If you’re banking on a holiday visit to Cuba, you’d better read this

November 27, 2013

In 2006, the U.S. diplomatic mission in Havana lost its electricity for days on end, interfering with its basic operations.  The U.S. government accused Cuba of bullying and subjecting U.S. diplomats to “the same type of harassment that the Cuban people have had to live with on a daily basis.”

Whether it was retaliation by Cuba for a news ticker the U.S. Interests Section installed – later disconnected by the Obama administration – or caused by the island’s notoriously unruly power grid, the denial of electricity mattered.  A principle was at stake.  Governments don’t mess with other governments’ embassies.  That’s a violation of international law.

Fast forward to 2013 and to Washington, D.C., where the Cuban Interests Section is located.  It’s suffering from a power shortage of a different sort, but the effect is equally pernicious.

Due to the weight of U.S. sanctions and fines against financial institutions here and abroad, no commercial bank is presently willing to provide financial services to the mission, so that the Cuban diplomats can process the visas and travel documents that are required for travel.

This means, as the Miami Herald is reporting, that “Cuban-Americans and Cuban residents of the United States will no longer be able to obtain Cuban passports and U.S. travelers authorized to fly to the island will not be able to obtain visas.”

The Cuban Interests Section said in a statement that it “particularly regrets the effects this may have on Cuban and U.S. citizens (…) with the negative impact on family visits, academic, cultural, educational, scientific, sports and other kind of exchange between Cuba and the United States.”

The cut-off of banking services to the Cuban Interests Section has been brewing for a long time.  M&T Bank informed the Cubans in July of this year that it would no longer provide banking services to foreign missions.

According to the Associated Press, the U.S. State Department said the bank “severed the relationship due to a ‘business decision,’ and that the government does not have the power to interfere or order any bank to handle a foreign mission’s account.”

But it is, kindly put, an illusion to ascribe this simply to a business decision, as if the bank said it would no longer hand out decorative plates to customers who opened a passbook account.

José Pertierra, a Washington-based attorney, agrees.  He told Progreso Weekly, “The problem is not the banks, it’s the government. In this country, banks are a business. The fines imposed on banks that allegedly break the blockade are astronomical and the laws are extra-territorial.”

Since 2009, as Café Fuerte reports, more than $2 billion in fines have been imposed by the Obama administration for violations of the embargo in relation with financial transactions linked to Cuba, double the amount imposed under the Bush administration. No wonder banks are leery of dealing with Cuba’s diplomats.

As enforcement actions have risen, another goal of the administration has been to increase travel by Cuban Americans and other U.S. residents, consistent with its “Reaching out to the Cuban People” strategy.

According to the Miami Herald, its reforms enabled more than half-a-million visitors in 2012: “about 476,000 were Cuban Americans and Cuban residents of the United States” and another “98,000 (who) were registered as members of people-to-people programs” to visit Cuba.

Secretary Kerry said to the OAS in a speech recently, “We are committed to this human interchange, and in the United States we believe that our people are actually our best ambassadors.”

But, the administration must be confused; it cannot be the sheriff on one hand, making it so risky for commercial banks to engage in legal transactions with Cuba that its missions must shut down the issuance of visas and documents required for travel, while trying to prop open the door with its other hand so more family members and other U.S. travelers can visit the island.  It has to choose.

Perhaps the administration is seeing the light.  The Associated Press is now reporting that the State Department “has been actively working with the Interests Section in Washington to identify a new bank to provide services to the Cuban missions…while ensuring the ongoing security of the U.S. financial system through adequate regulatory supervision. We’d like to see the Cuban missions return to their full operating capacity.”

Armand García, president of Marazul Charters, says of Cuban-born travelers and U.S.-born travelers, “all of them need consular processing provided by the Consulate directly or through authorized travel agencies.”  The government needs to get moving, or it could get ugly just in time for the travel rush for the upcoming holidays.

Ten years ago, when President Bush imposed severe restrictions on family travel rights, we ran an advertisement in the El Nuevo Herald under the headline: “One man cancelled Christmas in Cuba, and it wasn’t Fidel Castro….”

The administration had better fix this problem or President Obama, who recently promised to be “creative,” and said “we have to continue to update our policies,” could be that man in 2013.

He needs to encourage State to get the job done and fast.  Honor the treaties.  Find a bank.  Ensure that the financial juice gets turned back on at the Cuban Interests Section as soon as possible.  History need not repeat itself.  And, of course, have a happy Thanksgiving!

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As U.S. Marks Solemn Anniversaries, CDA Releases ‘Regime Change’ Documentary

November 22, 2013

We publish on the day our country remembers the life and death of President John Kennedy. As Secretary  Kerry recently reminded us, we are also days away from the 190th anniversary of the Monroe Doctrine.  On December 3, Alan Gross will begin his fifth year imprisoned in Cuba, for his part in the U.S. government effort to bring about regime change on the island.  In unexpected ways, these solemn anniversaries fit together.

***

Today, the Center for Democracy in the Americas releases a short, two-part, video documentary by Tracey Eaton, an independent journalist, whose film examines the half-century-old U.S. effort to end the Castro government and replace Cuba’s system with one based on the political principles and free market preferences of the United States. We hope you will view and share them, here.

In Part 1, “Diplomacy Derailed,” Eaton explains how concerted efforts to topple Cuba’s government have consistently met with failure.  In one interview, Reinaldo Escobar – blogger, independent journalist, and the husband of blogger Yoani Sánchez – tells him:

“The United States has made huge mistakes in its policy toward Cuba.  The so-called blockade or embargo, the so-called Helms-Burton Act, all have a typically interventionist nature, of a very strong pressure.  The main mistake that the United States has committed regarding Cuba is to stubbornly refuse to recognize the legitimacy of the government of Cuba.  That’s everything.”

In Part 2, “Failure Compounded,” the documentary turns from Cuba’s resistance to attacks on its sovereignty to the constraints placed on USAID’s democracy promotion program in Cuba, which the country outlawed in 1999.   As Peter Kornbluh of the National Security Archive observes:

“The Cuban case has proved – year after year after year – that we are not doing this legitimately and we’re not doing it effectively.  Very little has been accomplished on the ground and, arguably, relations have been poisoned by the continuing effort to basically take a program that is supposed to be above-board and overt and transform it into a surreptitious, semi-covert operation, with people who are really not trained, supervised, and backed to undertake these kinds of operations.”

It is against this backdrop that Alan Gross was arrested in Cuba.

***

As USAID admits, its operations in Cuba are unique compared to how it works elsewhere in the world.  When it ran afoul of authorities in Russia, as the Los Angeles Times reported earlier this year, it packed up its operations and left, however reluctantly, understanding that it could not be effective at promoting democracy if it failed to act with the consent of the host government.  In Cuba, it makes no such concession.

While USAID coaches foreign governments and NGOs on the virtues of transparency, it operates in Cuba in a semi-covert fashion, it withholds and redacts documents requested by reporters like Tracey Eaton and U.S. news agencies, and it dissembled along with the rest of the U.S. government when Mr. Gross was detained in Cuba for his activities there.

From the beginning, as Professor Bill LeoGrande explains, the “U.S. government’s position has been that he did nothing wrong, was imprisoned unjustly, and therefore should be released unconditionally.” It has never admitted that “by setting up wireless digital networks for select groups of Cubans to connect to the Internet by satellite, independently of Cuba’s national Internet connections,” what Alan Gross was doing under a program funded by the Helms-Burton legislation was against Cuban law.

Cuba, of course, knew what Mr. Gross was doing and what USAID continues to do. Recently, when the agency sent grant applications and other internal reports to U.S. diplomats in Havana over an unencrypted line, it was assumed that Cuban intelligence agencies read them all.

Hardliners continue to demand his unconditional release (though it is unclear why Cuba would do this) and label efforts to work a deal with the Cuban government “a travesty.”  U.S. officials and others profess not to know what the Cubans actually want in exchange for his freedom.  For years, the Obama administration’s public position – besides denying he was doing anything wrong – was to say no changes in policy toward Cuba could happen without his release.  Now, even Rep. Joe Garcia from Florida is saying, “He’s an American prisoner, and we should do all we can to obtain his release but we shouldn’t let it guide U.S. foreign policy.”

We hear – from time to time – that efforts are underway to secure Mr. Gross’s release. Maybe something is happening below the radar, but on the surface his case seems deadlocked — as the moribund state of the “Bring Alan Home” website sadly seems to attest.

What might turn things around?

***

Our insistence that Cuba replace its political and economic system as a precondition for the U.S. reconsidering a diplomatic relationship with its government has kept our policy frozen in place, ever since it was conceived during the Cold War by the Kennedy administration.

Paradoxically, in the days before he died, President Kennedy may have been ready to undertake a new approach.  In an article released today, Peter Kornbluh reveals that Kennedy was “actively exploring a rapprochement with Cuba, and working secretly with Castro to set up secret negotiations to improve relations.”  While his “(T)op aides argued that the U.S. should demand that Castro jettison his relations with the Soviets as a pre-condition to any talks… the President overruled them; he instructed his top aides to ‘start thinking along more flexible lines’ in negotiating with Castro.”

We’d like to think that President Obama might think more flexibly too. When he spoke in Miami earlier this month he said, “Keep in mind that when Castro came to power, I was just born. So the notion that the same policies that we put in place in 1961 would somehow still be as effective as they are today in the age of the Internet and Google and world travel doesn’t make sense.”

It would make far greater sense if the administration applied the same principles to Cuba that Secretary Kerry articulated in his “end of the Monroe Doctrine” address, which will guide our relations with the other nations of Latin America. Instead of the U.S. declaring “how and when it will intervene in the affairs of other American states,” Mr. Kerry offered the promise of a new relationship with the region, with “all of our countries viewing one another as equals.”

Bringing our policy toward Cuba into alignment with the same norms we now promise to observe in our relationships with the rest of Latin America offers a range of advantages.  We could build trust with the rest of the region, find a stable and consistent way to engage with Cuba, and speed the day when Mr. Gross is able to come back home.

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This week, 5 Cubans changed the conversation in Washington

November 15, 2013

This week, five small business owners visiting Washington changed the conversation about Cuba to something deeper and far more interesting than what normally takes place when policymakers debate the future of Cuba and U.S. policy by themselves.

Take, for example, Yamina Vicente, who taught economics to college students in Havana and left her post to open Decorazón, a business that provides decorations and hosts parties for Cuban families. Her clients spend as little as $20 and as much as $500 for birthdays, baby showers, weddings, and even the celebration of Halloween.

When she was asked, “What does the ability to run a small business mean to you?”, her answer might have sounded familiar to anyone who has attended a Chamber of Commerce meeting in the United States.

“There are five advantages,” she said.

The first is increased income and financial opportunity.  Her personal situation “has improved a great deal” since she opened Decorazón.  The second is the ability to provide employment to others.  Third, she is able to offer services never before seen in Cuba.  Fourth, she said, “there is no longer a ceiling on what you can achieve.  Your efforts can take you anywhere now.”  Fifth, finally, she said she had regained lost hope, because running a business “combines my passions with what is objectively needed to survive.”

Yamina was joined by Nidialys Acosta and Julio Álvarez, whose fleet of rental cars allow tourists to see Cuba from seats inside restored Chevrolets from the 1950s; Niuris Higueras Martínez, owner of the fashionable Atelier paladar; and by Emilia Fernández, a human resources specialist in the state-run health system.

Julio and Nidialys are earning more running their business than they did as employees of the state.  They are learning more, as well, from foreign tourists who have advised them on everything from the amenities consumers expect (they now supply water and moist towelettes) to the design of their logo and website.  Their business is taking off; with more reservations than they could handle, they expanded payroll and hired more staff, and they are now formalizing a contract approved by Cuba’s Tourism Ministry to provide their rental cars for use by foreign tourists in packages run by Cubanacan, a state enterprise.

To Julio, who once stood outside the Hotel Nacional with his one taxi asking foreign tourists, “Do you need a taxi? Need a taxi? Taxi? Taxi?”, this is welcomed relief.

Emilia Fernandez, whose hospital provides surgery for patients with retinitis pigmentosa and other eye diseases, sees opportunity with the reforms.  Her institution can now access faster, more efficient maintenance and repair of its physical plant and stock its food service with fresher commodities because the state allows it to contract out to businesses run by self-employed workers.  Moreover, she plans to research the health effects of the entrepreneurial economy – for example, stress – and to offer advice to the self-employed on how to maintain their health as they build their businesses.

None of the Cubans declared their country’s private sector reforms had converted Cuba into an “entrepreneur’s paradise.”  As in the U.S., the majority of small businesses in Cuba fail.  They struggle due to lack of consumer demand, an inefficient system of allocating and obtaining credit, limits on their ability to buy wholesale goods, and limits on access to the Internet. These are problems native to Cuba’s system and cannot be fixed from the outside.

By the same token, the changes they are reporting, such as their growth in personal satisfaction, are also rippling through the society at-large in ways with implications for U.S. policy.

Earlier this year, Senator Marco Rubio ripped into visitors to Cuba, reminding them that the country (he has never visited) is not a zoo.  Our Cuban visitors, however, said that tourism was driving the expansion of their businesses and was the source of innovation.  They said Cubans are not only getting better pay, more jobs, and diverse services, but the private sector reforms are forcing the state enterprises to be more efficient and competitive.

After listening to the cuentapropistas tell their stories, Carlos Saladrigas of The Cuba Study Group called the U.S. embargo, put into effect to change Cuba, an obstacle to the changes happening in Cuba.  Lifting restrictions – encouraging more travel, opening the U.S. as an export market for goods created by the new Cuban businesses, allowing more support to flow from the U.S. into Cuba – is the right way to go if we want to support the transformation taking place.

Niuris came to Washington with a promotional video for Atelier. Its theme – antes y después, before and after – records the reconstruction of her restaurant, but it could also be a metaphor for what is happening in Cuba, and a guide for where U.S. policy should go – from the embargo to something different and better for both countries.

As President Obama said in Miami late last week, “Keep in mind that when Castro came to power, I was just born. So the notion that the same policies that we put in place in 1961 would somehow still be as effective as they are today in the age of the Internet and Google and world travel doesn’t make sense.”

After more than a half-century of trying to get Cuba to fail, we should try listening to Cubans who want a chance for themselves and their country to succeed.

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Cuba’s Economic Reforms in the Human Dimension and 3-D

November 8, 2013

Five Cubans will visit Washington next week to talk about how their country’s economy is being transformed, and how their lives are being improved, disrupted or simply affected by the changes underway.

Four run small businesses; a fifth is a state employee.  Only one has ever traveled to the U.S.  All can visit our nation’s capital because Havana ended travel restrictions on Cubans this year, and because Washington gave them visas.  These visitors are:

  • Nidialys, who runs a car rental company, “Nostalgicar,” with her husband Julio.  Together, they have formed a fleet of self-employed drivers with pristine Chevrolets from the 1950s, who provide transportation services to tourists visiting the island.
  • Niuris is the owner of the successful paladar, Atelier, in Havana. The restaurant is run by Niuris and her siblings from their home, a former senator’s mansion.
  • Yamina owns and operates a party decorations company, “Decorazón”.  A mother of two, Yamina creates decorations, like balloon displays, party favors, and table centerpieces, for celebrations ranging from elegant weddings to children’s birthday parties. She also fills the role of event planner, contracting services such as cakes and clowns, for an almost entirely Cuban clientele.
  • Emilia works in human resources at an eye clinic in Havana. Having completed her education in the Soviet Union, Emilia, who previously worked as an accountant and an auditor, speaks Spanish, English, and Russian, and expresses great satisfaction with the opportunities she has received from the Cuban system.

At a forum to be held at George Washington University, and in private meetings with policy makers, they will discuss what the biggest changes in Cuba’s economic model since the dissolution of the Soviet Union mean to them.

What is taking place in Cuba is not change at the margin.  Since late 2010, more than 442,000 Cubans have obtained licenses to work at small businesses and cooperatives in newly-authorized categories of self-employment.  Cubans are leaving the certainty that comes with a state job, state wages, and state benefits, learning the joys and problems that accompany running a business and making more of their own decisions. They are living with the uncertainties that come with rules that evolve and change, as authorities decide how much and how fast to update the model.

The rules do change.  In this space, we wrote last week about decisions in Cuba to end its two currency system and to end the government’s monopoly on public restrooms, and about entrepreneurs who operate video salons and screen 3-D movies.  Just hours after we hit send, Cuba’s government moved to close the theaters, which had not been officially approved.

Our friends at Progreso Weekly quickly posted an analysis written by José Jasán Nieves Cárdenas, a Cuban journalist.  His topline “Yes, it IS an obvious step backward,” was just the beginning of a thoughtful reaction:  the decision will be unpopular in Cuba (especially among young people whose decisions to stay in Cuba are critical to the island’s future), it contradicted earlier government statements, and is likely to be disobeyed.  He might have added that this reversal is a reminder that reform needs to be encouraged; because, among Cuban decision makers, not everyone is a fan of reform.

In contrast, some hardliners responded not in sadness, at the loss of a valuable service for Cubans, but with glee because a “pro-Castro group,” their reference to us, had cited the 3-D theaters as evidence of reform, and their ability to operate had been taken away by Cuba’s government.

Let’s spend some time with that.  Whenever Cuba announces a significant reform, hardliners don’t acknowledge it, they denounce it.  Why?  To maintain U.S. economic sanctions as they currently exist, they feel duty-bound to argue that Cuba isn’t changing. Although, when you think about it, failure is hardly testimony for keeping a policy like the embargo when it doesn’t work.

We saw this when Cuba’s government ended travel restrictions on its people. Hardliners called it a plot. They said Cuba was just getting ready to “dump a new wave of refugees onto U.S. shores.” They continue to argue even today, November 8, that the travel reforms aren’t real.

You see, they operate under what Richard Feinberg calls “the old narrative” – that Fidel and Raúl Castro have to pass from the scene before any real change could occur – otherwise, if the reforms are actually producing more choices, more jobs, and the opportunity to earn more money for the Cuban people, why do we need their embargo?

For the hardliners, the suffering imposed by sanctions is an end unto itself, to be preserved no matter what happens in Cuba.

That’s why the visit by Nidialys, Julio, Niuris, Yamina, and Emilia to Washington is so important. For those of us who cannot see reform in 3-D, they are reform in its human dimension, a reminder that the process that has brought them to this point in Cuba should not be disparaged but encouraged by the United States.

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Notes from the Alternate Universe Known as Reality

November 1, 2013

Sometimes the news about Cuba, U.S. policy, and the region can be as bright as the sum of its parts.  This is what we mean as we put the news of this week together.

President Obama’s travel reforms are working.  When President Obama reopened people-to-people travel opportunities for Americans of non-Cuban descent, he included permission for more U.S. airports to serve the Cuban market.  For the first time since 1962, as Sean Kinney reported this week, “regularly scheduled air travel between Key West and Havana is returning.”  The airline Air MarBrisa, which already is running flights out of Tampa, along with Miami-based Mambi Travel, will provide the service.

This is not entirely a surprise: statistics confirm that visits by U.S. travelers to Cuba are increasing, so demand is strong; polling by the Cuban Research Institute shows that there is broad support among Cuban-Americans in Florida for travel by all Americans to the island; and, the new flights from Key West bringing more travelers will generate economic activity in Florida and Cuba.

Perhaps there is one surprise: Key West’s Representative in the U.S. Congress, Ileana Ros-Lehtinen, who denounced people-to-people travel seven months ago for funding “the machinery of oppression that brutally represses the Cuban people,” said nothing about the opening of Key West flight service to Cuba, but did issue a statement about legislation in Congress reflecting her view that “supporting American jobs should be our top priority.”  The allure of travel may be more powerful than we think.

Cuba is changing – no, really. We reported last week that Cuba’s government is embarking on a process for ending its system of two currencies, initiated to protect the country’s economy from the fluctuations of world markets, but which produced distortions and bedeviled Cuban consumers.  Hardline supporters of U.S. sanctions often dismiss Cuba’s reforms as fake or insubstantial, but experts recognize that ending the two currency system is evidence of real change.

For those who remain skeptical, however, there were two additional developments this week that really ought to give them (all of us) cause to think anew.  As the Associated Press reported this week, thanks to the economic reforms, Cuban entrepreneurs are opening businesses where their countrymen can play video games, don pairs of 3-D glasses, and watch terror films such as “Saw 3D.” That might not float your boat, but as one Cuban told the AP, ”We have some more options these days, at least.”

These backroom video salons are competing with state-owned theaters, and offer another illustration that the reform process is not stalled.  In fact, Cuba also ended its monopoly on public toilets.  As the Miami Herald reported, the government issued a 7-page resolution that builds on a private sector public toilet pilot project started in Havana in 2011 to allow “the rental of state-owned bathrooms to private persons who hold government licenses as “public bathroom attendants” – one of 182 categories of self-employment permitted by the government.”  Truthfully, we don’t know why this was thought of as state monopoly in the first place, but allowing competition with state-owned facilities – as with 3-D movies, barber shops, and the like – demonstrates a further relinquishing of government control.

The U.S. knows how to say thank you — to Cuba! There was good news this week for the family of Kevin Scott Sutay, a former U.S. Marine, who was seized last summer in Colombia by the FARC, the Revolutionary Armed Forces of Colombia.  As USA Today reported, Sutay was released to U.S. government representatives at Bogotá’s airport, examined by a doctor from the International Red Cross, and pronounced fit to travel so that he could be reunited with his family.

But the story does not end there.  Almost immediately, Secretary of State John Kerry released a statement thanking not only the Government of Colombia for its tireless efforts in working for Mr. Sutay’s release, but also recognizing “the contributions of the International Committee of the Red Cross, and the Governments of Norway and Cuba in securing” his freedom.  Unlike previous administrations and previous instances, where Cuba could have been recognized for a positive act but was instead marginalized by silence or hostility, this was a welcome departure from past practices.  As Cuba continues working as a peace-broker between the Government of Colombia and the FARC, ideally at some point we’ll see more of what should otherwise be common courtesy.

One last example of how reality isn’t really so bad:  this week, The Economist published a poll by Latinobarómetro with findings about the mood of Latin American publics toward democratic governance in the region.  The findings included that Ecuador, Nicaragua, and Venezuela have some of the highest public support levels in all of Latin America for the idea and ideals of democracy.  Publics are satisfied with the functioning of democracy in their countries; majorities believe their country is being run for everyone’s benefit; and, region-wide, sixty-nine percent view the U.S. favorably.

We share these results to remind our readers that the Cold Warriors who perennially view the region as if the sky were falling on democracies in Latin America, thanks to the pernicious influence of left-wing governments, simply do not have the facts on their sides. The U.S. can also take some comfort from the fact that even though the resolution condemning the embargo against Cuba won the unanimous support of Latin American governments and carried the UN General Assembly by a landslide margin (188-2), we do have a base of support in the region to build on.  Dismantling the embargo would put an even brighter shine on that reality as well.

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