Cuba’s New Resolve: CDA Releases Report on Cuba’s Economic Reforms

This week, the Center for Democracy in the Americas (CDA) released a comprehensive study on Cuba’s economic reforms titled Cuba’s New Resolve: Economic Reform and its Implications for U.S. Policy, in which we report on the extraordinary steps being taken by Cuba’s government to address its economic crisis and offer a realistic assessment of its prospects for success.

The report makes two central findings:

  • First, what Cuba is doing to update its model is real, irreversible, evolving, and providing new opportunities for Cubans to lead more prosperous and independent lives.
  • Second, it’s time for President Obama and other skeptical U.S. policy makers to accept that these reforms – Cuba’s biggest economic changes in decades – are significant, consistent with the goals of our policy, and merit U.S. support.

Publication of the report by CDA follows a series of fact-finding trips to Cuba; consultations with Cuban officials, experts, and economists; interviews with Cuban citizens in Havana and outlying provinces; additional research and a survey of scholarship by others.

Our report tells the story of fifty years of Cuban economic history; it describes in detail the institutional and economic changes taking place now under President Raúl Castro; it identifies what has already been accomplished and what still needs to be addressed, and concludes with constructive ideas for U.S. policy moving forward.

The report, just released on Tuesday, is already starting debate that we hope will continue.

In his blog on the Cuban Economy, Dr. Archibald Ritter, a distinguished expert on Cuba’s economy, called our report “another well-balanced and eloquent call for a change in the failed US approach towards Cuba, a failure that has endured for a half-century.” Donna Brazile, CNN’s political analyst, called it a “great report on the economic reforms unfolding in Cuba.”

It also received coverage in the Latin American Herald Tribune, TV and Radio Martí, the Havana Note, and the Spanish news agency EFE.

Not everyone liked our findings, to be sure. Capitol Hill Cubans, which fights reform of U.S. policy toward Cuba, devoted this posting to criticizing our findings.

Jaime Suchliki, director of the Institute for Cuban and Cuban-American studies, criticized our recommendations in an interview with TV Martí, saying “it will give it (Cuba’s government) more dollars, it won’t produce real changes,” and said that economic reforms would keep Cuba as “a poor little island, catering to tourists and working with tourists.”

Other leaders of the embargo industry – the individuals and institutions who have vested philosophical and economic interests in the status quo – are hard at work fiercely rejecting the notion that changes in Cuba are taking place.

For example, José R. Cárdenas, who served in several foreign policy positions during the George W. Bush administration, in this essay titled “Cuba’s smoke-and-mirror reforms,” denies that the decision to legalize the sale and purchase of real estate “will change in any way the regime’s suffocating control of the Cuban population.”

This picture – of Cuba reforming its economy and giving its citizens more choices, not because of U.S. pressure but because of forces and ideas from inside Cuba – is upsetting to the embargo industry. It is inconsistent with the narrative that underlies U.S. sanctions, so they are simply left in denial and saying “what is happening simply isn’t so.”

These and other critics would have us forget a Cuban named Yusi, who said to The Observer (UK) about housing reforms this week, “I’m not sure I like Raúl Castro, but maybe I like what he is doing.” Or Margot, who told Reuters, “It’s an opportunity and you have to take risks to get something better.” And Phil Peters, the long-time analyst of the Cuban economy, who said, “Overnight, this represents a creation of wealth for thousands of Cuban families.”

This process is far from over. But we believe Cuba has embarked on real, significant, and irreversible reforms and the U.S. ought to be supporting them.

The report is available for download here. We encourage you to read it and reach your own conclusions.

We wish our U.S. based readers a happy Veterans Day.

This week in Cuba news …


Embargo Supporters in Congress sponsor bills to discourage drilling in Cuban waters

Rep. David Rivera (FL-25) has introduced the Foreign Oil Spill Liability Act, H.R. 3393, with Representatives Ileana Ros-Lehtinen, Mario Díaz-Balart, and Albio Sires to slow Cuba’s plans to drill for oil off its northern coast, The Hill reports. The legislation aims to make foreign drilling operations completely liable for oil spills affecting the U.S.

Under current law, clean-up is paid for by the Oil Spill Liability Trust Fund, made up of oil and pollution taxes, earned interest, and heavy penalties paid by companies responsible for a spill. The bill targets Cuba, as spills originating in countries included on the State Department’s list of State Sponsors of Terror would invoke tripled liability and penalties were it to become law.

Senators Robert Menendez (NJ), Marco Rubio (FL) and Bill Nelson (FL) also introduced a bill to correct what they called “ambiguities” in the law that could allow companies responsible for foreign oil spills affecting the U.S. to be exempt from paying damages under the U.S. Oil Pollution Act, The Hill reports.

The proposed legislation would remove the existing $75 million liability cap for spills and allow U.S. claimants to sue a foreign oil company directly. Menendez made it clear that the bill directly targets Cuba’s offshore drilling ventures, stating: “Hopefully, companies seeking to drill in Cuban waters will think twice once they know they would be fully liable for any damages to the Florida Keys, South Florida beaches, or if the spill reached the Gulf Stream, anywhere up the East Coast.”

Over the past year, CDA, along with industry and policy experts and environmental advocates, have recommended that the U.S. engage directly with Cuba on drilling in order to prevent or mitigate damage from any potential spill. Our report published earlier this year on Cuba’s drilling plans suggests substantial ways that the U.S. and Cuba could work together to ensure the safety of the waters the two nations share in the Gulf of Mexico.

In an editorial this week, The Naples News argues the U.S. government should reach out to Cuba proactively for cooperation between both governments to avoid a crisis caused by an oil spill. It concluded, “The wildlife and economy are too dear to be left to dysfunctional diplomacy.”

Roberta Jacobson confirmation process takes step forward while focusing on Cuba policy

Hearings to confirm Roberta Jacobson as Assistant Secretary of State for Western Hemisphere Affairs took place this week before the Senate Foreign Relations Committee. Jacobson was named by President Obama to replace Arturo Valenzuela who retired from the post earlier this year to return to academia.

At the hearing, questions from Senators Robert Menendez (D-NJ) and Marco Rubio (R-FL), focused almost exclusively on U.S. policy towards Cub. As seen in this video, Senator Rubio questioned Ms. Jacobson extensively about Cuba; specifically about people-to-people travel and the continued imprisonment of Alan Gross. In her prepared testimony, which addressed issues throughout the region, Ms. Jacobson stated:

We have never wavered in our support of the right of people in Cuba to freely determine their own future – rights far too long denied to them. We also continue to seek the unconditional release of American citizen Alan Gross, a dedicated development worker who has been unjustly imprisoned in Cuba for nearly two years.

She later responded to Senator Rubio’s questions about the media reports on the efforts of former Gov. Bill Richardson to secure Mr. Gross’s release by stating that the U.S. had not offered any sort of unilateral concessions. Sen. Rubio initially threatened to block her confirmation over these concerns, the AP reports. After the hearing, he stated that he still hasn’t decided how to vote on Jacobson’s nomination but thought that she handled the hearing well. The confirmation process will continue next week.

A post from Anya Landau French for The Havana Note argues that by ignoring the reform process taking place in Cuba, Sen. Rubio seems out of touch and boxed-in.

Flights between Baltimore and Cuba to begin in March

Following the approval earlier this year of BWI-Marshall International Airport to serve the Cuban market, a travel service provider has announced plans to begin regular flights to the island in March of 2012, the Baltimore Sun reports.

According to William Hauf, president of Island Travel & Tours Ltd., there is significant interest in such flights from Maryland universities and religious groups including Baltimore-based Catholic Relief Services and the Bethesda Jewish Congregation, which regularly perform aid work in Cuba. Hauf added that he expects to receive significant traffic from politicians, government officials and diplomats leaving from Washington, DC.

In a letter to the editor, Martha Maylen Kraak, a Cuban American who immigrated to Baltimore in 1997, wrote:

I was elated to read your article about the new charter flights to Cuba…I don’t share the views of those who lament any thawing of relations between the United States and Cuba. For me, the Cold War is over, the Eastern bloc and the Soviets are gone, and now it’s time to focus on our little island and its wonderful people who have been isolated much too long. That is why as far as I’m concerned the more religious groups, journalists and students who board those charter flights the better.

The flight between Baltimore and Havana, which would cost about $800, would last about three hours and fifteen minutes, and would be scheduled once a week on Wednesdays, according to Hauf.

Judy Gross launches national campaign calling for her husband’s release

Mrs. Judy Gross gave a speech in Denver during which she launched a national campaign calling for the release of her husband, Alan Gross, from prison in Cuba, reports The Jerusalem Post. During her speech at the Jewish Federations of North America’s General Assembly, she called on people to “contact [their] members of Congress and tell them to take action on Alan’s behalf. Tell everyone you know about Alan. Write letters to your newspapers. Let the Cuban government know that the Jewish community wants Alan home.”

In addition, the Interfaith Conference of Metropolitan Washington and the Jewish Community Relations Council of Greater Washington announced in a press release that organizations will hold vigils every Monday in front of the Cuban Interests Section at least through December 3rd, which will mark the two-year anniversary of Gross’ incarceration.


Leopoldo Cintra Frías appointed Minister of Defense

General Leopoldo Cintra Frías, a career military officer and veteran of the Cuban revolution, has been appointed Minister of Defense, Reuters reports. The official announcement appeared in a note in state newspaper Granma this Tuesday. The post of Defense Minister had been vacant since Julio Casas Regueiro, the previous minister, died of a heart attack on September 4th.

Cintra, who is 70 years old, has served as First Vice-Minister of Defense since 2008. The official note also announced that General Álvaro López Miera, 67, would be taking over that vice-ministerial position, while keeping his post as chief of staff of the armed forces.

Pope Benedict XVI announces plans to travel to Cuba in Early 2012

Federico Lombardi, a Vatican spokesman, said this week that Pope Benedcit XVI is planning to visit Cuba and Mexico sometime in the spring of 2012, AFP reports. According to Lombardi:

The nuncios of Mexico and Cuba have been charged in recent days with informing the highest religious and political leaders in the two countries that the pope is examining a concrete project to visit.

Lombardi added that Cuba “wanted to see the pope very much,” and that “The pope’s visit will be a great encouragement, particularly on the 400-year anniversary of the Virgin of Charity,” Cuba’s patron saint.

The last papal visit to Cuba took place in 1998, when John Paul II became the first pope to visit Cuba since the 1959 revolution, meeting with then-president Fidel Castro.


Paris Club proposes resumption of debt settlement talks

The Paris Club, which represents some of Cuba’s wealthiest creditor nations, has invited Cuba’s government to resume talks about settling billions of dollars of outstanding debt, Marc Frank details in a Reuters report.

A source told Reuters that “Cuba was discussed for the first time in many years at the Club’s meeting on October 9 and 10, and it was decided to see if they were interested in talking.” A letter was sent to the Cuban Central Bank, and the source stated that “They have not formally replied, but have expressed some interest through the central bank.”

The Paris Club, according to its annual report, is composed of the creditor governments of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Norway, Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United Stated. It does not issue multilateral loans like the World Bank or IMF. In previous occasions, the U.S. agreed not to participate in negotiations regarding Cuba.

After the fall of the Soviet Union, Cuba defaulted on its debt while reeling from the economic effects of losing its biggest trading partner. Talks with the Paris Club were opened in 1999 and later indefinitely put on hold in 2001.

The Paris Club’s proposal follows Cuba’s stated intentions to address its international debt. The Guidelines passed at this year’s Communist Party Conference include a push to “enhance Cuba’s credibility in its international economic relations by strictly observing all the commitments that have been entered into,” and to introduce “flexible restructuring strategies for debt payment.”

Brazil to aid Cuba in program to increase family and small-scale agriculture

Alfonso Florence, Brazil’s Minister of Agricultural Development, traveled to Cuba this week to sign a cooperation agreement to implement a program promoting small-scale agricultural production, the AP reports. Brazil’s aid will focus on improving the infrastructure and mechanization of Cuba’s small agricultural producers through technical support, the transfer of relevant technology, and financial aid for Cuba to purchase Brazilian-made equipment.

This agreement is part of a program, titled Mas Alimentos, that helped 4.8 farmers out of extreme poverty in that nation, according to Brazil’s government. The program was then exported to Africa, but this marks the first agreement to implement the program in another Latin American country.

Silvio da Silva Costa, the Brazilian Ministry of Agricultural Development’s Coordinator of International Cooperation, stated:

Cuba’s government asked Brazil to enter into the program. There is a greater expectancy for Cuba, because the government recently placed family agriculture in the center of the national strategy for food security.

Cuba currently imports approximately 80% of the food consumed on the island. The program seeks to improve self sufficiency in food production.

Around the Region

Breaking news: As we prepared to hit send, we received the disturbing news from Mexico that Francisco Blake Mora, Minister of the Interior and “the most powerful official in the country after the president,” has been killed in a helicopter crash.

Confirmation hearings for U.S. ambassador to El Salvador are underway

Mari Carmen Aponte, who has served as U.S. Ambassador in San Salvador through an extended recess appointment from President Obama, began the process of confirmation for her position in hearings this week before the Senate Foreign Relations Committee, reports EFE.

Aponte must relinquish the post if she is not confirmed by December 31, 2011, when her appointment expires.

Senator Robert Menendez of New Jersey, who chairs the Foreign Relations Subcommittee on Western Hemisphere, Peace Corps and Narcotics Affairs, defended Aponte’s work and stated that there was no reason to block her confirmation, La Prensa Gráfica reports.

Senator Jim DeMint of South Carolina expressed his intention to oppose Aponte’s confirmation, based on an editorial she wrote in defense of LGBT rights, entitled “For the elimination of prejudices, wherever they exist.” DeMint claimed that Aponte had promoted a “homosexual lifestyle,” representing an attempt to impose a “pro-gay agenda” on El Salvador.

Perhaps the most unusual defense of the nomination came from Félix Rodríguez – a former CIA agent, Bay of Pigs veteran, and key actor in the Iran-Contra affair – who wrote in an op-ed column published by the Miami Herald, “She is undoubtedly someone I could support unwaveringly, which is what I have decided to do.”

Wilson Ramos of the Washington Nationals Kidnapped in Venezuela

Wilson Ramos, catcher for the Washington Nationals baseball team, was kidnapped in his home town of Valencia, Venezuela, by armed men who took him away in a stolen SUV on Wednesday.

A USA Today blog reports that authorities were given physical descriptions of the abductors, and that Ramos’s family has not been contacted by them, but that Venezuelan authorities were confident that they can find the player quickly.

Ramos, 24, had a successful rookie season in Washington and was playing winter league baseball for Aragua Tigers. According to CBS News, fans and players observed a minute of silence on Thursday in support of Ramos, with some holding signs urging his freedom.

Bolivia and the U.S. restore diplomatic relations

Bolivia and the U.S. signed an agreement in Washington this week restoring full diplomatic ties and pledging to work together to fight drug trafficking, the BBC reports. Bolivia’s Foreign Ministry stated that this agreement will see “the swift return of ambassadors to Washington and La Paz.”

Bolivia’s President Evo Morales expelled U.S. ambassador Philip Goldberg in 2008, accusing him of supporting a pro-secession movement in the country’s resource-rich lowlands. The U.S. sent back Bolivia’s ambassador in response. Two months later, President Morales ordered the departure of U.S. Drug Enforcement Agency (DEA) agents, claiming they were conspiring against the government.

President Morales has specified that despite the return of diplomatic relations, U.S. DEA agents are still not welcome in Bolivia, citing their exclusion as an issue of “dignity and sovereignty,” the BBC reports.

Recommended Reading

In Cuba: A Home of One’s Own, Sarah Stephens, The Huffington Post

“Effective November 10, Cubans will have the right to buy and sell their homes at prices they set. While the government will collect a modest 4 percent tax at both ends of the transaction, this economic reform will have ripple effects for Cuban families and the Cuban economy that are far-reaching, irreversible, and real.”

Cuba Takes Lead Role in Haiti’s Cholera Fight, Randal C. Archibald, The New York Times

“As the [cholera] epidemic continues, the Cuban medical mission that played an important role in detecting it presses on in Haiti, winning accolades from donors and diplomats for staying on the front lines and undertaking a broader effort to remake this country’s shattered health care system.”

Space of Detention: The Making of a Transnational Gang Crisis between Los Angeles and San Salvador, Elana Zilberg, Duke University Press 

Space of Detention is a powerful ethnographic account and spatial analysis of the ‘transnational gang crisis’ between the United States and El Salvador. Elana Zilberg seeks to understand how this phenomenon became an issue of central concern for national and regional security, and how La Mara Salvatrucha, a gang founded by Salvadoran immigrants in Los Angeles, came to symbolize the ‘gang crime–terrorism continuum.’”

Recommended Viewing

La Libreta, Escuela Internacional de Cine and TV San Antonio de los Baños Cuba

This documentary, in Spanish with English subtitles, includes interviews with everyday Cubans about the importance of the libreta, or ration card, and what its gradual phasing out means to the people who use it.

Recommended Event

The Brookings Institution will host an event on Friday November 18 to release the latest publication by Senior Fellow Richard Feinberg, titled Reaching Out: Cuba’s New Economy and the International Response. Dr. Feinberg, a scholar with decades of experience in international economics and Latin America policy, will be followed by Carlos Alzugaray Treto, professor of international affairs at the University of Havana, and Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, who will provide commentary. The event will be moderated by Ted Piccone, Senior Fellow and Deputy Director of Foreign Policy at Brookings.

For more information or to RSVP for the event, click here.

One Response to Cuba’s New Resolve: CDA Releases Report on Cuba’s Economic Reforms

  1. […] Paris Club proposed the resumption of talks with Cuba in 2011, following Cuba’s stated intentions to address its international debt. The Guidelines passed at […]

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