On October 19, 1960 President Eisenhower put in place an embargo against Cuba that has lasted to this day. Fifty years later, the Obama administration is enforcing these sanctions in some high profile areas with greater vigor than even the Bush administration.
Now we’re learning that while the United States likes to impose embargos, it doesn’t really like being subject to them. So it’s worth spending a moment considering what happens when the sanctions shoe is on the other foot.
China is in a trade tiff with the United States. China is accused of subsidizing its exports of green technology into our market. Such actions are at variance with its membership in the World Trade Organization, and now the U.S. Trade Representative is investigating the complaints.
China is retaliating against the U.S.T.R.’s scrutiny. Despite its denials, it is beginning to impose what experts are calling an “embargo” on shipments of “rare earths” to the United States and elsewhere. Rare earths – not the 60s-era soul band out of Detroit – are critical materials used to manufacture items as diverse as cellphones, wind turbines, guided missiles and pharmaceuticals.
While rare earths are actually abundant, China monopolizes the mining of them. An embargo of rare earth exports would violate international trade law, and a decision to withhold them internationally would shut down the world economy.
Consequently, China’s rare earth retribution is stirring an extremely uneasy reaction. The Defense Department is studying the national security risks of dependence on China. Congress is considering loan guarantees to jump-start the mining of rare earth here in the U.S.
U.S. Representative Mike Coffman says “The administration needs to join with other countries and have a united front to tell China this is not appropriate.” He calls the embargo, “extremely disturbing” and is urging President Obama to ensure our national security interests are not beholden to the Chinese. Paul Krugman in the New York Times goes a step further calling China “a rogue economic superpower, unwilling to play by the rules.”
Strong stuff, indeed, and not a single U.S. policy maker, expert, or industrialist has called on the Obama administration to capitulate or to give China exactly what it’s asking for despite the risks to our economy posed by its rare earth embargo. They’d be run out of town if they did.
Investigations, hot rhetoric, and government programs to circumvent the effects of an embargo – understandable reactions as China, the third largest economy in the world, tries pushing around the world’s largest economy in an effort to obtain trade concessions from us.
This brings us to Cuba, the world’s 66th-largest economy, subject to a U.S. embargo for five decades; an embargo covering not just rare earth but everything with limited exceptions for food and medicine.
The purpose of the U.S. embargo against Cuba is every bit as clear as China’s rare earth embargo against us; as President Obama restated this week, the goal is to bend Cuba to the will of the United States, until it reforms its economy and political system to our satisfaction. But Cuba, like its neighbor to the North, is unwilling to capitulate and undermine its sovereignty. So, the U.S. embargo continues.
Next week, as it has for the last eighteen years, the U.N. General Assembly will consider a resolution condemning the U.S. embargo against Cuba.
In 2009, 187 countries voted for the resolution. Just three voted against it: Palau, Israel (itself subject to embargos and boycotts since 1948), and the United States, which is now smarting from the shortage of rare earth.
If past is prologue, this year’s resolution will pass the General Assembly overwhelmingly, and the Obama administration – which promised to move beyond unilateralism in foreign policy – will essentially be left again standing alone.
This next U.S. vote to preserve our failed Cuba embargo will send a disturbingly familiar signal to the world community. One can only imagine the message received in Beijing.
Now, on to this week in Cuba news…
During his campaign for the White House, President Obama pledged to reach out to Cuba if Cuba expressed its desire to improve relations with the United States.
Once in office, President Obama eliminated all restrictions on the right of Cuban Americans to visit their families on the island and provide financial support to them. After taking this action on the eve of the Summit of the Americas, Mr. Obama said this.
I think you saw a good faith effort, a show of good faith on the part of the United States that we want to recast our relationship. Now, a relationship that effectively has been frozen for 50 years is not going to thaw overnight. And so having taken the first step, I think it’s very much in our interest to see whether Cuba is also ready to change. We don’t expect them to change overnight. That would be unrealistic. But we do expect Cuba will send signals that they are interested in liberalizing….there are a range of steps that could be taken on the part of the Cuban government that would start to show that they want to move beyond the patterns of the last 50 years.
Cuba, of course, rejects such linkage, but it remains at the core of U.S. policy. Now, Cuba’s government has released dozens of political prisoners, announced the layoffs of 500,000 workers from state payrolls, and put into place a number of reforms so its budding private sector can have a chance to absorb the unemployed. These are big changes, with more in the offing, but the United States has not responded in any meaningful way to them.
As President Obama told a group of Hispanic journalists at the White House this week, “I think that any release of political prisoners, any economic liberalization that takes place in Cuba is positive, positive for Cuban people, but we’ve not yet seen the full results of those promises,” said President Obama, according to AFP.
This is a far cry from the position on reforming Cuba policy that he articulated last year, and an apparent message that changes in travel rules – broadly signaled by his administration earlier this year – may not be coming after the election as many of us have anticipated. That would be, we suppose, unrealistic.
Anya Landau French of the New America Foundation also wrote on this subject for Foreign Policy.
Eleven members of the U.S. House of Representatives have written President Obama expressing support for changes to travel restrictions and urging him to modify regulations regarding agricultural trade with Cuba, reports the National Association of Wheat Growers. The signers stated that U.S. restrictions on trade with Cuba merely punish U.S. farmers, and that Cuba could be an important market for U.S. agricultural products.
According to news accounts, Assistant Secretary of State Arturo Valenzuela and Cuba’s Foreign Minister Bruno Rodríguez met in New York City on September 24 and discussed the case of jailed U.S. contractor Alan Gross.
A senior State Department official described the meeting between Valenzuela and Rodríguez as “brief and cordial.” The meeting is thought to be among the highest-level diplomatic encounters between the United States and Cuba since Barack Obama became president in 2009. Gross, who worked for a USAID-funded contractor and entered Cuba several times on a tourist visa to provide hi-tech communication devices to Cubans, has not been officially charged. However, several Cuban officials have alleged that he was involved in U.S. intelligence activities against Cuba, reports the Miami Herald.
This week, five Cuban migrants, who were intercepted by the Coast Guard approximately nine miles off the coast of Florida, were repatriated to Bahía de Cabañas, while a sixth was repatriated to the U.S. naval base at Guantánamo Bay for further processing, reports CBS. The Coast Guard Cutter Chandeleur responded to a report that several Cubans were aboard a “rustic vessel” heading for the Florida coast.
Patricia Arenas is in the U.S. this week to receive the prestigious 2010 Outstanding Global Work Award from the Organization Development (OD) Network. The OD Network is an “international professional association of 4000 members committed to advancing the theory and practice of organizational development,” according to a press release about Arenas’ visit.
When referred to as a revolutionary, Arenas responds by stating: “If it’s revolutionary to use my skills to help clean up the planet, create better work environments or help a group of activists put an end to homophobia, then I’m happy to be called a revolutionary. … My clients and I work from the grassroots inside businesses and community organizations and all the way up to the highest levels of the government to address issues like eradicating machismo and homophobia, expanding social enterprise, and changing our mindsets that are still influenced by centuries of colonial domination. Without the government, systemic change doesn’t happen. Without the grassroots, culture change doesn’t happen. Both are needed for real change or real revolution.”
The New York Times reports that dancers from the City Ballet will perform at the International Ballet Festival in Havana next month at the Teatro Mella. City Ballet is sending eight performers: Jared Angle, Tyler Angle, Megan Fairchild, Joaquín De Luz, Abi Stafford, Tiler Peck, Tess Reichlen and Andrew Veyette. The American Ballet Theater is also performing at the festival.
Long-distance swimmer Diana Nyad has announced that she will postpone her attempted swim from Cuba to Key West after months of grueling training. Though she had originally planned to make the swim as early as July of this year, her plans were “set back by delays in getting required government paperwork completed, and then by unfavorable weather and water conditions in the shark-infested Straits of Florida,” according to Reuters. Nyad has now rescheduled the swim for next summer.
Cuba’s Catholic Church announced late this week that five additional prisoners have been offered freedom by the Cuban government, according to the Associated Press. The five, four men and one woman, convicted of crimes such as “hijacking and terrorism,” have all agreed to leave for Spain. None were part of the original deal struck between the Catholic Church and the Cuban government to release 52 political prisoners originally arrested in 2003. While 39 of the 52 from the original agreement have been released thus far, the new releases bring to eight the total of additional prisoners granted release by Cuba’s government. A list of the whereabouts of the 75 dissidents arrested in 2003 can be found here.
The European Parliament has awarded Guillermo Fariñas the Sakharov Prize, a top human rights award. “Fariñas was ready to sacrifice and risk his own health and life as a means of pressure to achieve change in Cuba,” European Parliament president Jerzy Buzek told the assembly in announcing the award. According to Reuters, Fariñas ended his 135-day hunger strike when Cuba announced that it would begin releasing political prisoners.
State ministries and the Cuban central bank, as part of ongoing economic reforms, will no longer micromanage company managers to the extent they have in the past, this according to a recent article in state newspaper Granma. “Until recently, company managers were required to apply for permission even for small amounts of hard-currency spending; no state company was allowed to directly seek loans. Now, with government being short on hard currency, company executives are supposed to self-manage their budgets and generate revenues by seeking commercial loans, substituting imported supplies with domestic products, and boosting exports,” said Edismar Saavedra, Deputy Minister of Steel and Mechanical Industries. The article concluded that separating state and entrepreneurial functions is “becoming key to the transformations, in an effort to increase efficiency and making the operations of numerous factories profitable.”
With all the changes to Cuba’s economy, an NPR piece indicates that many Cubans are worried about the announcement that the government will do away with the ration book. Under the ration system, food prices are very low, and the government provides milk to pregnant women and to children up to the age of seven. However, many Cubans have complained that although the rationing system prevents people from starving, the rations are not enough to last families through the month. Cubans may be frustrated with the rationing system, but at the very least, it provides them with stability. This may all change, however, with the new economic reforms that the Cuban government has announced that it will implement.
The average yearly salary in Cuba has risen to $24 US, reports Café Fuerte. Salaries in moneda nacional have risen from 284 pesos cubanos in 2004 to approximately 429 in 2009, which is equivalent to $24. President Raúl Castro had declared that state salaries in Cuba were insufficient to last families through the month. The provinces with the highest increase in salaries were Ciego de Ávila and Matanzas, where there are several important tourist complexes.
As the Cuban government begins implementing changes to its economy, including 500,000 layoffs within state jobs and an opening up of private enterprise, Cuban state-run newspaper Granma published an article this week explaining changes the taxation system for those who are self-employed.
All taxes will be paid in moneda nacional (approximately 25 pesos to $1 US) regardless of whether a self-employed Cuban is paid in moneda nacional or in CUC (1 CUC is approximately equal to $1 US). Those who are self-employed must contribute to social security, and they must have appropriate documentation from the state. The article provides information about tax levels for self-employed Cubans based on yearly income. The article also provides a glossary of terms to help Cubans understand the new taxation system that will soon be implemented. Details about the changes can be read in English here.
Following a decrease in sales due to the global recession, Havana Club hopes to sell 3.6 million cases of rum during 2010, according to Miami Herald. While sales fell by 3% in 2009, they have begun to rebound in the world market. Havana Club executives have stated that they hope to sell their product in the U.S. market, which is the largest in the world, but that currently they are unable to do so due to the confines of U.S. economic sanctions against Cuba.
According to EFE, Cuba has welcomed 2 million tourists thus far in 2010. The sector is currently on its way to a 3% increase over 2009, according to reports by the Tourism Ministry. This is the seventh straight year that at least 2 million tourists have visited Cuba. Canada remains the primary source of foreign visitors, followed by Britain, Italy, Spain, Germany, France, Mexico, Argentina, and Russia.
Radio Havana Cuba has announced that Cuba has met virtually all of the millennium development objectives laid out by the UN despite the U.S. embargo. Cuban officials point to the Cuban Revolution’s initiatives as having helped to meet these goals. In addition to meeting its own goals, Cuba has also helped other countries to meet these UN objectives. UN Secretary General Ban Ki-moon lauded Cuba for its tremendous progress in the face of economic and political pressure from the United States.
CUBA’S FOREIGN RELATIONS
In its annual report to the United Nations about the effects of U.S. sanctions on the Cuban economy, the Cuban government reported that the Belgium-based Society for Worldwide Interbank Financial Telecommunications SCRL (SWIFT) informed the Banco Central de Cuba that a new version of the software that participating banks must use will not be available to Cuba because it contains U.S. technology and components subject to sanctions under U.S. laws, reports Cuba News Headlines. This change will take effect March 31, 2012, according to the Cuban government’s report to the United Nations.
Meanwhile, Lloyds TSB has blocked a bank transfer from Cuba to a British business that supplies agricultural consultancy services, reports The Telegraph. Lloyds TSB has stated that the bank has reviewed its approach toward countries subject to government and international sanctions “in order to best protect its customers, its businesses, its people, and its reputation.” While the United Kingdom does not have sanctions against Cuba, the importance of the U.S. market has seen British companies and banks “fall into line.”
Lloyds TSB has felt the weight of U.S. sanctions before: the bank was fined in August for allegedly breaking U.S. sanctions through business dealings with people linked to Cuba, among other countries.
Miguel Ángel Moratinos, Spain’s Minister for Foreign Affairs, has left the cabinet. Moratinos’ departure has come as a big surprise in light of the close relationship between Moratinos and Spanish Prime Minister Zapatero, reported Diario de Sevilla.
Moratinos was a key player in the negotiation of prisoner releases in Cuba in recent months, and has maintained a dialogue with Cuba throughout his term as Foreign Minister. He also opposed the EU’s Common Position toward Cuba which calls for Cuba to make advances in the fields of human rights and economic reforms in order to maintain ties with the EU. While it is still unknown exactly why Moratinos was dismissed from his post, it is thought that one possibility is that his policies on Venezuela and Cuba were not to the liking of the U.S. government.
The new Spanish Foreign Minister, Trinidad Jiménez, will focus on Spain’s relations with Venezuela and Cuba, reports El Universal. Like her predecessor, Jiménez is open to dialogue with Cuba and Venezuela, and takes a softer approach to diplomacy.
Meanwhile, an article in Venezuela’s El Universal reports that the European Union expects to maintain its Common Position toward Cuba. However, the EU is reportedly looking to make overtures to Cuba in order to help the Caribbean island with its reforms. The EU is currently divided on lifting the Common Position, with Spain, France, Italy, and Ireland seemingly in favor of changing the Common Position, while Germany, the Czech Republic, and Slovakia favor a continuation of the Common Position. Despite Spanish opposition to the Common Policy, the departure of Moratinos may affect any change to the position. According to Ansalatina, it seems “very improbable” that the EU will modify its Common Policy toward Cuba.
Around the Region:
A letter sponsored by Congressman Sam Farr sent to the U.S. Secretary of State urges the U.S. government to cut military aid to Honduran Armed Forces and Police, and to refrain from supporting the immediate re-entry of Honduras in the Organization of American States, if the human rights situation is not improved. The letter was covered in the Honduras media, while the human rights situation continued to deteriorate.
The White House partially rejected the content of the letter, although it recognized that “there have been incidents where activists have been killed, intimidated, jailed, both going back to the previous government and recently.” State Department spokesman Philip J. Crowley said that the Lobo government has made some progress and added that Obama’s government does not condition the return to the OAS based on the progress in human rights, as the letter demands.
The OAS is also preparing a new report about the situation in Honduras. The Secretary General José Miguel Insulza stated that the document will help further discussions for a possible agreement among the OAS countries so Honduras can come back to the organization. This document could include “guarantees” for President Zelaya.
A new report on the Ecuador coup has been published by the Washington Office on Latin America. The piece recounts “how events unfolded, describes the starkly different interpretations being offered by the government and its political opponents, and offers a thoughtful response to both portrayals.”
President Barack Obama said he had no objection to Venezuela developing nuclear power for civilian energy purposes, days after Caracas and Moscow signed a landmark deal. “We have no incentive nor interest in increasing friction between Venezuela and the U.S., but we do think Venezuela needs to act responsibly,” Obama told Spanish media at the White House.
This week the U.S. embargo on Cuba saw its fiftieth anniversary, reports the Cuban Daily News, an occasion for commentary, across time zones and ideological borders.
One United Kingdom paper, The Guardian, called the decades-old embargo “nonsensical, counterproductive, and downright hypocritical.”
A new piece posted by the Cato Institute points out that while the U.S. embargo on Cuba is not the cause of Cuba’s deteriorating economic and social conditions it has certainly not helped the situation. The piece states that the embargo has also failed in its objectives of regime change and altering Cuban policies.
John Stossel, in an article written for Fox Business News, argued that the U.S. embargo against Cuba has accomplished “nothing good.” He stated that U.S. sanctions against Cuba may have helped Castro and his allies by giving them an excuse for government failures.
RIA Novosti commentator Dmitry Babich points out that in this globalized world in which we live, the U.S. embargo of Cuba demonstrates that countries can survive in near-complete isolation from the main economic “world system.”