December 17, 2016 was the second anniversary of Presidents Obama and Castro’s joint announcement that their two countries had embarked on the path of normalization and reconciliation. The U.S. commemoration of this date was subdued. The White House held a small gathering that was not widely publicized .The Cuban government, on the other hand, apparently did not hold any such event. But two Cuban publications published sketchy comments on the anniversary.
On December 15, the Obama Administration hosted a private gathering across the street from the White House at the Eisenhower Executive Office Building. President Obama did not attend, but did send a letter to the 20 or so attendees encouraging them “to carry forward the work of strengthening our partnership in the years ahead.”
The gathering was addressed by Benjamin Rhodes, Deputy National Security Advisor; Jeffrey DeLaurentis, the acting U.S. ambassador in Havana; and three high-level officials from the U.S. Commerce, State and Treasury departments. Another speaker was
José Ramón Cabañas, the Cuban Ambassador in Washington. Also in attendance were U.S. Senator Patrick Leahy of Vermont and U.S. Representative Kathy Castor of Tampa, Florida, both Democrats.
Rhodes and DeLaurentis touted the administration’s accomplishments and, at different times, got emotional — Rhodes remembering support from Cuban-American friends in the wake of stinging criticism over his work, and DeLaurentis describing his work in Cuba, where he began and might end his diplomatic career, as the most rewarding of his life.
The attendees were Cuban Americans, Cuban government officials and business partners in Washington, including Miami entrepreneur Hugo Cancio, who publishes an arts magazine in Cuba; Felice Gorordo, founder of the Roots of Hope nonprofit; former U.S. Commerce Secretary Carlos Gutierrez; John McIntire, head of the Cuba Emprende Foundation; Miami attorney Ralph Patino; Giancarlo Sopo, founder of the CubaOne foundation, and Miami Foundation president and chief executive Javier Alberto Soto.
Another attendee, Ted Henken, a Baruch College sociology professor and Cuba expert, observed, “It was partly a celebration of what has been achieved, and a mourning” for the intense political fight that awaits.”
As Ric Herrero, former head of the pro-engagement Cuba Now group and the current president of Manos Americas, a social entrepreneurship nonprofit, put it, the gathering was “bittersweet. There was just a lot of gratitude toward the administration for their commitment to this cause and to everything they’ve done.” But they all were left with the questions: “What next? Where do we go from here? Because there is no certainty.”
Indeed, a chief concern among attendees was that Trump’s “volatile” personality could ignite a war of words with the Cubans, who have so far kept silent about the president-elect’s Cuba statements. On the other hand, attendees noted, Trump doesn’t have a clear political ideology, and could be more interested in showing up Obama on Cuba by negotiating more concessions. However, Rhodes said, “We would like nothing more than the new administration to succeed beyond what we did.”
Obama supporters at the meeting thought that Trump had a willingness to keep negotiating with Raúl Castro’s government and that U.S. regulatory changes, following a top-to-bottom policy review, could take time–so long, perhaps, that by then Castro might near his own retirement, scheduled for February 2018.
“We’re living through a lot of uncertainty, but there’s a pretty strong consensus that Trump is going to realize that turning back the clock is going to be very difficult,” said Carlos Saladrigas, president of the Cuba Study Group. “Returning to a failed policy doesn’t make any sense.”
However, at a December 16 “thank You” rally in Ordlando, Flordia, Trump told the crowd, “America will also stand with the Cuban people in their long struggle for freedom. Their support has been unbelievable. The Cuban people. We know what we have to do, and we’ll do it. Don’t worry about it.”
No Cuban commemoration event was found in searching Cuban public sources, Instead, two articles on the subject were found.
The CubaDebate article reviewed some of the key things that had happened since December 17, 2014, while reiterating Cuba’s fervent desire for the U.S. to end its embargo (blockade) and to return Guantanamo Bay to the island. It also alleged that President Obama had done “much less than he could, given the broad executive powers that he [allegedly]possesses and that [allegedly] would have allowed him to reduce the blockade to its minimum expression.”
Nevertheless, the article stated, on December 7, 2016, Josefina Vidal of the Cuban government reaffirmed Cuba’s willingness to continue this process and expressed its hope that President-elect Donald Trump will take into account, when he takes office on January 20, what has been achieved” over the last two years.
These same points were essentially repeated in the article in Granma, the official newspaper of the Communist Party of Cuba. It also added the following points:
Obama had acknowledged for the first time that the U.S. policy of “aggression” [“hostility” would be more diplomatic] against Havana was a failure and had ended up isolating the U.S. itself. It also alleged that the U.S. methods were changing, but not its objective – regime change in Cuba.
The U.S. still has a ban on US investment in Cuba, except in the area of telecommunications.
The Cuban state sector, where more than 75% of the labor force is employed, remains deprived of selling its products to the U.S. with the sole exception of pharmaceuticals and biotechnology.Also, Cuban imports of goods produced in the U.S. that the state-owned enterprise can make are very restricted.
Although several months ago the US approved the use of the U.S. Dollar by Cuba in its international transactions, it has not yet been possible to make deposits in cash or payments to third parties in that currency, due to international banks’ fears of fines by the U.S.
The U.S. has not yet ended Radio and TV Marti programs aimed at Cuba.
The Wall Street Journal reports that the economic ties between Cuba and Venezuela are fraying in the midst of the latter’s economic meltdown with triple-digit inflation and the country’s largest currency note (100 bolivars) worth just around 2 U.S. cents on the black market, not even enough to buy a piece of hard candy at a street kiosk.
This development is a major cause of Cuba’s current economic troubles as discussed in another post this day.
The primary precipitating cause of the fraying ties between the two countries is Venezuela’s declining oil output and thus declining oil shipments to Cuba. Daily shipments of 115,000 barrels of subsidized Venezuelan oil in 2008, says the Journal, “have dropped to about 55,000 a day this year, forcing Cuba this November “to buy oil on the open market for the first time in 12 years.”
In the earlier prosperous years Venezuela restarted and expanded an oil refinery in Cienfuegos, Cuba, making it the city’s largest employer. “Now the refinery sits idle. The last Venezuelan oil tanker docked here in August, according to oil traders. The shutdown has already sharply raised the cost of living for many residents, who had relied on cheap gasoline smuggled out of the refinery to alleviate hardship.”
Venezuela’s economic crisis also has forced it to reduce its payments to Cuba for the latter’s doctors serving in the former, resulting in the return of thousands of the doctors to Cuba. At its peak, 65,000 Cuban medical staff worked in Venezuela, but at the end of this May there only were 38,300, which was 4,000 fewer than three years ago.
Cuba’s exports of services, mostly such medical missions to Venezuela and elsewhere, fell 15% to $470 million last year from 2013, according to government statistics.
In addition, “Cuba’s flagship airline, Cubana de Aviación, stopped regular flights to Caracas earlier this year. Charters from Caracas to Havana have scaled back too as demand slumped.”
On the surface the two countries continue to pledge solidarity with each other. After Fidel Castro died last month, Venezuela’s government declared three days of national mourning, and its President Nicolás Maduro and a large delegation of high officials spent several days in Cuba to pay respects. He sat to the right of Raúl Castro, Cuba’s president and the elder Mr. Castro’s successor, at the memorial ceremony in Havana, fighting back tears before his turn came to speak to the crowds. Maduro then told the crowd, “Raúl, count on Venezuela. We will carry on the path of victory, the path of Fidel.”
Granma, the official newspaper of the Communist Party of Cuba, poses 10 questions about the recent U.S. Presidential Policy Directive—United States-Cuba Normalization.
Here are those questions with my answers.
(a) Will the U.S. ever recognize that the embargo/blockade has been an illegal and unjust policy of aggression that has caused Cuba economic damages and incalculable human losses?
Answer: No. As Ambassador Samantha Power stated at the U.N. on October 26, the U.S. believes that the embargo has been legal. As mentioned in an earlier post, I have suggested that the dispute over this issue could be and should be resolved by an independent panel of international arbitrators, such as those provided by the Permanent Court of Arbitration at the Hague in the Netherlands.
(b) Is the U.S. willing to compensate the Cuban people for damages and losses [allegedly] caused by the embargo/blockade?
Answer: No. The major premise for the Cuban damages claim is the contention that the embargo/blockade is illegal. The U.S. does not accept this contention. Nor, I assume, does the U.S. accept the Cuban calculation of such alleged damages. The amount of any alleged damages undoubtedly would be challenged by the U.S. in the international arbitration proceedings previously mentioned. After all, even Cuba admitted in presenting its most recent resolution against the embargo at the U.N. General Assembly that there are many other reasons for Cuba’s poor economic record, including its own mistakes.
2. [Will the U.S. end its occupation of Guantanamo Bay?]
Answer. No. The Directive clearly states that the U.S. believes that its lease of Guantanamo Bay from Cuba is legal and that the U.S. will not voluntarily return the territory to Cuba. Cuba, on the other hand, persistently asserts that the U.S. use of the territory is illegal. As a previous post suggests, this dispute should be submitted to an international arbitration panel similar to the one previously mentioned. In such a proceeding both parties would submit evidence and legal arguments, and the arbitration panel would render a decision. At any time the parties could settle this dispute by negotiating a new lease at a much higher annual rental.
Should the U.S. terminate its so-called “Democracy Assistance” programs?
Answer. Yes, as this blog has consistently argued, these programs are counterproductive and illogical. One cannot promote democracy with anti-democratic and undercover programs. But the U.S. continues to do so, and I will continue to object to them and call for their abolition.
What does the Directive mean when it says that “democracy assistance” programs will be more “transparent” and “consistent with programming in other similarly situated societies around the world?”
Answer. I do not know what is meant by “transparent,” unless it means the U.S. Government publicly solicits applicants to conduct such programs. But such programs are not “transparent” when conducted secretly or undercover as such programs have done so in Cuba.
Should the U.S. end its Radio and TV Marti?
Answer. Yes. This blog previously has called for the ending of such programs as antithetical to promoting democracy and human rights in Cuba. Now there is less need for such programs given the increasing availability of the Internet with its overwhelming information in Cuba. As the Directive states, “increased access to the internet is boosting Cubans’ connectivity to the wider world and expanding the ability of the Cuban people, especially youth, to exchange information and ideas.”
What is the point of applying [U.S.] measures only benefiting a small part of the population, [the 24% currently in the] private sector?
Answer. The U.S. clearly believes that private enterprise and the private sector will enhance Cuban prosperity and that this sector needs and deserves external assistance. And President and First Secretary Raúl Castro said essentially the same thing at last April’s Seventh Congress of the Communist Party of Cuba.
7. Why [does the U.S.] maintain the restriction on creating joint ventures [with Cubans] for the development and marketing of these products, [I.e., medicines and vaccines]?
Answer. As the Directive states, the U.S. “will promote joint work [with Cuba], such as development of vaccines, treatments, and diagnostics; partner with Cuba to prevent, detect, and respond to infectious disease outbreaks; collaborate in the field of cancer control, treatment programs, and joint research; and exchange best practices related to access to healthcare.” This blogger does not know if there are restrictions against joint ventures in this area, but he clearly favors elimination of the U.S. embargo and other restrictions on U.S.-Cuba business and trade.
Does [the U.S.] acknowledge that Cuba’s socio-economic model, based on the public control over the fundamental means of production, guarantees achievements in two spheres strategic for the nation’s future, [i.e., medical care and education]?
Answer. Yes, as the Directive states, the U.S. recognizes, “Cuba has important economic potential rooted in the dynamism of its people, as well as a sustained commitment in areas like education and health care.” In addition, President Obama in his March 2016 speech in Havana said, “Cuba has an extraordinary resource — a system of education which values every boy and every girl” and “no one should deny the service that thousands of Cuban doctors have delivered for the poor and suffering.”
Why are U.S. companies still prohibited from investing in Cuba, with the exception of the telecommunications sector, approved by Obama in 2015?
Answer. This blogger does not know, but he clearly favors elimination of the U.S. embargo and other restrictions on U.S.-Cuba business and trade.
Is President Barack Obama willing to continue using his executive prerogatives to make the policy change toward Cuba irreversible?
Answer. This blogger does not know the answer to this question, but to the extent President Obama has executive authority to enact additional liberalizations of restrictions on business and trade with Cuba in his remaining weeks in office, I hope he will do so.
On October 26, the United Nations General Assembly voted, 191 to 0 (with two abstentions), to adopt a resolution proposed by Cuba to condemn the United States embargo of Cuba. For the first time in the 25-year history of the annual vote on such resolutions, the U.S, rather than opposing the text, cast an abstention, prompting Israel to do likewise.
This post will examine the resolution’s text, its presentation by Cuba, its support by other countries and the arguments for abstention offered by the U.S. and Israel. This post will then conclude with a brief discussion of reaction to the abstention in the U.S. Prior posts discussed the similar General Assembly resolutions against the embargo that were adopted in 2011, 2014 and 2015.
It reiterated “its call upon all States to refrain from promulgating and applying laws and measures [like the U.S. embargo against Cuba] . . . in conformity with their obligations under the Charter of the United Nations and international law, which, inter alia, reaffirm the freedom of trade and navigation (¶ 2). It also urged “States that have and continue to apply such laws and measures to take the steps necessary to repeal or invalidate them as soon as possible in accordance with their legal regime (¶ 3).
The resolution’s preamble reaffirmed “the sovereign equality of States, non-intervention and non-interference in their internal affairs and freedom of international trade and navigation, which are also enshrined in many international legal instruments” and recited the previous General Assembly resolutions against the embargo. It then welcomed “the progress in the relations between the Governments of Cuba and the [U.S.] and, in that context, the visit of the President of the [U.S.], Barack Obama, to Cuba in March 2016” while also recognizing “the reiterated will of the President of the [U.S.] to work for the elimination of the economic, commercial and financial embargo against Cuba” and “the steps taken by the [U.S.] Administration towards modifying some aspects of the implementation of the embargo, which, although positive, are still limited in scope.”
Cuba’s Presentation of the Resolution
Speaking last in the debate, Cuba’s Foreign Minister Bruno Rodriguez Parrilla, presented arguments for adopting the resolution. Here are extracts of that speech:
“[T]here has been progress [between Cuba and the U.S. since December 2014] in the dialogue and cooperation on issues of common interest and a dozen agreements were signed [and] reciprocal benefits reported. Now just announced the vote of the US abstention on this draft resolution.”
“The [U.S.] president and other top officials have described [the embargo/blockade] as obsolete, useless to advance American’s interests, meaningless, unworkable, being a burden for [U.S.] citizens, . . . [harming] the Cuban people and [causing]. . . isolation to the [U.S.] and [have] called [for the embargo/blockade] to be lifted.”
“We recognize that executive measures [to reduce the scope of the embargo] adopted by the government of the [U.S.] are positive steps, but [have] very limited effect and scope. However, most of the executive regulations and laws establishing the blockade remain in force and are applied rigorously to this minute by U.S. government agencies.”
“Meanwhile, the U.S. Congress has not approved any of the 20 amendments or legislative initiatives, with bipartisan support, . . . [for] eliminating some restrictions of the blockade or even all of this policy. [Moreover,] there have been more than 50 legislative initiatives that threaten to reinforce key aspects of the blockade, preventing the President [from] approving new executive or implementing measures already adopted.”
“It cannot be underestimated in any way the powerful political and ethical message that [action by this Assembly] . . . sends to the peoples of the world. The truth always [finds] its way. Ends of justice prevail. The abstention vote announced surely is a positive step in the future of improved relations between the[U.S.] and Cuba. I appreciate the words and the efforts of Ambassador Samantha Power.”
“[There] are incalculable human damages caused by the blockade. [There is no] Cuban family or industry in the country that does not suffer its effects on health, education, food, services, prices of goods, wages and pensions.” For example, the “imposition of discriminatory and onerous conditions attached to the deterrent effects of the blockade restrict food purchases and the acquisition in the U.S. market for drugs, reagents, spare parts for medical equipment and instruments and others.”
“The [embargo/] blockade also [adversely] affects the interests of American citizens themselves, who could benefit from various services in Cuba, including health [services].”
“The [embargo/] blockade remains a massive, flagrant and systematic violation of human rights of all Cubans and qualifies as an act of genocide under the Convention on the Prevention and Punishment of the Crime of Genocide of 1948. It is an obstacle to cooperation [in] international humanitarian areas.”
“The blockade is the main obstacle to economic and social development of our people. It constitutes a flagrant violation to international law, the United Nations Charter and the Proclamation of Latin America and the Caribbean as a Zone of Peace. Its extraterritorial application adds further to its violation of international law nature of magnitude.”
“Other causes, in addition to [the blockade/embargo] . . . , determine our economic difficulties: the unjust international economic order; the global crisis; the historical distortions and structural weaknesses caused by underdevelopment; high dependence on energy and food imports; the effects of climate change and natural disasters; and also . . . our own mistakes.”
“Between April 2015 and March 2016, the direct economic damage to Cuba by the blockade amounted to $4.68 billion at current prices, calculated rigorously and prudently and conservatively. The damages accumulated over nearly six decades reach the figure of $753 billion, taking into account depreciation of gold. At current prices, [that is] equivalent to just over $125 billion.”
“On 16 April 2016 President Raul Castro Ruz said, ‘We are willing to develop a respectful dialogue and build a new relationship with the [U.S.], as that has never existed between the two countries, because we are convinced that this alone . . . [will provide] mutual benefits.’ And last September 17, he said ‘I reaffirm the will to sustain relations of civilized coexistence with the [U.S.], but Cuba will not give up one of its principles, or make concessions inherent in its sovereignty and independence.’”
“The government of the [U.S.] first proposed the annexation of Cuba and, failing that, to exercise their domination over it. The triumph of the Cuban Revolution . . . [prompted the U.S. adoption of the embargo whose purpose] was ‘to cause disappointment and discouragement through economic dissatisfaction and hardship … to deny Cuba money and supplies, in order to reduce nominal and real wages, with the aim of causing hunger, desperation and overthrow of government. ‘”
“The [new U.S.] Presidential Policy Directive [states] that the Government of the [U.S.] recognizes ‘the sovereignty and self-determination of Cuba’ and [the right of] the Cuban people to make their own decisions about their future.’” It also states “the U.S. will not seek a ‘change of regime in Cuba.’”
But the Directive also says “’the [U.S.] will support the emerging civil society in Cuba and encourage partners and non-governmental actors to join us in advocating in favor of reforms. While the United States remain committed to supporting democratic activists, [we] also [will] participate with community leaders, bloggers, activists and other leaders on social issues that can contribute to the internal dialogue in Cuba on civic participation.’ The Directive goes on to say: “The [U.S.] will maintain our democracy programs and broadcasting, while we will protect our interests and values, such as Guantanamo Naval Base … The government of the United States has no intention of modifying the existing lease agreement and other related provisions.’”
The Directive also asserts that Cuba “remains indebted to the [U.S.] regarding bilateral debts before the Cuban Revolution.”
The U.S. needs to “recognize that change is a sovereign matter for Cubans alone and that Cuba is a truly independent country. It gained its independence by itself and has known and will know how to defend [its] greatest sacrifices and risks. We are proud of our history and our culture that are the most precious treasure. We never forget the past because it is the way never to return to it. And we decided our path to the future and we know that is long and difficult, but we will not deviate from it by ingenuity, by siren songs, or by mistake. No force in the world can force us to it. We will strive to build a sovereign, independent, socialist, democratic, prosperous and sustainable nation. We will not return to capitalism.”
During the debate the following 40 countries expressed their support of the resolution:
Latin America: Argentina, Bolivia, Brazil, Colombia, Costa Rica, Dominican Republic (for Commonwealth of Latin American and Caribbean States (CELAC)), Ecuador, El Salvador, Jamaica (for Caribbean Community (CARICOM)), Mexico, Nicaragua, Saint Vincent and Grenadines, Uruguay and Venezuela (for Non-Aligned Movement (NAM)).
Africa: Algeria, Angola, Libya, Mozambique, Namibia, Niger (for African States), South Africa, Sudan and Tonga.
Middle East: Egypt, Kuwait (for Organization of Islamic Conference (OIC)) and Syria.
Asia: Belarus, China, Democratic People’s Republic of Korea [North Korea], India, Indonesia, Iran, Lao People’s Democratic Republic, Malaysia, Myanmar, Russian Federation, Singapore (for Association of Southeast Asian Nations (ASEAN)), Thailand (for Group of 77 and China) and Viet Nam.
The U.S. Ambassador and Permanent Representative to the United Nations, Samantha Power, announced the U.S. abstention before the debate and voting on the resolution. Here are extracts of her speech about that vote.
“For more than 50 years, the [U.S.] had a policy aimed at isolating the government of Cuba. For roughly half of those years, U.N. Member States have voted overwhelmingly for a General Assembly resolution that condemns the U.S. embargo and calls for it to be ended. The [U.S.] has always voted against this resolution. Today the [U.S.] will abstain.”
“In December 2014, President Obama made clear his opposition to the embargo and called on our Congress to take action to lift it. Yet while the Obama Administration agrees that the U.S. embargo on Cuba should be lifted, . . . we don’t support the shift for the reason stated in this resolution. All actions of the [U.S.] with regard to Cuba have been and are fully in conformity with the U.N. Charter and international law, including applicable trade law and the customary law of the sea. We categorically reject the statements in the resolution that suggest otherwise.”
“But [today’s] resolution . . . is a perfect example of why the U.S. policy of isolation toward Cuba was not working – or worse, how it was actually undermining the very goals it set out to achieve. Instead of isolating Cuba, . . . our policy isolated the [U.S.], including right here at the [U.N.].”
“Under President Obama, we have adopted a new approach: rather than try to close off Cuba from the rest of the world, we want the world of opportunities and ideas open to the people of Cuba. After 50-plus years of pursuing the path of isolation, we have chosen to take the path of engagement. Because, as President Obama said in Havana, we recognize that the future of the island lies in the hands of the Cuban people.”
“Abstaining on this resolution does not mean that the [U.S.] agrees with all of the policies and practices of the Cuban government. We do not. We are profoundly concerned by the serious human rights violations that the Cuban government continues to commit with impunity against its own people – including arbitrarily detaining those who criticize the government; threatening, intimidating, and, at times, physically assaulting citizens who take part in peaceful marches and meetings; and severely restricting the access that people on the island have to outside information.”
“We [,however,] recognize the areas in which the Cuban government has made significant progress in advancing the welfare of its people, from significantly reducing its child mortality rate, to ensuring that girls have the same access to primary and secondary school as boys.”
“But none of this should mean that we stay silent when the rights of Cuban people are violated, as Member States here at the [U.N.] have too often done. That is why the [U.S.] raised these concerns directly with the Cuban government during our [recent] historic dialogue on human rights . . ., which shows that, while our governments continue to disagree on fundamental questions of human rights, we have found a way to discuss these issues in a respectful and reciprocal manner. We urge other Member States to speak up about these issues as well.”
“As President Obama made clear when he traveled to Havana, we believe that the Cuban people – like all people – are entitled to basic human rights, such as the right to speak their minds without fear, and the right to assemble, organize, and protest peacefully. Not because these reflect a U.S.-centric conception of rights, but rather because they are universal human rights – enshrined in the U.N. Charter and in the Universal Declaration of Human Rights – which all of our 193 Member States are supposed to respect and defend. Rights that are essential for the dignity of men, women, and children regardless of where they live or what kind of government they have.”
The U.S. concedes that it “has work to do in fulfilling these rights for our own citizens. And we know that at times in our history, U.S. leaders and citizens used the pretext of promoting democracy and human rights in the region to justify actions that have left a deep legacy of mistrust. We recognize that our history, in which there is so much that makes us proud, also gives us ample reason to be humble.”
“The [U.S.] believes that there is a great deal we can do together with Cuba to tackle global challenges. That includes here at the [U.N.], where the decades-long enmity between our nations has at best been a distraction – and at worst, an obstacle – to carrying out some of the most important work of this institution and helping the world’s most vulnerable people.”
Engage Cuba, a U.S. national coalition of private companies, organizations and state and local leaders working to lift the embargo, said, “Year after year, the international community has condemned our failed unilateral sanctions that have caused great economic hardship for the people of Cuba and continue to put American businesses at a competitive disadvantage. The fact that the Administration and Israel abstained from voting for the first time ever demonstrates the growing recognition that the U.S. embargo on Cuba is a failed, obsolete policy that has no place in today’s international affairs.”
Senator Marco Rubio (Rep., FL), on the other hand, blasted the abstention, saying the Obama administration had failed to honor and defend U.S. laws in an international forum. Similar negative reactions were registered by Senators Ted Cruz (Rep., FL) and Robert Menendez (Dem., NJ), Republican Representatives from Florida, Ileana Ros-Lehtinen and Mario Diaz-Balart, and the U.S.-Cuba Democracy PAC.
As an U.S. citizen-advocate for ending the embargo as soon as possible, I am pleased with the U.S. abstention and agree with Ambassador Power that this vote does not mean the U.S. agrees with the resolution’s stated reasons.
Moreover, too many in the U.S. believe the Cuban damages claim from the embargo is just a crazy Cuban dream, but I disagree. Given the amount of the claim, Cuba will not someday tell the U.S. to forget it. A prior post, therefore, suggested that the two countries agree to submit this and any other damage claims by both countries for resolution by an independent international arbitration panel such as those provided by the Permanent Court of Arbitration at the Hague in the Netherlands.
Jon Lee Anderson, the author of a Che Guevara biography and a forthcoming book about Fidel Castro and the Cuban revolution, has written a fascinating article about President Obama and Cuba in The New Yorker. It provides the following details about Obama’s March 2016 visit to the island and comments about his decision to seek normalization with Cuba beyond those already discussed in earlier posts.
During his visit to Cuba, President Obama hosted an Entrepreneurship and Opportunity Event at La Cervecería (a beer hall) on Havana Harbor. Attending were invited American and Cuban entrepreneurs, government officials and journalists. Brian Chesky, the co-founder of Airbnb, told the group that Cuba was one of its fastest growing markets. In response to Obama’s question, he said his company was now valued at $25 billion after only eight years of operation, and Obama used this as an example of what could happen to a new business. Obama said, “Cuba should take ideas, steal ideas from wherever you see something working, not from where they are not. There are some economic models (like Cuba’s) that just don’t work. That’s just the objective reality. The American people are not interested in Cuba failing. We’re interested in Cuba being a partner with us.”
After Obama had departed the island, a member of Cuba’s security services said that this event was “as subversive as the Bay of Pigs.” Other Communist Party loyalists voiced similar opinions.
Later Obama admitted that he thought the Cuban pushback to his visit would be a lot stronger. The beer hall event, he said, intentionally bypassed the Cuban state in order to advertise and promote the possibilities of commerce freed of political constraint.
Obama also said after his trip that his decision to seek normalization with Cuba was based upon these premises: (1) “Cuba is a tiny, poor country that poses no genuine threat to the [U.S.]” (2) “In this era of the Internet and global capital movements, openness is a more powerful change agent than isolation.” (3) “If you are interested in promoting freedom, independence, civic space inside of Cuba, then . . . remittances to give individual Cubans some cash . . . that then allowed them to start a [business] . . . was going to be the engine whereby individual Cubans . . . can start expecting more.”
Important for Obama was growing up in underdeveloped Indonesia and “never [being] star-struck by revolution. [He believed that Cuba’s revolution had started because of good motives, but he] “was never persuaded that they had taken the right course of action.”
Obama also told Anderson that he believes Raúl Castro’s pursuit of normalization with the U.S. was based upon two conclusions. First, Castro recognized—“particularly in light of what’s happening in Venezuela—that sustaining their economic model over the next ten years becomes increasingly untenable. [Therefore,] how . . . [does he] make [the Cuban] economy run without giving up power. . . . [Second,] Raúl recognizes that any substantial change to their economic system, . . . their civil society, . . . their full political system—requires him to do some downfield blocking [i.e., preparatory work]. If a younger generation tries to pull this off without the revolutionary credentials, there will be too much pushback.”
A previous post covered the July 8th speeches to Cuba’s legislature (the National Assembly of People’s Power) by President Raúl Castro and Minister of Economy and Planning, Marino Murillo. However, that post was unable to dissect the English translation of the latter. Now Granma, Cuba’s Communist Party newspaper, has provided the following analysis of Murillo’ speech.
In the last half of 2016, the Cuban government will be implementing measures that are “intended to optimize the country’s finances and emphasize the need for rational use of resources and efficiency, in order to reduce expenses and take advantage of untapped opportunities for savings.”
These measures include “plans to reduce liquid operations, which include adjustments by entities which have hard currency self-financing systems in place. Others involve suspending the assumption of short and medium term credits, as well as a cut, of approximately 28%, in planned energy consumption in the non-residential sector.”
The reductions of these expenses will mean “elimination of income” for some, but “other sectors with untapped opportunities are called upon to make an extra contribution to the economy. Tourism, for example, must generate some 25 million pesos more than initially planned.”
“In terms of energy consumption, fuel cutbacks of some 369,000 tons . . . are needed, while use of electrical energy must be reduced by 786 gigawatts. . . . However, the residential sector, which represents 60% of the country’s electricity consumption, will not be impacted.”
“Economic activities, such as tourism, which make a strategic contribution to the national economy – and consequently the country as a whole – will receive their projected supply of electricity, as will others capable of assuring export income or replacing imports with their products. Nor will the importing and production of food, or retail sales, be affected.”
“Also prioritized is the production of construction materials and indispensable inputs for agriculture, while maintaining attention to the country’s internal financial equilibrium.”
The steps to be taken in the last half of this year “are intended to address limitations with rationality, without changing the basic plan, and respond to the energy situation with precisely focused adjustments.”
There will be “strict adherence to the principle that funds allocated for salaries must be backed by production, in accordance with guiding benchmarks. Avoiding a negative impact on the average salary-productivity ratio is key to advancing along the course charted.”
“Leading the list of imperatives is stopping the importing of containers full of items that can be produced domestically, since reducing imports is crucial to balancing the budget equation.”
Encouragement was found in the increase in the “volume of milk collected by the state wholesale system . . ., implying a reduction in expenses associated with importing powdered milk, initially projected at 53,000 tons. Since dairy farmers have surpassed plans by more than seven million liters and the industry by 32 million, projected imports can be reduced.”
Another premise for these measures is “reducing expenses in hard currency to a minimum, maintaining only the indispensable associated with key economic activities.”
Also important is “avoiding the addition of inflationary pressures. Adequate levels of retail sales will be assured, and the necessity of salary expenses having productive backing is reiterated.”
“Other results thus far this year indicate the need to reprogram levels of freight transportation and, therefore, scheduled investments. It is now projected, however, that 17% of the funds originally planned for investment will not be spent. The 2016 total was estimated at 6.5 billion pesos, placing the transport sector among those with the largest investment plans in the country. Key development projects to a tune of 4.5 billion pesos will be guaranteed. The prioritized group of sectors in which strategic investments will be fully funded includes tourism, energy, the oil industry, and agricultural programs.”
The “average salary in state enterprises will be slightly lower than projected, with a reduction in the wage expenses-gross value added index.”
“In reference to the food supply, . . . planned imports of foodstuffs are assured. Fortunately, a decline in prices on the international market for some [food] products has given the state some relief in terms of funds allocated for food imports, allowing for savings of approximately 193 million U.S. dollars. Nevertheless, domestic shortfalls in projected production of food items have led to unplanned imports, costing some 50 million additional dollars.”
Recent steps have been “taken to increase the buying power of the Cuban peso, adding that efforts to stabilize their supply in retail outlets continue, to make the impact of price reductions sustainable over time. Lower prices for chicken, rice, cooking oil, powdered milk, and chickpeas have led to [recent] increased sales.”
“Throughout the report, a renewed call for increased productivity and efficiency, on the part of all, was made clear. Using resources rationally at all times, in all places, is now imperative.”
 Delgado, Morales & Rodriguez, Efficiency on the economic agenda, Granma (July 14, 2016). On July 13, only five days after this speech, Murillo was replaced as Minister of Economy and Planning by Ricardo Cabrisas Ruiz, Vice President of Council of Ministers. According to the State Council, Murillo, in his capacity as Deputy Prime Minister and Head of the Permanent Commission for Implementation and Development, will now focus on updating the Cuban economic and social model, adopted by the 6th and the 7th Party congresses. However, no reasons were provided for this change. Official Note, Granma (July 13, 2016), ; Assoc. Press, Cuba Shuffles Economic Leadership Amid Fiscal Struggles, N.Y. Times (July 13, 2016).
On May 16, in Havana the U.S.-Cuba Bilateral Commission held its third meeting to review the status of the countries’ efforts to normalize relations. The U.S. delegation was headed by Ambassador Kristie Kenney, currently serving as Counselor of the Department of State, who was assisted by John S. Creamer, Deputy Assistant Secretary of State, Bureau of Western Hemisphere Affairs, U.S. Department of State; and by U.S. Ambassador Jeffrey DeLaurentis, Chargé d’Affaires, U.S. Embassy, Havana, Cuba. The Cuban delegation’s head was Josefina Vidal Ferreiro, the Director General of the Cuban Ministry of Foreign Affairs’ Department of the United States.
Before the meeting the U.S. State Department said it “will provide an opportunity to review progress on a number of shared priorities since the last Bilateral Commission meeting in November 2015, including progress made during the President’s historic trip to Cuba in March. The United States and Cuba expect to plan continued engagements on environmental protection, agriculture, law enforcement, health, migration, civil aviation, direct mail, maritime and port security, educational and cultural exchanges, telecommunications, trafficking in persons, regulatory issues, human rights, and claims for the remainder of 2016.”
Director General Vidal’s Press Conference
At a press conference after the meeting, Director General Vidal said the meeting had been “productive” and conducted in a “professional climate of mutual respect.” (A photograph of Vidal at the press conference is on the left.) The parties agreed to hold the fourth meeting of the Bilateral Commission in September 2016 in Washington, D.C.
Vidal also said she had told the U.S. delegation that Cuba reiterates its “appreciation for the positive results from President Obama’s visit to Cuba” that had been mentioned by President Raúl Castro during Obama’s visit. Indeed, she said, Cuba believes this visit is “a further step in the process towards improving relations” between the two countries and “can serve as an impetus to further advance this process.”
Vidal acknowledged that there has been an increase in official visits as well as technical meetings on topics of common interest resulting in nine bilateral agreements to expand beneficial cooperation.
According to Vidal, both delegations agreed on steps that will improve relations, including conducting high-level visits and technical exchanges on environmental, hydrography, and implementation and enforcement of the law, including fighting trafficking in drugs and people, and immigration fraud. The two countries also are getting ready to conclude new agreements to cooperate in areas such as health, agriculture, meteorology, seismology, terrestrial protected areas, response to oil-spill pollution, fighting drug trafficking and search and rescue, among others. They also are ready to start a dialogue on intellectual property and continue those relating to climate change and regulations in force in the two countries in the economic and trade area.
However, Vidal said, progress has not been as fast in the economic area because “the blockade [embargo] remains in force” despite the positive measures taken by President Obama to loosen U.S. restrictions. There still are significant U.S. restrictions on U.S. exports to Cuba and imports from Cuba. In addition, U.S. investments in Cuba are not allowed except in telecommunications, and there are no normal banking relations between the two countries. Therefore, Cuba stressed again the priority of the “lifting the economic, commercial and financial blockade [embargo].”
More specifically Vidal said Cuba had told the U.S. representative that in the last six months two American companies and one French company had been fined by the U.S. for maintaining links with Cuba while Cuba has had problems with 13 international banks’ closing accounts, denying money transfers or suspending all operations with Cuba. In addition, six service providers have ceased providing services to Cuban embassies and consulates in third countries (Turkey, Austria, Namibia and Canada).
In addition, the Cuban delegation, said Vidal, had reaffirmed the need for the U.S. to return to Cuba the territory [allegedly] illegally occupied by the U.S. naval base in Guantanamo. It “is the only case of a military base in the world that is based in a territory leased in perpetuity, which is an anomaly from the point of view of international law. There is no similar example in the world and is the only instance of a military base in a foreign country against the will of the government and people of that country.
Vidal also mentioned the following U.S. policies and actions that needed to be changed:
the U.S. preferential migration policies for Cuban citizens, expressed in the existence of the policy of dry feet/wet feet;
the U.S. Cuban Adjustment Act regarding those immigration policies;
the U.S. program of parole for Cuban health professionals;
the special U.S. radio and television broadcasts designed especially for Cuba (Radio and TV Marti); and
U.S. programs designed to bring about changes in the economic, political and social system of Cuba.
These U.S. policies, according to Vidal, underscored “a huge contradiction” for the U.S. On the one hand, President Obama said in his speech in Cuba that the U.S. has neither the intention nor the ability to bring about change in Cuba and that in any case it was up to the people of Cuba to make their own decisions. On the other hand, the U.S. has programs with huge budgets ($20 million dollars every year) aimed at bringing about such change. If indeed there is neither the intention nor the ability to bring about change in Cuba, then there is no reason to have such programs.
Normalization, said Vidal, also needs to have protection of rights to trademarks and patents because there are Cuban companies owning well-known marks, which for reasons of the blockade and other reasons have been taken away from the Cubans.
Before the meeting, another Cuban Foreign Ministry official said that the parties previously had discussed, but not negotiated, with respect to Cuba’s claim for damages with respect to the U.S. embargo and the U.S. claims for compensation for property expropriated by the Cuban government. At the meeting itself, according to a Cuban statement, the Cubans had delivered a list of its most recent alleged damages from the blockade (embargo).
U.S. Embassy Statement
The U.S. Embassy in Havana after this Bilateral Commission meeting issued a shorter, but similar, statement about the “respectful and productive” discussions. “Both governments recognized significant steps made toward greater cooperation in environmental protection, civil aviation, direct mail, maritime and port security, health, agriculture, educational and cultural exchanges, and regulatory issues. The parties also discussed dialogues on human rights and claims, and the [U.S.] looks forward to holding these meetings in the near future.”
Since the actual meeting was conducted in secret, it is difficult to assess what was actually accomplished except through officials’ subsequent public comments.
On May 17, the two countries conducted their second Law Enforcement Dialogue, which will be discussed in a subsequent post.
 Vidal’s positive comment about Obama’s visit is in sharp contrast to the negative comments about the visit from Vidal’s superior, Foreign Minister Bruno Rodriguez at the recent Congress of the Communist Party of Cuba. (See Conclusion of Seventh Congress of Communist Party of Cuba, dwkcommentaries.com (April 20, 2016).)
 Beforehand an official of Cuba’s Foreign Ministry said that since the December 2014 announcement of détente the parties had signed nine agreements covering the environment, email, navigation safety, agriculture and travel. In addition, the Telecommunications Company of Cuba (ETECSA) had signed agreements with three U.S. companies for cellular roaming in Cuba; a U.S. company (Starwood) had an agreement to manage several Cuban hotels; and the Carnival cruise lines had made a maiden voyage to the island.