who no longer believe in the obligatory loyalty and obedience for which They once swore an oath to which they have been subjected for decades. Raúl Castro knows that this is the last bastion that apparently keeps them in power. It is what he has left before leaving this world, in his last-minute fight to avoid the collapse of the legacy that the revolution has kept alive with the historical generation.”

“Without a doubt, the country is not only experiencing a great multisystem crisis, it is also experiencing a great leadership crisis. In the ranks of the PCC and in the Armed Forces themselves there is a great feeling of discontent, and a high level of fatigue that manifests itself in apathy, harsh criticism of the system and the actions of the country’s leaders. This explains Raúl’s defeatist speech on January 2, calling for unity that no longer exists, and remembering that he will get out of the way of anyone who opposes the changes they order.”

“It is obvious that Counterintelligence has deeply penetrated the unrest that exists right now in the military and partisan ranks themselves . Hence, the sudden operation to reverse the package. A rebellion like the one on July 11, 2021 with the accompaniment of dissatisfied soldiers and militants of the party in rebellion would be the end of the dictatorship, and that reality is taking a toll on Saturn in these crucial moments.”

“GAESA collapses and the Russian bailout evaporates.”[3]

“The manifest insecurity at the top of power is related, among other factors, to two key factors: the lack of financial resources and the absence of a patron to keep it afloat at this stage of such political vulnerability. In this sense, the financial collapse of GAESA and the evaporation of the Russian bailout have suddenly triggered an increase in the level of vulnerability that the Cuban regime presents today. Certainly the largest it has had in more than six decades of communist dictatorship.”

“GAESA’s financial collapse is a key factor. In this sense, it should be noted that the death of General Luis Alberto Rodriguez López Callejas, CEO of GAESA, has generated a great disaster in the megaholding of the Cuban oligarchs. The verticality in decision-making and the management of the country’s finances and investments at its own convenience has turned out to be an indecipherable riddle for the substitutes that Raúl Castro has placed in his replacement strategy. Apparently no one gives a clue about how GAESA is managed.”

“At first glance, internally there is disorder, abandonment, undersupplied stores, and management personnel setting up their own MSMEs . A kind of mafia stampede is taking place, trying to create new small fiefdoms. The loss of suppliers, the company’s large debts with them, and the Government’s immobility in making decisions have generated an internal piñata that does not seem to be controlled. The level of control that existed in the company when López Calleja was there has disappeared. This is a very strong sign of internal collapse, of breaking the chain of command.”

“What happened recently at FINCIMEX on the eve of the package, with the issue of computer systems that control banking connections and the issuance of magnetic cards, is a good example of the breakdown of order within GAESA. As a result, the Western Union company has had to suspend remittance shipments to the Island until further notice and the issuance of cards for the sale of gasoline in dollars has stopped.”

“Obviously, something big is happening internally at GAESA . The last-minute problems that arose with their computer systems paralyzed the operations of stores, gas stations and remittance shipments. This unusual misfortune “coincided” with the abrupt abortion of the package, which has generated countless speculations. The truth is that a big sinkhole has suddenly occurred in GAESA and this further stirs up the uncertainty of what may happen in the coming days.”

“On the other hand, the announced Russian rescue has been much ado about nothing. Apparently the Russians do not trust the twisted Cuban legal system and have contained the investment drive that initially seemed to encompass several of the most important sectors of the Cuban economy. However, nothing is moving in the direction of investments.”

“Given the little movement seen so far, it is understandable that the Russian side is being very cautious when it comes to making decisions about million-dollar investments on the Island . The Russian side knows perfectly well that the Cuban regime is not a reliable partner in economic terms. On the other hand, it has realized the precariousness of the Cuban model and the primitive mentality when doing business on the part of the Cuban nomenclature. In that sense, the old and obsolete Cuban economic model does not fit with the Russian model. This disparity does not allow for faster progress in the negotiations. That is why everything remains speculation and promises that do not seem to be fulfilled. In reality, the true rapprochement has been on the military geopolitical level, in the game of the new Cold War unleashed by the Russian invasion of Ukraine, and proven in practice with the support that the Cuban regime has given to Russia by sending mercenaries. Cubans to war and making Cuban territory available to receive visits from Russian bombers and submarines carrying nuclear weapons.”

“Very little has happened, however, in the economic and commercial sphere. A company has been created in Mariel for the storage and distribution of merchandise, but so far nothing moves in that warehouse. Russian banks have been connected with Cuban banks to allow the use of Russian cards on the Island. The most significant thing has been the increase in the number of flights from Russia to Cuba, which has meant an increase in Russian tourism by 3%. compared to the previous year. There have been approaches to explore investments in the energy sector, but nothing concrete so far. Not even Russian oil reaches Cuba anymore . Outside of that, from a commercial point of view nothing significant has transpired.”

“The current situation in the country is extremely critical. Without a doubt, the current crisis far exceeds that of the Special Period, at the beginning of the 90s. This is a multi-systemic crisis for which the Government has not yet found a way out. The incompetence of the ruling leadership that holds power, added to the lack of existing leadership in the country, the state of bankruptcy in which finances find themselves, the deterioration of the main industries, the 75% decrease in the income of the economy compared to 15 years ago, have buried all hope in Cubans for a solution to this crisis. As a consequence, more than 80% of the Cuban population today lives in poverty.”

“At a time when GAESA, the oligarchic octopus that controls 95% of the finances and more than 70% of the main sectors of the country’s economy, is collapsing internally and the Russian financial bailout evaporates, everything indicates that the country It is heading towards total collapse. Faced with this reality, the Cuban people must understand that the sudden abortion of the package was a desperate action to avoid an imminent large-scale social outbreak, which would surely be joined by dissatisfied partisan militants and a large number of dissatisfied military personnel. Something very different from what happened on July 11, 2021.”

“The fear that the ruling leadership has of the people’s anger is evident . The nonagenarian dictator is very clear and knows that, given the current circumstances, the probability that the system will break down before his own death is real. That is why he has launched a plan B, removing ministers to try to clean up the face of the Government. However, the Cuban people no longer swallow this type of makeup as solutions to appease emergencies, which can only be overcome with a change in the system.”

“Meanwhile, the uncertainty of what may happen on the Island in the coming days increases to the extent that blackouts, shortages of fuel, food and medicine, as well as inflation, continue to increase.”

“Not one, but several black swans flutter over the sky of the dying revolution, at a time when the internal fissures within the ranks of power are increasing and putting the Palace oligarchs in maximum tension. The Cuban people and the living forces of society must be alert to events that may occur at any moment. When the river sounds it is because it brings stones.”

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[1] Emilio Morales, Biography, Linkedin.

[2] Morales, Why is the Cuban regime aborting the package with such urgency?, Diario de Cuba (Feb. 17, 2024).

[3] “Grupo de Administración Empresarial S.A. (GAESA) is a Cuban military-controlled umbrella enterprise with interests in the tourism, financial investment, import/export, and remittance sectors of Cuba’s economy. GAESA’s portfolio includes businesses incorporated in Panama to bypass CACR-related restrictions.” (U.S.Treasury Dept., Press Release: Treasury Identifies Cuban State-Owned Businesses for Sanctions Evasion (Dec. 21, 2020).)

Cuba Dismisses Ministers of Economy and Food Industry

On February 2, the “Cuban government suddenly fired its ministers of economy [Alejandro Gil] and food industry [Manuel Santiago Sobino Martinez]. . ., after days of angry public response to an austerity plan rolled out last month that, among other things, planned to hike the price of gas five-fold in the midst of the island’s most severe economic crisis in decades.”[1]

This development was announced in Granma, the Cuban Communist Party newspaper, with an unusual final sentence saying that the ”colleagues released from their respective positions were recognized for their effort and dedication in carrying out such high responsibilities, and in the coming days they will be assigned new missions.” The author of the Miami Herald article about this development thought that the last part of this sentence “suggest[s] the officials are not likely to land in similar high-profile jobs.”

The Granma article also stated that these actions were “at the proposal of the President of the Republic and prior approval of the Political Bureau of the Central Committee of the PCC.”

These “dismissals happened just a day after the government had to postpone a controversial gas price hike that was deeply unpopular, which was part of a larger austerity plan that Cuban officials said was aimed at “correcting distortions” and stabilizing the economy.

The Granma article also announced the two men’s replacements: (a) Joaquín Alonso Vázquez, current minister-president of the Central Bank of Cuba, as Minister of Economy and Planning and (b) Alberto López Díaz, 56 years old, current governor of the province of Villa Clara and deputy to the National Assembly of People’s Power, as Minister of the Food Industry.

An article about this development in Diario de Cuba reported the following reactions to these decisions:[2] Alicia Garcia said, “”Excellent news, I have been waiting for it for a while. It was time for the Ministry of Economy to be headed by an economist and not an engineer in transportation exploitation.” Antonio Rojas added: “The most serious thing that the country faces is the economic issue due to the political consequences that derive from it. Will the nation have the possibility of compensating itself in an understandable and credible way? We, the people, think that a lot of time has been lost.”

More extensive comments were added by Cuban economist Mauricio de Miranda Parrondo, who said the following:

“These types of events occur in any country, especially when things do not work well. However, if we go by this, the list of changes could be longer. For now I will only say one thing: the problem is not the ministers ‘The problem is the system.’
“The problem is that we continue to appeal to a failed model. The problem is that entrepreneurship continues to be restricted, which is only allowed following rules that respond to a high level of discretion. The problem is that we need to support agricultural producers and those who venture into the industry, with development credits,”
“The problem is that there is neither an agricultural policy, nor an industrial policy, nor an international insertion policy that produces structural changes that allow us to overcome the paralysis. Talking about development right now is almost a matter of science fiction.”
“The problem is that the State is gigantic and ineffective. And also, authoritarian and despotic. The problem is that the policy of ‘cadres’ (to use that language that is so foreign to me) has been based on fundamentally promoting those who follow orders and follow the pre-established script, and not those who think for themselves and question.”
“The problem is that the State is gigantic and ineffective. And also, authoritarian and despotic. The problem is that the policy of ‘cadres’ (to use that language that is so foreign to me) has been based on fundamentally promoting those who follow orders and follow the pre-established script, and not those who think for themselves and question.”
“What is going to happen when the economy does not grow sufficiently? What is going to happen when the already very deteriorated standard of living of the population is not recovered? What is going to happen when macroeconomic stabilization is not achieved, which will not be achieved with the announced measures?What will happen when the ordinary Cuban’s table continues to be a table of hunger? What will happen when going to work continues to be an odyssey because there is no transportation?”
“What will happen when the electricity cuts continue? What will happen when it is not possible to reverse the reality that the income from work of the vast majority of Cubans continues without guaranteeing decent living conditions? What is going to happen when we cannot overcome the boredom of so many people whose lives are diluted in sacrifice after sacrifice without seeing results?What is going to happen to our elderly? Once again, nothing? Rectify mistakes? Once again?”
“I repeat, the problem is the system. It never worked well, but it is already exhausted, and not doing everything necessary to change it in a democratic way and with the active participation of the people will only bring more misery for Cubans, greater misfortune, greater emigration, greater desolation for our elderly, more and more unprotected every day. And it could lead to even more serious consequences. This is not only an economic problem, it is an essentially political problem.”

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[1] Torres, Cuba fires its ministers of economy and food industry amid prolonged economic crisis, Miami Herald (Feb. 2, 2024); Council of State approved cadre movements, Granma (Feb. 2, 2024).

[2] Cuban economists react to the dismissal of Alejandro Gil: ‘The Problem is the system,’ Diario de Cuba (Feb. 3, 2024). l

Cuba’s Current Economic and Political Crises

Introduction[1]

At least by early December 2023, it was evident that Cuba was experiencing a horrible economic crisis. One commentator put it this way: “Cuba is going through the worst crisis it has experienced in decades, with widespread shortages of food and medicines, rolling blackouts and a sky-high 400% annual inflation rate. The calls on the communist leadership to open up the economy to the market are getting loud, even from close political allies.”

t also was a Cuban political crisis on how to respond to this economic crisis. As John Kavulich, the president of the U.S.-Cuba Trade and Economic Council based in New York City, said in early December, Cuban “bureaucrats have become more reluctant to take risks since there is uncertainty about who is really in charge.” They are “either frightened or untrusting, and certainly not risk-takers.”

The most vivid criticism of this situation came from Roberto Alvarez-Quinones, a Cuban journalist, economist and historian who after working in Cuba for Granma and Cuban television stations has been doing that work in Los Angeles, California. He said, “Never in the history of the entire West has there been such an overwhelming economic and social crisis that it has affected practically 99% of the total population of a country, without having been caused by a natural catastrophe or a war, but by the Government of the nation.”

Cuban Government’s Response[2]

At a December 20-22, 2023, meeting of Cuba’s National Assembly, the Minister of the economy and planning, Alejandro Gil Fernandez, reported that for 2023 Cuba’s GDP fell almost 2%; exports were $770 million below predictions; food production was less than that for 2022; tourism, although more than the prior year, had a yield only 69% of the 2019 figures; overall production was down; there were shortages of supplies and fuels; and health care and education sectors where harmed by loss of workers to emigration.

Fernandez attributed Cuba’s inflation to international price hikes, the government’s release of money to finance its budget deficit, fewer goods being produced, the agricultural sector being burdened by labor shortages, high costs and low yields and Cuba being forced to import over 70% of the food that [was] being consumed.

Prime Minister Manuel Marrero Cruz said the government’s lack of control over production and distribution “adversely affects production by state entities and lets currency exchanges on the illegal market determine the pricing of products from the non-state sector.”

President Diaz-Canel, of course, criticized the U.S. embargo (blockade), but admitted that the Cuban government had made some errors in the “design and implementation of currency unification,” “approving new economic actors without performance norms having been established” and “the complexity of making decisions in a context of extreme tension [and of] commitment to preserving social conquests.”

All of these “difficult realities” were summarized by W.T. Whitney, Jr. (an U.S. political journalist focusing on Latin America) as “the adverse effects of diminished tourism, inflation, and emigration; social inequalities based on varying access to resources; production stymied by shortages of resources; inadequate food production; lack of buying-power for most Cubans, and for importing necessary goods; and the near impossibility of securing foreign investment.”

To meet these problems, Whitney said, Cuba was preparing these responses: “further decentralization of political and economic administration; cutbacks on the expenditure of central government funds; reduced subsidies for the purchase of water, fuel, transport, and electricity by business entities; adjustment of import tariffs to favor the availability of resources for production; capturing more tourist dollars; protecting state-operated production entities; fixing prices; and producing more food.”

Moreover, Whitney said, the U.S. needs to cancel its embargo (blockade) of Cuba and remove Cuba from the U.S. list of countries that are sponsors of international terrorism.

Criticism of Cuban Government Responses[3]

Javier Perex Capdevila, Doctor of Economic Sciences and Professor at the University of Guantanamo, said the Government measures are based on cutting subsidies, but “there are no measures to get out of economic stagnation and . . . to reduce inflation, accompanied by a fiscal deficit that entails generating more liquid money which does not stimulate the economy, but rather inflation. The measures that have been announced in a confusing and ambiguous manner are supposed to achieve macroeconomic stabilization, but that is not a real solution . . and there is no guarantee that they will work.”

In addition. Capdevila noted that increases in long-distance transportation rates will adversely affect many people who have to use such transportation to reach competent medical personnel. He said, “You cannot save a country if you do not save the people.”

Pedro Monreal, a Cuban economist, criticized the purported justification for increasing black market prices for currencies by saying the government had not designed that market. Monreal said this was “a fig leaf to cover up the poor design of the ‘organization that made this informal market necessary.’” The Cuban State did something worse in 2020 when “it designed a defective official exchange market with an overvalued [peso].” Monreal also “predicted more inflation” this year with a government deficit of 18.5% of gross domestic product.

Cuban economist Emilio Morales commented on the continued emigration of Cubans in 2023 while there was a 3.3% decrease in remittances to those on the island due to the need for those now in other countries to pay for their outbound transportation and expenses of living in other countries on their “march for family freedom.” Morales concluded that this result shows “the systemic crisis demands radical reforms and the entrenchment of the mafia regime in its totalitarian model blocks any possibility of survival. History teaches that bayonets cannot sustain a regime for long, indefinitely without fundamental reforms.”

The most recent news about Cuba’s laws affecting private enterprises was the January 16^thannouncement of new income tax regulations. Now “private sector employees will have to pay a 20% income tax on earnings above 30,000 Cuban pesos, about $109 per month. That’s a 15% tax rate increase from the previous scale set up in 2021, which imposed a 5% income tax for earnings over 9,510 Cuban pesos. Business owners must automatically deduct the tax payments monthly, the decree says.”

This recent announcement is in addition to the tax burden on Cuban private businesses: 35% tax on profits, a 10% tax on sales or services provided, a 5% payroll tax, a one percent revenue tax to support local governments and contributions to social security equal to 14% of workers’ salaries. Owners of the [private businesses] also have to pay up to 20% taxes on dividends.

Such private businesses “cannot hire more than 100 employees, they cannot be involved in economic activities handled by the state, such as telecommunications, and must import products and supplies through state companies working as intermediaries. According to the new regulations published this week, they can also be hit with price controls at any time ‘when circumstances advise it to achieve more favorable prices for the population.’”

At about the same time as this announcement of new taxes on private enterprises, the Cuban government announced a new “’ethics code’ for government officials and members of the Communist Party and similar organizations that mandate them to ‘be faithful to socialism,’ fight against the ‘genocidal’ U.S. embargo and ‘be loyal to the Cuban Communist Party, the Revolution… and to the Revolution´s Commander in Chief, Fidel Castro.”

Conclusion[4]

This blog consistently has advocated for U.S. repeal of the embargo (blockade) of Cuba and the U.S. designation of Cuba as a state sponsor of terrorism. However, all of the blame for Cuba’s current crises cannot be attributed to these U.S. measures. Indeed, the U.S. now is the sixth largest exporter to Cuba.

Moreover, now the U.S. is preoccupied with the Israel-Hamas and the Russia-Ukraine wars, problems with Iran, North Korea, China, Yemen and the Red Sea and the problems created by large number of immigrants at our southwestern border. As a result, the U.S. does not have the time and resources to devote to Cuba’s problems and U.S. policies regarding same.

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[1] Analysis of Cuba’s Current Economic Crisis, dwkcommentaries.com (Dec. 5, 2023); Almost All Cubans Suffer Worst Economic Crisis in the History of the Western Hemisphere, dwkcommentaries.com (Dec. 11, 2023);

[2] Whitney, A revolution in trouble: Cuba’s government, People’s World (Jan 8, 2024).

[3] ‘You can’t save a country if you don’t save the people.’ a Cuban economics doctor explodes in response to the package, Diario de Cuba (Jan. 13, 2024); Another rise in the price of the dollar and the euro on the Cuban black market, Diario de Cuba (Jan. 15, 2024); Emigration grows, but remittances to Cuba sink, Diario de Cuba (Jan. 16, 2024);Through resolutions, the Castro regime intends to stop the astronomical fiscal deficit that it approved, Diario de Cuba (Jan. 17, 2024); Reyes, The economic package opens a political crisis in the Government of Cuba, Diario de Cuba (Jan. 17, 2024); Torres, As the economy craters, the Cuban government hits private-sector workers with tax hike, Miami Herald (Jan. 18, 2024).

[4] E.g., posts listed in sections “Cuba: State Sponsor of Terrorism?” and “U.S. Embargo of Cuba” in List of Posts to dwkcommentaries—Topical: CUBA [as of 5/4/20]; Cuba Still on U.S. List of State Sponsors of Terrorism, dwkcommentaries.com (Dec. 2, 2023);U.S. Senators and Representatives Demand Ending of U.S. Designation of Cuba as State Sponsor of Terrorism, dwkcommentaries.com (Jan. 12, 2024); COMMENT: Another Congressman Calls for Ending Cuba as a State Sponsor of Terrorism, dwkcommentaries.com (Jan.13, 2024); U.S. Increasing Exports to Cuba, dwkcommentaries.com (Jan. 12, 2024).

Almost All Cubans Suffer Worst Economic Crisis in the History of the Western Hemisphere

This indictment is handed out by Roberto Alvarez-Quinones, a Cuban journalist, economist and historian who after working in Cuba for Granma and Cuban television stations has been doing that work since 1996 in Los Angeles, California.[1]

Summary of His Indictment

“Never in the history of the entire West has there been such an overwhelming economic and social crisis that it has affected practically 99% of the total population of a country, without having been caused by a natural catastrophe or a war, but by the Government of the nation.”

“That record is held by Castroism . The current Cuban crisis is unprecedented, deplorably exceptional. It strikes today and with no possible solution in sight, because the dictator Raúl “El Cruel” refuses to dismantle the political-economic-social system that has caused the collapse of the economy and of Cuba in general.”

One example of the current collapse is Cuban sugar production. “Today, without a global crisis, and with the international price of sugar higher than ever on average (26 cents per pound at the end of November, Cuba produces 390,000 tons of sugar and imports . . . [more] to cover national consumption.”

The reason, Quinones says, is that “there is no free market, which creates wealth, distributes it and regulates the market. . . . Communist -Castro totalitarianism prevents the existence of the natural spectrum of seven social categories that exist in normal (capitalist) countries: very rich, rich, upper middle class, lower middle class, poor, very poor and the totally helpless. This diverse social range is reduced in Cuba to first, second, and third class citizens.”

“At the top of that social pyramid is embedded a tiny, very rich and privileged patriciate, screwed in power, or attached to it by family, “historical” ties, very high bureaucracy, or by lucrative mafia commitments. My estimate is that this elite of communist first-class citizens may belong between 0.02% and 0.03% of the total population. We are talking about between 2,140 and 3,210 people more or less, in a total population of 10.7 million inhabitants. . . . That Castro patriciate is practically immune to the crisis, although not completely. Only the dictator, the most conspicuous historical figures such as Ramiro Valdés, Machado Ventura, Guillermo García, Alvaro López Miera and his families have absolute immunity, and a few more privileged high-ranking officials and civilians. They make up the crème de la crème of the regime.”

“Then come those who the communist claque considers second class citizens, despite the fact that they enjoy some advantages, these not of political, historical or caste origin, but because they have a lot of money, or receive remittances and packages from their relatives abroad. They are rich peasants, business owners, MSMEs plugged into the dictatorship, and the 28% of ‘dollarized’ Cubans who can buy in shopping malls. The rich in this case are ‘virtual,’ holograms. They accumulate money that they have no way to spend or invest. The State does not produce anything to offer them, and it matters less and less. And the sale of land and rental of real estate, or entire beaches, is only for foreign capitalists.”

“We then reach the most oppressed or third class citizens. Poor, extremely poor, and helpless. The vast majority are very poor since they receive a daily income of less than $2.15 a day, the minimum established by the World Bank to identify extreme poverty.”

“Battered by one of the highest inflation rates in the world and a staggering devaluation of the peso, today the average salary in Cuba, of about 5,000 pesos (40.65 dollars), barely covers 29.4% of the family basket, almost 17,000 pesos (138 dollars).”

“And the Cuban minimum wage is 17.64 dollars per month (2,170 pesos), almost eight times lower than the cost of the basic basket.”

“[T]he pensions of the 1.7 million retirees are 1,901 pesos per month on average, nine times less than what the basic basket costs. How do the elderly manage to eat and satisfy their minimum needs? The Government doesn’t give a damn about that. It is already known that if they die of hunger they attribute the death to other causes.”

“The [Cuban] Minister of Agriculture, Ydael Pérez, admitted that the production of pork, rice and beans (basic foods in Cuba) fell by more than 80% this year compared to 2019. Only “40% of the fuel has been imported” . . . [and] 4% of fertilizers and 20% of animal feed. Chicken imports from the US fell 40% in September, compared to August. The debacle of national production aggravates everything. Already on the black market, a carton of 30 eggs costs 3,000 pesos, 38% more than a full minimum wage.”

In short, Cuba is suffering a “suffocating crisis consciously caused to more than 99% of the inhabitants. Something never seen in the Western world.”

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[1] Quinones, 99% of the population of Cuba suffers the worst economic crisis ever in America, Diario de Cuba (Dec. 9, 2023); Roberto Alvarez-Quinones, Hispanic L.A.

Wall Street Journal Praises Cuba’s Small Businesses

On October 4, a Wall Street Journal article praised Cuba’s small businesses.[1] Here are the highlights of that article.

“Newly licensed private businesses are becoming a lifeline for Cuba, bringing in about half of the country’s total food imports as the cash-strapped Communist government struggles to keep power plants running and provide public transport because of acute fuel shortages.”

‘Havana passed laws allowing Cubans to form small businesses that can employ up to 100 people in the wake of countrywide protests that shook the impoverished island two years ago. Since then, more than 8,000 small and midsize businesses have registered with the government. They are involved in activities that range from tourism and construction to computer programming.”

“’In the last two years, the private sector has been dominating commerce in Cuba to an unprecedented level,’ Aldo Álvarez, a Cuban lawyer turned importer based in Havana, said in a telephone interview. ‘We not only have businesses, but we have the capacity to import.’”

“Cuba’s embassy to the U.S. referred to comments in a recent radio interview with Deputy Foreign Minister Carlos Fernández de Cossío, who said Havana’s decision to allow small businesses was a sovereign decision but that Cuba wouldn’t allow big concentrations of property, wealth and capital to develop, ‘at least for the moment.’ He told Miami public radio station WLRN last week that economic liberalization won’t lead to a political challenge of Cuba’s single-party rule.”

“More than 400,000 Cubans have left the island for the U.S. over the past two years, according to data by U.S. Customs and Border Protection. The emigration wave has been fueled by political repression and severe electricity, fuel and food shortages, migrants say, in the worst economic crisis since the dissolution of the Soviet Union, Cuba’s main ally and trade partner, in the 1990s. Tourism, the island’s main moneymaker, collapsed as a result of the Covid-19 pandemic and has yet to fully recover.”

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[1] (Acosta & Cordoba, Small Businesses Become a Lifeline for Cuba’s Floundering Economy, W.S.J. (Oct. 4, 2023).

More Details on Cubans Fighting for Russia in Ukraine

CNN and Time Magazine have provided more details on Cubans fighting for Russia in Ukraine.

CNN’s Report[1]

Family members in Cuba have told CNN, “For months, hundreds of Cubans have quietly left the island to fight for Russia in its war in Ukraine, chasing promises of money and Russian citizenship from shadowy online recruiters.”

These Cubans in the war left the island because of the absolutely desperate economic conditions on the island and the promise of good-paying construction jobs in Russia. Once in Russia, however, they were sent to fight in Ukraine as shields for the Russian troops.

Time Magazine’s Report[2]

A 19-year-old Cuban, Alex Vegas Diaz, said he had accepted an offer on WhatsApp to make good money doing “construction work” for the Russian military. But when he arrived in Russia, he and a Cuban friend were taken to a Russian military base, outfitted with weapons and sent against their will to the front lines of the Ukraine war. Soon, however, he became ill and was sent to a Russian hospital. On an August 31^st video, he said, ““What is happening in Ukraine is ugly—to see people with their heads open before you, to see how people are killed, feel the bombs falling next to you. Please, please help get us out of here.”

This report went viral, prompting other Cubans on the island to seek information about their family members who had gone to Russia, and Time determined that Vegas Diaz and the others had been “caught up in a large, organized operation that has openly recruited hundreds of Cuban volunteers to fight in Moscow’s increasingly depleted army since July. They also suggest that the trafficking allegations may be an attempt by the Cuban government, a longtime ally of Russia, to maintain its stated neutrality on the war in Ukraine, four Cuba experts and former U.S. officials tell TIME.”

This past June posts began to appear on Cuban Facebook groups advertising a “contract with the Ministry of Defense for military service in the Russian army. Recruits were offered a monthly salary of 204,00 rubles, or $2,086 U.S. dollars—an almost unimaginable sum in Cuba, where the average salary is less than $50 per month. On Sept. 5, a Ukrainian hacker group posted what appeared to be a version of the six-page contract that recruits signed once they arrived in Russia, translated into flawless Spanish. It required a one-year commitment and came with benefits that included a one-time enlistment fee of 195,000 rubles (roughly $2,000) and 2 million rubles (roughly $21,000) for their families if they are killed. The contract also asks recruits to fill out a questionnaire about why they are enlisting and how they feel about military service. The terms of the contract match those publicly promoted by the Russian Defense Ministry, including the possibility of Russian citizenship for the recruit and their families per a decree signed by President Vladimir Putin last year.”

According to Time, “It is unclear how many conscripts the recruiting push yielded. The hacked emails reviewed by TIME only document the nearly 200 recruits who passed through the military office in the Russian city of Tula in July and August. Cuban human-rights groups’ estimates range from around 750 recruits to more than 1,000. The Miami-based Foundation for Human Rights in Cuba (FHRC) told TIME that of the 746 recruits they have tracked, at least 62 appear to be part of a highly-trained Cuban special forces outfit known as the Avispas Negras, or Black Wasps. TIME reviewed 199 passports of Cubans, aged 18 to 69, who appear to have enlisted with the Russian army since mid-July, and matched more than 20 to social-media profiles that corroborated their names, faces, and hometowns.”

“Perhaps the clearest indication that the vast majority of these recruits went to Russia willingly, and did not act as though they were engaging in an illegal scheme, comes through their own social-media posts. On Facebook, Instagram and TikTok, many of these recruits posted photos with Russian tanks, smiled with other Cubans in their new Russian military uniforms, and boasted about sending money back home. In Facebook comments, family members openly discussed brothers, husbands, and cousins who were ‘in Russia’ and ‘in the war.’”

“The discovery of the recruiting effort has complicated the delicate line Havana has tried to walk since Russia’s invasion of Ukraine. Cuba has been crippled by a 60-year U.S. embargo, island-wide blackouts, and a hunger crisis. It relies on Russia for food, oil, and economic investment, and recently signed a series of bilateral deals in which Moscow pledged relief for food and oil shortages and investment in the island’s struggling sugar and steel industries in exchange for land leases. At the same time, Cuba can’t afford to further jeopardize its relations with Western nations who have sought to isolate Russia as punishment for its war in Ukraine. The European Union is Cuba’s second-biggest trading partner and largest foreign investor. Ukraine, which has made it clear it believes Havana is involved in the recruiting scheme, has publicly pushed for Western nations to retaliate by “severing diplomatic relations with Cuba.”

Although the Cuban government has tried to deny Russian recruitment of Cuban for the Ukraine war, “dozens of the passports reviewed by TIME had been issued very recently, making it unlikely, experts say, that the Communist government, which keeps close tabs on its citizens, would not have detected the sudden exodus. Cuba analysts reject the possibility that Havana was unaware of the recruiting push. Several recruits told family members who spoke to TIME, as well as human rights groups, that Cuban officials intentionally did not stamp their passports before they exited the country to board their flight to Moscow, in an apparent attempt to maintain deniability.”

According to Chris Simmons, a Cuban spycraft expert and former counterintelligence officer with the U.S. Defense Intelligence Agency, “The idea that the [Cuban] government was not involved is ludicrous. Nothing happens without their involvement.” This view is “widely shared by Cuba experts who spoke to TIME. By pledging to prosecute any ‘illegal’ recruiting, the Cuban government gets the best of both worlds: ‘It supports its ally,’ Simmons says, ‘and because the passports aren’t stamped, there’s no liability of a body count, because there’s no proof they ever left.’”

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[1] Oppmann, Why Cubans are fighting for Russia in Ukraine, CNN.com (Sept. 19, 2023).

[2] Bergengruen, How Russia Is Recruiting Cubans to Fight in Ukraine, Time (Sept. 18, 2023) (even more details are provided in the Time article).

U.S. Needs To Improve Relations with Cuba

Cuba recently has been the subject of many related news reports. First, the island is suffering from many economic problems, including many younger Cubans abandoning the island for life elsewhere. Second, many private enterprises on the island are being successful. Third, this year Russia and China have been increasing their connections with Cuba to support that country and oppose U.S. actions against the island. Fourth, the above developments pose challenges to the U.S., which needs to return to its positive relationships with Cuba that were started in the Obama Administration.

Cuba’s Recent Economic Problems[1]

“With sanctions tightened by the Trump Administration (and not repealed by the Biden Administration), Cuban economic mismanagement and the impact of the pandemic and other events, Cuban inflation has soared, basic foods and medicines have become scarce, and money transfers from Cubans in the U.S. have dwindled. The flow of foreign tourists has also dried up.”

In July 2021, this “economic crisis sparked a wave of protests across the island, which prompted a harsh response from security forces. In the following months the government brought charges against 930 protesters and sentenced 675 of them to prison terms, some as long as 25 years, according to Laritza Diversent, director of human-rights group Cubalex.”

In August 2022 a “fire destroyed 40% of the fuel storage capacity at the port city of Matanzas, leading to increased electricity outages that even before the disaster were lasting up to 20 hours a day in many places.”

Cuba’s economic difficulties also were exacerbated by the Trump Administration’s 2019 imposition of the harshest economic sanctions against Cuba in more than a half-century. It ended virtually all non-family travel to Cuba and placed new limits on the money Cuba-Americans could send to family on the island. This Administration also began implementing an old law aimed at blocking both U.S. and foreign investment on the island that had been on hold because of immense opposition from U.S. allies. This move unleashed a law allowing Cuban Americans to sue in U.S. courts any company that benefits from their property on the island that had been confiscated by Fidel Castro’s regime. More significantly, the Trump Administration re-designated Cuba as a state-sponsor of terrorism.[2]

In response to these problems, as of August 2022, “More than 175,000 Cuban migrants were apprehended in the U.S. between last October and July, six times as many as in the previous 12-month period, according to U.S. Customs and Border Protection. Most are young, single adults, according to government statistics. Many are relatively well educated, say people who work with the migrants.” This “exodus reflects the desperation, the lack of hope, and the lack of future people on the island feel,” said Jorge Duany, head of the Cuban Research Institute at Florida International University.”

Recent Expansion of Cuban Private Enterprises on the Island[3]

According to Miami Herald, “over the past two years . . . [p]rivate businesses, banished from the island by Fidel Castro more than 60 years ago, are making a strong comeback, employing more people than state enterprises, gaining trust from foreign creditors and helping put food on Cubans’ tables at a time of widespread scarcity.” Recently Cuba’s economy minister, Alejandro Gil, in a speech at the National Assembly reported that “the private sector is on track to buy over a billion dollars in goods by the end of [this] year—outpacing the government as the country’s largest importer.”

“[P]rivate grocery stores are taking the place of the empty-shelf government supermarkets, and all sorts of [private] businesses are filling the space once monopolized by the state. Some restaurant owners are now opening chains or franchises. Others are entering partnerships with cash-strapped local enterprises owned by the state and paying in foreign currency for the supplies needed for their production lines.”

“Cuban [government] leaders have long resisted [such a development] because it aims at the heart of the state-controlled Marxist economy.” But “[t]they’ve had no choice but to allow it amid the most severe economic crisis.” As a result, Cuba is looking “less like the highly centralized socialist economy . . . and more like a country in transition, where a nascent business community coexists with inefficient state companies.”

According to Ricardo Herrero, executive director of the Cuba Study Group, a Cuban-American organization that helps train entrepreneurs on the island, who “share similar value sets with entrepreneurs here in the United States.” They “want the government off their backs and want to see better relations between the United States and Cuba, particularly between Cuba and the diaspora.” Moreover, “some Cubans living in Miami are even owners or partners in some of these private companies.”

The Cuban “private sector now employs around 35% of Cuba’s work force, about 1.6 million workers, surpassing the 1.3 million employed by state enterprises, according to Cuban economist Juan Triana, a professor at the Center for the Study of the Cuban Economy at the University of Havana.

These non-state actors through the end of this April were responsible for $270 million of Cuba’s imports or 61% of its total imports according to Pedro Monreal, a Cuban economist who works for the U.N. Educational, Scientific and Cultural Organization.

On August 2, 2023, however, Cuba’s Central Bank announced new regulations that will require small private businesses to offer their customers ways to make digital payments and promptly to deposit all cash revenue in their bank accounts while banning cash withdrawals to pay operating expenses. This also will ban private enterprises from using their Cuban pesos to buy U.S. dollars in the informal market to pay for goods purchased abroad while the government is unable to provide food and essential goods for the people. As a result, these regulations are another government attempt to regulate the private sector and are expected to cause immense practical difficulties in the state-owned banks and system to implement the regulations and regulate increases in retail prices on the island.

Russian and Chinese Recent Assistance to Cuba[4]

Starting in February 2023, “high-level Russian officials began a steady stream of public visits to Cuba. Barely a month went by without a high-profile Russia-Cuba visit.” And high-level Cuban officials also were visiting Russia. Here is at least a partial list of those visits this year:

“In March, Nikolai Patrushev, secretary of the Russian Security Council and Igor Sechin, the powerful director of the Russian state oil company, Rosneft, met with leaders in Havana.”
“In April, Russian foreign minister, Sergey Lavrov, visited the island as part of a regional tour that included two other American adversaries — Venezuela and Nicaragua.”
“In June, Cuban Prime Minister Manuel Marrero Cruz visited Russia for more than ten days, including a meeting with Putin.
More recently, “Alvaro Lopéz Miera, the Cuban defense minister, traveled to Moscow . . . for discussions with his Russian counterparts — including Sergei Shoigu, one of the notorious architects of the war in Ukraine.” And Shoigu announced that “Cuba has been and remains Russia’s most important ally in the [Caribbean] region.” Shoigu promised that Moscow was “ready to render assistance to the island of freedom and to lend a shoulder to our Cuban friends.”
Similar comments came from “Cuban Deputy Foreign Minister Gerardo Peñalver, [who] described the two countries as ‘strategic allies’ cooperating against ‘unilateral coercive measures’ from Washington.”

These contacts have resulted in a memo of understanding whereby Russia will invest in Cuba’s agricultural lands to produce goods for the Russian market, Russia will increase its commercial flights to Cuba’s eight airports, will modernize Cuba’s major industries and reduce tariffs and costs for Russian exports to the island and will construct an all-Russian hotel, shopping mall and banking facilities in Cuba.

In addition, “Russia pledged to give oil and various industrial supplies to Cuba. By one estimate, Moscow has already sent the island more than $160 million worth of oil this year. And Russian news agencies announced that additional supplies will follow.”

“Cuba now receives direct flights from Russia (flights had been suspended after the invasion of Ukraine), and it has joined the ’Mir’ payment system that Moscow created to facilitate the conversion of rubles to pesos and other currencies for tourism, trade and aid. Over 1,000 Russian oil executives and staff are expected to the visit Cuba by year’s end.”

In early July, “the Russian naval ship, Perekop, diverted to Cuba from the country’s Baltic Sea fleet more than 7,000 miles away. The ship carried approximately 100 Russian naval cadets, humanitarian assistance and various equipment to Cuba. The Russian ambassador and the deputy commander of the Russian Navy attended the ship’s elaborate arrival ceremony, symbolizing that this was the beginning of deeper collaboration.”

China, on the other hand, is Cuba’s largest trading partner, and plays a role in the island’s agricultural, pharmaceutical, telecommunications and infrastructural industries. Beijing also owns a significant measure of Havana’s foreign debt.

In early June 2023, there were reports that China was planning to build an electronic listening station in Cuba in exchange for paying Cuba billions of U.S. dollars and that U.S. officials were concerned that such a station could be capable of spying on the United States by intercepting electronic signals from nearby U.S. military and commercial facilities and could amplify Beijing’s technological capacity to monitor sensitive operations across the Southeastern U.S., including several military bases. This Chinese base is part of what the US intelligence community identifies as a wider Chinese effort to intercept American communications, steal secrets and prepare for increased competition.” However, on June 10^th an anonymous Biden official said that before 2019, the U.S. knew there was an operating Chinese spy base or facilities in Cuba that could intercept electronic signals from nearby U.S. military and commercial buildings.

In any event, Evan Ellis, a Latin America analyst at the U.S. Army War College, saw such an electronics facility as “a sign of the island’s financial desperation. China gives money to Cuba it desperately needs, and China gets access to the listening facility.” However, Michael Bustamante, a Cuba expert at the University of Miami, said aside from Cuba’s financial dire straits, the deal with China may reflect that the Cuban government feels it has little to lose given how poor its relationship is with the U.S.

Moreover, according to the Wall Street Journal, in later June 2023, Cuba and China were negotiating to establish a new joint military training facility on the north coast of the island that would be “part of China’s ‘Project 141,’ an initiative by the People’s Liberation Army to expand its global military base and logistical support network. It also is a sign that China now sees its struggle with the U.S. as global and that it must operate around the world to fend off Washington and protect Chinese interests.

U.S. and Cuban Exchanges About Chinese and Russian Connections with Cuba[5]

On June 20, 2023, U.S. Secretary of State Antony Blinken said that the U.S. would “have deep concerns” about Chinese military activity on Cuba, and that he made this message clear on his recent visit to Beijing.

The next day at the June 21 State Department Press Briefing, , the Department’s Principal Deputy Spokesperson, Vidant Patel, said, “The Secretary raised the serious concerns the U.S. would have about any intelligence or military facility in Cuba, saying that we will continue to defend our interests here.” Then in response to a reporter’s question, Patel added, “[W]e we are monitoring and responding to any PRC attempts to expand its military or security presence around the world, and we watch how potential PRC actions may impact the United States. Our experts assess that our diplomatic efforts have slowed the PRC down, and there of course continue to still be challenges, but we continue to be concerned about the PRC’s longstanding activities with Cuba. The PRC will keep trying to enhance its presence in Cuba and we will keep working to disrupt it.”

These U.S. assertions were strongly denounced by Cuba’s Minister of Foreign Affairs, Bruno Rodriguez Parrilla, in the following statement:

“The assertions made by the US Secretary of State about the presence of a Chinese spy base in Cuba are false, totally false. Cuba’s standing on this subject is clear and unequivocal.”
“These are unfounded allegations.”
“The [U.S.] aim is to use them as a pretext to maintain the economic blockade against Cuba and the measures of maximum pressure that have strengthened it in recent years, and which have been increasingly rejected by the international community, as well as inside the United States. The rejection includes the demand to remove Cuba from the arbitrary list of States Sponsors of Terrorism.”
“Cuba is not a threat to the United States or any other country. The United States implements a policy that threatens and punishes the entire Cuban population on a daily basis.”
“The US has imposed and owns tens of military bases in our region and also maintains, against the will of the Cuban people, a military base in the territory that it illegally occupies in the province of Guantánamo.”
“We are witnessing a new disinformation operation, similar to the many others in the United States throughout its long history of hostility against our country.”

On August 2, Granma, the official organ of Cuba’s Communist Party’s Central Committee, reiterated Cuba’s denunciation of the U.S. embargo (blockade) of Cuba, with the following words:

“The Ministry of Communications (MICOM) is the target of the brutal blockade of the United States against Cuba, according to confirmation of damages that only in the period August 2021-February 2022 caused economic damages and losses that exceeded 104 million dollars.”
“This was denounced by the first deputy minister of the sector, Wilfredo González Vidal, who specified to the Cuban News Agency (ACN) that the cruel economic, commercial and financial monstrosity reduces the dynamism and speed of the digital transformation process of our country.”
“The set of actions developed by the United States, he said, ‘continues to be the main impediment to a better flow of information and broader access to the Internet and Information and Communication Technologies (ICT) for our people.’”
“However, in Cuba the expansion of access to the network of networks and knowledge continues, and today it has 7.8 million mobile phone users and of them almost seven million access the Internet through this important channel, he noted.”
“This, he asserted, is due to the effort and will of the State to advance in the information society, creating a responsible culture on the use of new technologies in favor of the economy and society.”
“The official pointed out that the economic damages and losses caused to the Communications System, as a consequence of the blockade, are evident throughout the sector, that is, in Telecommunications, Information Technologies and Postal Services.”
“Likewise, according to the ACN, it described as significant the effects due to the limitations of supplies of technologies and equipment produced under license, or using North American components, which forces it to go to other markets, much further away, an obstacle for which the greatest effects are quantified to sector.”

In July 2023 the U.S. went beyond words by sending “a nuclear-powered submarine, the USS Pasadena, to the American-held base at Guantanamo Bay. Officially a ‘logistics stop,’ this was a warning and a show of strength. The Cuban Ministry of Foreign Affairs condemned the submarine visit as a ‘provocative escalation.’ The US Navy said the move was ‘not without precedent.’”

U.S. Should Return to Positive Engagement with Cuba[6]

Only a few years ago, the government of Cuba was pursuing closer ties to Washington. According to William LeoGrande, a Latin America expert at American University, “Every major component of Cuba’s economic strategy in the last two decades had been premised on long-term expectations that the relationship with the U.S. would improve.”

In December 2014, this Cuban effort paid off when the two countries presidents (Barack Obama and Raul Castro) announced that their countries would be pursing efforts to improve relations, and that effort produced positive results for the rest of Obama’s presidency ending in early January 2017. Everyone from Conan O’Brien to Andrew Cuomo to Steve Nash began showing up in Havana. As a University of Miami’s Cuba expert, Michael J. Bustamante, noted at the time, “the American flag has even become the most stylish national standard, appearing on Cubans’ T-shirts, tights and tank tops.”

However, the Trump presidency (2017-21) and the Biden presidency since early 2021 have been engaged in U.S. policies of hostility toward Cuba.

Now the emergence of an important private enterprise sector of the Cuban economy has provided the opportunity for the two countries to return to better relations that improve the living conditions of the people on the island. This argument was well put in an op-ed article in the Miami Herald by Miguel “Mike” Fernandez, the Chairman of Coral Gables, Florida’s MBF Healthcare Partners, who said the following:

“It is time to shift our focus toward uplifting the Cuban people, primarily by supporting and empowering the emerging private sector, to restore hope and a bright future for the nation.”
“By promoting and facilitating engagement and collaboration with Cuba’s emerging private sector, the United States can foster positive change, enhance regional stability and tap the vast potential of Cubans’ entrepreneurial spirit, while reducing the vast numbers of Cuban immigrants arriving at the southern border.”
“A notable, and not so quiet, course change has begun as the Cuban government has had to accept the reality that it’s broke. Hence the emergence of a private sector, which can use our support because of our know-how and capital resources as a viable alternative to a punitive strategy. . . . [This private sector] is providing solutions for Cubans where the government no longer can. . . . [and] presents an opportunity to transform the country’s economic landscape.”
“It is crucial for the United States to support and engage with Cuba’s private sector to reduce emigration to this country and promote stability and prosperity within the island. . . . By redirecting our efforts toward supporting the growth of entrepreneurship, small businesses and foreign investment, we can foster an environment of economic independence for Cubans.”

At the top of the “to do” list for the U.S. is cancelling (1) the U.S. embargo [blockade] of Cuba; (2) the U.S. designation of Cuba as a state sponsor of terrorism, which the Obama Administration had done in 2015; and (3) the ban on U.S. tourist visas for Cuba. The U.S. should also initiate diplomatic discussions with Cuba regarding many issues, including U.S. positions on Cuba set forth in U.S. annual reports on world-wide trafficking in persons; religious freedom; and human rights.[7]

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[1] E.g., Cordoba, Cuban Migrants Head to the U.S. in Record Numbers, W.S.J. (Aug. 24, 2022)

[2] Trump declares economic war on Cuba, the Conversation (April 18, 2019); Communications sector severely damaged by the US blockade, Granma (Aug. 2, 2023).

[3] Torres, Capitalism makes strong comeback in Cuba after six decades of socialism. Will it last?, Miami Herald (June 23, 2023); Torres, How Miami companies are secretly fueling the dramatic growth of Cuba’s private businesses, Miami Herald (June 23, 2023); Fernandez, Transforming U.S.-Cuba relations: From dominating to elevating/Opinion, Miami Herald (July 19, 2023); MF Healthcare Partners, Rodriguez, Evaluate new proposals for measures in commerce to promote payment through electronic channels, Granma (Aug. 3, 2023); Torres, Sudden banking cash-withdrawal limit threatens private sector and food imports to Cuba, Miami Herald (Aug. 4, 2023).

[4] Demirjian & Wong, China to Build Station That Could Spy on U.S. from Cuba, Officials Say, N.Y. Times (June 8, 2023); Strobel & Lubold, Cuba to Host Secret Chinese Spy Base Focusing on U.S., W.S.J. (June 8, 2023); Cordoba, Cuba’s Spy Deal With China Has Echoes of Cold War Tensions, W.S.J. (June 8, 2023); Gale & Ramzy, Cuba Base Would Help China Identify Strike Targets in U.S., W.S.J. (June 9, 2023); Hutzler & Vyas, Cuba Spy Station Brings China Closer to America’s Doorstep, W.S.J. (June 9, 2023); Demirjian & Wong, China Has Had a Spy Base in Cuba for Years, Official Says, N.Y. Times (June 10, 2023); Lubold & Strobel, White House Says China Has Had Cuba Spy Base Since at Least 2019, W.S.J. (June 11, 2023); Strobel, Lubold, Salama & Gordon, Beijing Plans a New Training Facility in Cuba, Raising Prospect of Chinese Troops on America’s doorstep, W.S.J. (June 20, 2023); Editorial, China’s New Military Footprint in Cuba, W.S.J. (June 20, 2023; Yu, China Plans With Cuba for Global Dominance, W.S.J. (June 29, 2023); Suchlicki, The Russians are coming back to Cuba, prepared to challenge U.S. on its doorstep/Opinion, Miami Herald (June 23, 2023); Bihart, America’s Foes Are Joining Forces, N.Y. Times (July 3, 2023); Torres, China has had a spy base in Cuba for decades, former intelligence officer says, Miami Herald (July 5, 2023).Suri, Opinion: In tough times, Russia turns to a Cold War comrade, CNN.com (July 20, 2023).

[5] Editorial, China’s New Military Footprint in Cuba, W.S.J. (June 20, 2023); U.S. State Dep’t, Department Press Briefing—(June 21, 2023); Cuba Foreign Minister Parrilla, Cuba is not a threat to the United States or any other country, Granma (June 13, 2023). Communications sector severely damaged by the US blockade, Granma (Aug. 2, 2023);

[6] President Obama Rescinds U.S. Designation of Cuba as a ‘State Sponsor of Terrorism,” dwkcommantaries.com (04/15/15); U.S. Rescinds Designation of Cuba as a “State Sponsor of Terrorism, dwkcommantaries.com (05/29/15) U.S. State Dep’t, U.S. Relations with Cuba (Nov. 22, 2019).

[7] This post does not comment on the multitude of issues regarding U.S.-Cuba relations. However, this blog has published a list of many of these posts about many of these issues, which has not been recently updated, (See, e.g., List of Posts to dwkcommentaries—Topical: CUBA [as of 5/4/20].