United States of America (USA)

More Thoughts on U.S. Low Fertility Rate

A previous post discussed the issues arising out of the recent record low fertility rate in the U.S.[1] A more recent article added additional thoughts on this development.[2]

First, recent Gallup polling data shows that 45% of respondents said three or more kids was ideal, the highest level since 1971. And American teenage and adult women for decades have desired more kids much higher than the actual fertility rates. That suggests the U.S. should help women achieve the family size they want.

Second, a population that fails to replace itself can face serious challenges. It can lead to stagnant or declining living standards. It also means fewer workers are available to care for the growing elderly population and pay for its retirement benefits. Already the typical American senior citizen receives more Social Security and Medicare payments than they paid into the system. This problem will worsen as the ratio of retirees to working-age Americans grows.

In fact, this last problem is worse than government numbers suggest because they assume a higher future fertility rate than we have been experiencing.

As a result, the U.S. should adopt policies like mandatory paid maternity leave, lower tax burden for families with young kids, improved access to reproductive care and abortions in emergencies. Of course, increased immigration is another solution.

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[1] U.S. Fertility Rate Falls to Record Low, dwkcommentaries.com (April 25, 2024).

[2] Rampell, Americans are having too few kids. The GOP made the problem worse, Wash. Post (May 1, 2024).

U.S. and Cuba Dispute Existence of Legitimate Cuban Private Business Sector

At a January 18, congressional hearing, U.S. Rep. María Elvira Salazar (Rep., FL), who chairs the House Foreign Affairs Subcommittee on Western Hemisphere Affairs, said that claims that a private sector exists on the island were likely “a new scheme from the regime which is desperate for millions of dollars to violate the American market.” Later at that hearing, she voiced some scepticism about such a claim.[1]

The next day, Cuba’s vice minister for the economy, Johana Odriozola, disputed that contention. She said, “Nobody in their right mind can talk about something that really exists being a myth. We are not talking about something small; we are talking about more than 10,000 micro, small, and medium-sized companies.”

In addition, Johana Tablada, currently number two at Cuba’s foreign ministry’s department handling U.S. affairs, also questioned the premise of the congressional hearing in a lengthy tirade against U.S. policies toward the island and personal attacks against Salazar. . . . Tablada said the Cuban government would not allow the U.S. government to use the private sector to meddle in Cuba’s internal affairs but said the government is “serious when it says it supports this sector’s development.”

Although the Cuban government has imposed various restrictions on these enterprises, [2]“the private sector, which also comprises self-employed workers and some cooperatives, now employs 35% of all Cuban workers — more than those employed in state-owned companies.”

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[1] Torres, Cuba pushes back against claims in Congress that its private sector is a myth,’ Miami Herald (Jan. 25, 2024); U.S. House Hearing on Cuban Private Enterprise, dwkcommentaries.com (Jan. 20, 2024).

[2] Torres, Resisting reforms, Cuba announces price hikes and new restrictions on the private sector, Miami Herald (Jan. 10, 2024); Torres, As the economy craters, the Cuban government hits private-sector workers with tax hike, Miami Herald (Jan. 18, 2024)

U.S. Increasing Exports to Cuba

In 2022 the U.S. had exports to Cuba of $391,296,000, making the U.S. the sixth largest such exporter.[1]

In the first eleven months of 2023, such exports totaled $297,377,457, which is higher than the $289,143,160 for the same period of 2022.

These exports include many food products: eggs, chicken, pork, black beans, cocoa, decafinated roasted coffee, fresh cheese, rice, waffles, children’s preparations, unfermented juices, ice cream, microwave-safe popcorn, soy sauce, gelatin, and mineral water.

Other such exports are detergents, soap, bidets, toilet paper, towels, equipment scaffolding, electric stoves, an ambulance that cost $78,590, air conditioners, $1,935,107 in used vehicles, $212,938 in trucks, $100,000 in motorcycles, front loaders and air conditioning generators.

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[1] Reyes, Not only does the chicken that Cubans eat come from the US, now so do the eggs, Diario de Cuba (Jan. 11, 2024).

Migrants from All Over Flocking to U.S.

For the fiscal year ending September 30, 2023, arrests at the U.S. Southwest border of migrants from China, India, Mauritania, Senegal, Russia and other distant countries tripled to 214,000. This is a special challenge for the U.S. because deporting them is “time-consuming, expensive and sometimes not possible.” As a result, the U.S. is actively working on obtaining agreements for removal of such immigrants with such countries.[1]

In Mexico an international smuggling ring works with a network of other smugglers handling migrants from Bangladesh, Yemen, Pakistan, Eritrea, India, Uzbekistan, Egypt and India.

For the second year in a row total arrests at the U.S. southern border surpassed two million, almost 90% of whom are from Latin America and the Caribbean.

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[1] Perez, Migrants Are Flocking to the U.S. From All Over the Globe, W.S.J. (Nov. 4, 2023).

100,000+ Cubans Obtain Humanitarian Parole in U.S.

As of the end of September, more than 100,000 Cubans had obtained humanitarian parole in U.S. [1]

In addition, the U.S. has opened a new Safe Mobility Office in Ecuador where Cubans and others may submit U.S. asylum applications. Under the ‘Safe Mobility’ program, eligible refugees and migrants will be considered for refugee and humanitarian admission programs, and other avenues for legal admission to the United States or other countries that may offer these opportunities.” This program is supported by UN Refugee Agency (UNHCR), the International Organization for Migration (IOM) and other relevant partners.

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[1] More than 100,000 Cubans benefit from the humanitarian parole established in the US, Diario de Cuba (Oct. 23, 2023); U.S. Customs & Border Protection, CBP Releases September 2023 Monthly Update Oct. 21, 2023);The US will open an office in Ecuador to process cases of migrants from the region, EFE Agency (Oct. 19, 2023); U.S. State Dep’t, Announcement of Safe Mobility Office in Ecuador (Oct. 19, 2023); General information about the ‘Safe Mobility’ program.

Increased U.S. Food Exports to Cuba

For August 2023, U.S. food and agricultural product exports to Cuba increased 35.8%, which is 17.9% higher than the eighth month of 2022, which placed the Island as the 52nd market of those U.S. exports.[1]

According to Cuban economist Pedro Montreal, the chicken exports, both in value and tons, reached all-time records. Other U.S. food exports were pork, rice, puddings, grapes, coffee, coffee extract, cookies, waffles and wafers, beer, palm oil, hams, pasta, corn chips, yeast, carbonated soft drinks, salt, and sugar.

For the eight months ending in August, according to the Cuba-US Economic and Commercial Council, Cuban purchases in the US totaled 232,487,283 dollars, $35 million more than the $197,037,244 in the same period of 2022.

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[1] Chicken exports from the US to Cuba reach records in August . . . who do they reach?, Diario de Cuba (Oct. 10, 2023).

More Information on Cuban Entrepreneurs

As discussed in a prior post, a group of Cuban entrepreneurs recently attended a conference in Miami, Florida.[1] According to the Miami Herald, this conference provided the following insights into the current status of private enterprise on the island.[2]

“In just two years, . . . the small and medium enterprises have played a significant role in importing food and other basic supplies.” But some of the Cuban visitors are “producing other goods like clothes . . . fruit juice and preserves . . ., lamps . . ., and decorations and furniture . . . . Other enterprises export software and provide services like logistics, transportation, interior design and company-management solutions. And the companies are spread throughout the island, not concentrated just in Havana.” And “many of the companies have diversified.”

These enterprises fact many problems. “A major roadblock: lack of access to the international banking system.” They cannot easily “borrow money to buy supplies, pay workers and expand their businesses.” While the Biden Administration is planning to allow these enterprises to open U.S. bank accounts, “experts believe few U.S. banks will take the risk” because the U.S. still lists Cuba as a state sponsor of terrorism.

Those Cuban enterprises that have bank accounts in other countries face the difficulty of converting the Cuban peso into foreign currencies, especially the U.S. dollar. And the Cuban government recently limited cash withdrawals from Cuban banks and demanded that most transactions take place online.

Cuban enterprises also face difficulties in obtaining capital, credit, technology, expertise, cheaper providers and basic materials like food preservatives and packaging from the U.S. and other countries. They also need help in training employees on new technologies.

These challenges are “particularly acute in the construction field, where it is difficult to retain labor because of the continual mass emigration of Cubans to the U.S. and other countries.” This will be worse in the near future because “most of Cuba’s infrastructure and residential buildings are in bad shape.”

Some enterprises are forced to buy essential supplies from Europe and China, which increases their costs and, therefore, their prices in Cuba.

Of course, these enterprises still face challenges from the omnipresence of the Cuban government regulating what they can do.

On the plus side, the recent gathering in Miami of Cuban enterprises has led to the opening of an office in Florida to support Cuban entrepreneurs visiting the U.S. with work space, car rentals, mail and other business essentials.

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[1] Signs of Increasing Connections Between Cuban Private Enterprise and the U.S., dwkcommentaries.com (Sept. 27, 2023).

[2] Torres, Miami visit gave a rare inside look at Cuba’s fledgling capitalists. Some key takeaways, Miami Herald (Oct. 2, 2023).

Signs of Increasing Connections Between Cuban Private Enterprise and U.S.

As noted in prior posts, Cuba has a small and prospering private business sector in its economy.[1]

The Biden Administration has been indicating that it will adopt regulatory changes that will bolster that entrepreneurial sector by giving Cuban entrepreneurs access to the U.S. banking system. In addition, Cubans could access U.S. internet services (e.g., videoconferencing, e-learning, automated translation, I.T. managing services and cloud-based services). These upcoming changes are prompted by the Administration’s seeing these Cuban businesses as Cuba’s best hope to grow its economy and curb the outflow of its citizens escaping the island’s dire economy. But as of September 27^th no such changes have been officially announced.[2]

On September 25-26, about 70 Cuban entrepreneurs from the island attended an event in Miami that offered advice on how to improve their businesses and navigate the restrictions imposed by the U.S. embargo.[3]

Former congressman Joe Garcia, who helped organize the trip, said, ““The Cuban American community believes that an essential part of a future democratic and prosperous Cuba includes a free enterprise system.” Garcia, who does consulting for some companies doing business with Cuba’s private sector, added that the basic idea behind the trip is to prove that these enterprises are real and not a front for the Cuban government.

The Cuban visitors consists of men and women from various Cuban provinces, some of whom have never been to the United States. They own businesses in several sectors, including transportation, construction, software development, clothes and beauty products and manufacturing. Many said they are looking to cut costs and prices by contacting providers directly so they don’t have to buy from resellers. Others are searching for a market and partnerships to help them scale their operations.

One of the visitors, Zoraida Perez Barrera, has a small but successful women’s and baby clothing business in Santa Clara, a city in central Cuba with 14 employees. She wants to find a U.S. market for her products. “All of us who are Cuban know how rooted we are in our traditions and I make the traditional newborn arrival clothes. In fact, people who live [in Miami] ask us how to buy the baby clothes.”

Some of these relatively new private companies on the island have become major employers and significant importers of food and other essential goods at a time when “the Cuban state is broke,” said Aldo Alvarez, whose own company, Mercatoria, has been importing large quantities of wheat, chicken and cooking oil to sell on the island.

Several of the visiting entrepreneurs said they are particularly encouraged by news reported by the Miami Herald that the Biden administration is readying to announce new regulations allowing Cuban private entrepreneurs to open bank accounts in the United States —something they can’t do now because of the U.S. embargo that would make it easier for them to pay providers abroad.

Also in attendance were two of the largest Miami exporters to Cuba’s private sector: Hugo Cancio, the owner of Katapulk, a marketplace for over a hundred private enterprises, and Ariel Pereda, whose company, Pearl Merchandising & Distribution, first started selling food to Alimport, the Cuban state monopoly, and now is primarily exporting to the private sector.

A keynote address was provided by U.S. healthcare executive and billionaire Mike Fernandez, who said he believes Cuba’s new private businesses are “the beginning of something monumental that will change” Cuba, though there is always the threat that Cuba could “reverse the process” if it finds other ways to resolve its economic crisis.

This gathering also heard from U.S. lawyers and U.S. officials from the Departments of State, Treasury and Commerce, who explained the regulations that allow American companies to export goods to the Cuban private sector. Though the embargo generally prohibits any transactions involving Cuba, the Obama administration eased restrictions on transactions if the final beneficiary is a member of the private sector, not the Cuban government.

A few days earlier Cuba President Miguel Diaz-Canel, who was at the U.N. in New York City, met with approximately 40 representatives of the American private sector, including Hugo Cancio, and told them that the Cuban regime is considering allowing Cuban Americans to invest and own businesses in Cuba. But the President was not prepared to discuss in detail the new regulations the regime needs to pass to allow private companies in Cuba to receive investment and financing from American companies.[4]

Conclusion

Let us hope that the U.S. soon will announce the promised new regulations to enhance Cuban entrepreneurs access to the U.S. banking system and that this sector of the island’s economy will continue to prosper. Of course, the U.S. also should end its embargo of the island and its designation of Cuba as a state sponsor of terrorism, both of which would improve the lives of Cubans on the island while Cuba should end its recent expansion of Russian and Chinese military and espionage activities on the island.

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[1] See, e.g., these posts to dwkcommentaries: U.S. Needs To Improve Relations with Cuba (Aug. 4, 2023);COMMENT: Developments Regarding U.S. Private Exports to Cuba (Aug. 25, 2023);1.5 Million Tourists Tourists Have Visited the Island So Far this Year (Aug. 26, 2023).

[2] Martin & Wilcary, Biden Readies Measures to Support Cuba’s Small Business Owners, Wash. Post (Sept. 18, 2023). Torres, Cuban entrepreneurs to be allowed to open U.S. bank accounts, access internet services, Miami Herald (Sept. 19, 2023).

[3] Torres, In historic meeting, Cuba’s private entrepreneurs look for opportunities in Miami, Miami Herald (Sept. 26, 2023); Almost 70 MSME ‘entrepreneurs’ from Cuba arrive in Miami looking to do business, Diario de Cuba (Sept. 26, 2023).

[4] Diaz-Canel baits Cuban-Americans who want to own businesses on the island, Diario de Cuba (Sept. 23, 2023);Reyes, Diaz-Canel did not make the announcement in the US that businessmen expected, reproaches the anti—embargo lobby, Diario de Cuba (Sept, 25, 2023).

At U.N., Cuban President Says Nothing About Russia and Ukraine While Condemning U.S. Sanctions

On September 19, Cuba’s President, Miguel Díaz-Canel, addressed the U.N. General Assembly. He said, ““For 60 years Cuba has suffered a suffocating economic blockade,” an “inhumane policy” he blamed for the shortages of food and medicines on the island. He also said Cuba was not a national security threat to the U.S, and that the American government lied when it concluded that Cuba sponsors terrorism.[1]

The President, however, did not mention that Cuban authorities have made record purchases of food and agricultural products from the U.S. since 2020.

The President also said nothing about Russia’s war against Ukraine and the issue of Cubans fighting for Russia in that war. Instead, Granma (the official body of the Central Committee of the Communist Party of Cuba) published an article about the U.S. announcing new sanctions against more than 150 companies that trade with Russia “under the pretext of the conflict in Ukraine.”[2]

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[1] Torres, At U.N., Cuba’s leader hammers U.S.’s ‘cruel policies’, but stays silent on Russia, Miami Herald (Sept. 19, 2023); Diaz-Canel attacks the US at the UN while waiting for dollars for his MSMEs, Diario de Cuba (Sept. 19, 2023);[Diaz-Canel Speech at U.N.] It will always be an honor to fight for justice (+Video), Granma (Sept. 19, 2023); Editorial, the global sanctioner attacks those who cooperate with Russia, Granma (Sept. 19, 2023).

[2] US sanctions more than 150 technology companies that trade with Russia, Granma (Sept. 18, 2023).

State Department Secret Memo from 1960 Set Basis for Subsequent U.S. Policies Regarding Cuba

On April 6, 1960, Deputy Assistant Secretary of State for Inter-American Affairs, Lester Mallory, wrote a Secret Memorandum for Roy Richard Rubottom, Jr., who then was Assistant Secretary of State for Western Hemisphere Affairs, titled “The Decline and Fall of Castro.” [1]

This memo first set forth the following facts about Cuba that Mallory thought were established:

“The majority of Cubans support Castro (the lowest estimate I have seen is 50 percent).”
“There is no effective political opposition.”
“Fidel Castro and other members of the Cuban Government espouse or condone communist influence.”
“Communist influence is pervading the Government and the body politic at an amazingly fast rate.”

Therefore, Mallory asserted, “The only foreseeable means of alienating internal support is through disenchantment and disaffection based on economic dissatisfaction and hardship.” (Emphasis added.)

Mallory then said, “If the above are accepted or cannot be successfully countered,, it follows that every possible means should be undertaken promptly to weaken the economic life of Cuba. If such a policy is adopted, it should be the result of a positive decision which would call forth a line of action which, while as adroit and inconspicuous as possible, makes the greatest inroads in denying money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation, and overthrow of government.” (Emphasis added.)

According to U.S. historian Thomas G. Patterson, Mallory became “the official most responsible for defining United States Cuban policy” in the years immediately surrounding the 1959 Cuban revolution.[2]

On February 2, 2022, which was the 60^th anniversary of President John F. Kennedy’s “executive order imposing ‘an embargo on all trade with Cuba,’ the [U.S.] National Security Archive . . .[posted] a collection of previously declassified documents that record the origins, rationale, and early evolution of punitive economic sanctions against Cuba in the aftermath of the Castro-led revolution. The documents show that the initial concept of U.S. economic pressure was to create ‘hardship’ and ‘disenchantment’ among the Cuban populace and to deny ‘money and supplies to Cuba, to decrease monetary and real wages, [and] to bring about hunger, desperation, and the overthrow of [the] government.’ However, a CIA case study of the embargo, written twenty years after its imposition, concluded that the sanctions ‘have not met any of their objectives.’” (Emphasis added.)[3]

Cuba’s Reactions to the Mallory Memorandum[4]

A year after the release of the Mallory Memorandum, Cuba’s Foreign Minister Bruno Rodriguez Parrilla “condemned . . . the validity of [this document] and its repercussions on the economic, commercial and financial blockade imposed by the U.S. on our country on the occasion of the 63rd anniversary of the promulgation of the document. . . [Such] inhuman policy of maximum pressure and economic asphyxiation ignores the universal clamor for a better Cuba without a blockade. “The Foreign Minister added, “the U.S. government applies the script of the Mallory Memorandum, enacted 63 years ago,” but fails in its “attempt to subjugate a sovereign nation, a bastion of dignity and creative resistance.”

Conclusion

Although this blogger has done a lot of independent research and writing of blog posts about U.S.-Cuba relations, including criticism of many U.S. policies regarding the island, he had never heard of Mallory or this long-held secret document until now and is surprised that the first official Cuban comment regarding the Mallory memorandum that he has found occurred a year after its secret status was rescinded.

Comments from readers of this blog with insights on these issues would be appreciated.

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[1] State Department , Memorandum, “The Decline and Fall of Castro, SECRET, April 6, 1960; State Department Office of the Historian , Roy Richard Rubottom Jr.,

[2] R. Richard Rubottom, Who Helped Shape Cuban Policy, Dies at 98, N.Y. Times ( Dec. 19, 2010).

[3] National Security Archive, Cuba Embargoes: U.S. Trade Sanctions Turn Sixty (Feb. 2, 2022). This release included “A Brief Chronological History of the U.S. Embargo Against Cuba” that started with the Mallory Memorandum. The author of this “History” was William M. LeoGrande, a noted scholar of U.S. -Cuba relations.

[4] Cuban Foreign Minister condemns the validity of the Mallory Memorandum and its repercussions on U.S. policy toward Cuba, Granma (Apr. 20, 2023)