The World Policy Institute’s Cuban Reset blog is a new, weekly online column that aims to capture the restoration of U.S.-Cuban diplomacy as it unfolds, and to assess its broader consequences in regional and international perspective. For the inaugural entry of Cuban Reset, Lawrence Gutman outlines the challenges that lie ahead of Washington and Havana as they continue to reconcile their differences.
By Lawrence Gutman
The renewal of U.S.-Cuban relations marks a transformative moment in Western Hemispheric affairs. Economic contraction in Cuba, declining support for the U.S. trade embargo, and calls by global leaders to bring bilateral hostilities to a close are driving a historic diplomatic reset and the prospect of normalized trade. Since the announcement of U.S.-Cuban diplomacy on December 17, 2014, Washington has relaxed travel and financial restrictions, quadrupled remittance levels, and lifted Cuba’s status as a terrorism sponsor.
Havana has freed political prisoners, welcomed congressional and trade delegations, and accelerated economic reforms initiated by Raúl Castro. Discussions over the opening of embassies are currently underway. Pope Francis, who helped set the negotiating table in 2013, will visit both countries this September to advocate for reconciliation. Through a remarkable set of circumstances and pressures, Cuba and the U.S. are poised to conclude decades of confrontation and emerge among the most integrated countries in the Americas.
A wave of giddy anticipation is cresting on the northern side of the Florida Straits. Since the announcement of bilateral talks, U.S. visits to the island have increased by almost 40 percent. The 2015 Havana Biennial is enjoying record crowds from the U.S., and North Americans are exploring post-revolutionary Cuba in greater numbers than ever before. Trade delegations are arriving on the island on an almost weekly basis and engaging directly with state officials. A majority of Cuban-Americans now support diplomacy and the repeal of the embargo (though the community continues to elect pro-embargo officials). Netflix, Airbnb, and the telecom firm IDT International have already established businesses on the island. North American firms prohibited from doing so are currently devising strategies to compete in Cuban housing, construction, telecom, and technology markets, among others, that will open to them in several years or sooner.
Excitement in Cuba is palpable as well. According to the recent National Survey of Cubans Living in Cuba conducted by Bendixen & Amandi International for Univision Noticias/Fusion, trade with the U.S. is widely viewed as a means to individual and national enrichment. Fewer than 20 percent of Cubans are satisfied with state socialism, and 95 percent believe normalized relations and tourism will benefit their country. Decades of Cuban participation in illegal, under-the-table transactions have forged a deeply entrepreneurial culture. Indeed, 70 percent of Cubans hope to run their own businesses.
Concern that growth in tourism and stagnation in other sectors will yield structural deformities has been muted thus far (though Cuban officials are pushing diversification through incentives for foreign capital). Fewer than 25 percent of Cubans fear that members of the exile community will attempt to reclaim expropriated properties. Cuban cultural and academic institutions are working with counterparts in the U.S. to establish formal affiliations and exchange programs. Excitement over the prospect of domestic political reform is not significant, though there have been some modestly encouraging signs in the form of dissident participation in local elections.
These are historic developments, and they point to a new era in Cuba’s relationship with the U.S. Yet December 17, 2014 is not the first day of Cuban history, and the country’s fraught relationship with its northern neighbor is not its only relationship. (Nor is it one that can simply be resolved through tourism, trade deals and diplomacy). U.S.-Cuban ties during the past half-century were as noxious as any bilateral relationship during the Cold War in large measure because their underlying conflicts reached beyond the U.S. and Cuba. Indeed, the tensions of the past sixty years – war and exile, revolution and counter-revolution, imperialism and nationalism, and families divided – contain the passions that drove the Cold War in the Americas and beyond.
Cold War passions aside, tourism, trade deals, and diplomacy are the current focus in the U.S. and the wider world is taking notice. President Barack Obama’s push for détente is already improving the reputation of the U.S. in Latin America. It is also compelling Cuba’s current and aspiring partners in the Americas, Europe, and Asia to reevaluate their investments and regional trade agreements. In May, a consortium of 32 British firms announced a $400 million investment in Cuban tourism and trade. President François Hollande led a delegation of French officials and investors to Havana shortly thereafter. Chinese investors are expanding their interests in mining and oil production.
Havana recently granted approval to six foreign companies, as yet unnamed, to begin operations in the Brazilian-funded Mariel Special Development Zone (ZEDM). Thus far, the Cuban government has received over 300 applications to invest in the ZEDM from firms around the globe. The Development Bank of Latin America hopes to begin lending to Cuba in the near term (while the Inter-American Development Bank waits for Cuba to join the Organization of American States). With the U.S. trade embargo still on the books and most U.S. investors still on the sidelines, foreign investors are setting their sights on Cuba as never before in the country’s modern history.
Cuba’s relationships with non-U.S. actors have been the focus of foreign and economic policymaking since the early years of 1959 Revolution. Indeed, the country’s current diplomatic and economic ties are the result of a complex history of engagement before, during, and after the Cold War that shaped and will continue to shape its place in the world. It is a history that includes the Soviet alliance from 1961 to 1991, military and/or political interventions in the Caribbean, South America, Central America, and Africa during the 1960s, ‘70s, and ‘80s, and reinvigorated economic and diplomatic ties with Venezuela, Brazil, China, and Western Europe after the Soviet Union’s collapse. These relationships have been crucial to Cuban politics, economy, and society during the era of the U.S. embargo. They also enabled the creation of a “shadow” diaspora of Cuban émigrés to Spain, Italy, France, Germany, the U.K., and Scandinavia in the wake of the post-Soviet economic crisis of the 1990s. They will no doubt continue to play a defining role in Cuba’s future.
As Cuba and the U.S. continue to reset their relationship, Cuba’s non-U.S. partners will be the focus of Beyond the Florida Straits, a series on the Cuban Reset Blog that aims to broaden the World Policy Institute’s coverage of Cuba beyond the U.S.-Cuban corridor. It will place newsworthy developments—many of which, no doubt, will be tied to negotiations between Havana and Washington – in the context of the island’s regional and global connections. The series will engage audiences whose interests are not limited to U.S.-Cuban relations, and will address politics, economics, and society in light of Cuba’s shifting linkages to Latin America, Europe, Africa, and Asia. Beyond the Florida Straits will enhance The Cuban Reset’s innovative coverage, and provide a valuable source of insight on change and continuity in 21st century Cuba.
Lawrence Gutman has conducted research on governance and foreign investment in Cuba as a Fullbright Hays Fellow and Tinker Foundation Fellow. He holds an M.A. in Latin American History from the University of Texas at Austin, and is based in New York. He tweets at @lawrencegutman.
[Photo courtesy of Wikimedia Commons]