Trump vs. Trump — is there another way to think about doing business in Cuba?

August 21, 2015

Back in 1996, Pamela Falk gave us a glimpse of Donald Trump’s vision of doing business with Cuba:

“The people of Cuba are the greatest in the world. I’d like to help them rebuild the country and return it to its original splendor. And as soon as the law changes, I am ready to build the Taj Mahal in Havana.”

Just three years later, in his op-ed published by the Miami Herald, Trump swore he’d rather lose millions than lose his self-respect doing business with a country he called “a maximum security prison.”

Was Trump against the embargo before he was for it? Apparently.  But, in assuming polar opposite positions — crusading capitalist at one moment, self-sacrificing human rights advocate the next — he was also ahead of his time.

In 2015, we can wake up and read an urgent summons like “Travel to Cuba Now Before it Becomes a Tourist Trap.”  Or, hear commentators cited in Esther Allen’s essay for the New York Review of Books, “joyfully predicting that the re-inauguration of the U.S. Embassy will unleash an invasion of tourists and business dollars, bringing badly needed capitalism to a place they view as backward and isolated.”

It all boils down, as Ms. Allen says, to the quintessentially American argument that only we in the United States can save Cuba, “or that, by our very presence, we will inevitably destroy all the things that make it appealing to us.”

Thankfully, what is coming next in Cuba is not preordained, it cannot be known, and the choices are not just black or white.  It’s complicated.

But, first let’s be clear:  This cat has scampered out of the bag.  The U.S. policy transition to a post-embargo world is underway, and the forces to make the new policy irreversible are getting stronger.

Years ago, the U.S. business community — with some exceptions — opted out of the debate on ending trade sanctions, leaving farmers and other agriculture interests to fight with Congress and the Bush Administration over their desire to sell food to the Cuban people.  After the December 17th breakthrough, President Obama awakened the slumbering giant.

The President’s travel, trade, and financial reforms set off a race among U.S. corporations to see who among their domestic competitors could make it through the door first and make their case to customers in Cuba’s government.  That race has become all the more urgent, as Forbes explained, with “exporters in Latin America, the EU, Russia and East Asia…descending on Cuba and making deals left and right.”

Business is also more confident. It helps them a lot that people like former Commerce Secretary Carlos Gutierrez, a Cuban American who served in the Bush Administration and worked for tighter sanctions to bring down the Cuban government, are accompanying U.S. businesses on this journey.

The business awakening set off a political awakening in the U.S. Congress among centrists of both parties who now understand that “the embargo is slowing Cuba’s transition to a freer, more open economy,” as Bill LeoGrande wrote recently.  Legislation like the Cuba Trade Act of 2015 — introduced in the House and Senate by Republican and Democratic members working together — reflects their growing realization that the old policy and the humanitarian interests of the Cuban people are simply incompatible.

This does not mean that full-on capitalism is right around the corner.  To anyone expecting that a Trump Tower will soon replace the Russian Federation’s Embassy as the ugliest building in Havana, or that Starbucks and McDonalds are about to mar the Malecón’s milieu, we can only say: neither the U.S. nor Cuba is ready for that to happen.

Our sanctions are still an impediment. Yes, dozens of U.S. firms are hopping planes to come to Cuba.  But, if they operate in sectors outside agriculture, health, or telecommunications they can only explore.  Even if Cuba wants to do business with them, and many will go home empty handed, they cannot do a deal without a license from U.S. Treasury or Commerce making an exception to the embargo. Some will be granted, but ultimately companies that want to move faster will have to turn up the pressure on Congress to end the embargo (we urge them to do so).

Yes, some quick buck artists are flying in and out of Cuba, but many others are companies with long records of doing business in Latin America including joint ventures with state and corporate counterparts.  To strike a meaningful relationship in Cuba that will ultimately produce profits and real gains for both sides will require them to adopt a long time horizon.

There are also structural brakes to prevent foreign investment from spinning out of control in Cuba. In his compelling article, What You Might Not Know about the Cuban Economy, Professor Jorge Dominguez lays out Cuba’s multiple challenges – its demographic problems, limited employment options for Cubans, and more – militating against a sudden shift to Cancun capitalism.

Although he praises Cuba’s “really, really well-educated and cheap workforce, as well as substantial evidence of entrepreneurial potential,” Dominguez says U.S. restrictions on investment and the complicated context facing the island’s political leaders are the biggest barriers to Cuba’s potential to boom.

How complicated?  Michael Bustamante writes in Foreign Affairs about opponents within the Cuban state standing against Google’s offer to install a national mobile WIFI network on the island.  He quotes Second Vice President José Ramón Machado Ventura who said, “There are some people who want to give [the Internet] to us for free…to penetrate us and do ideological work for a new conquest.”

Bustamante points out the irony that revolutionary loyalists in Havana are actually in alignment with “anti-Cuban government holdouts in Miami,” as opponents to closer commercial relations between Cuba and the United States.  Although we suspect that irony will be lost on the fellow whose essay “When Helping ‘the Cuban people’ Means Bankrolling the Castros” graced the pages of the Wall Street Journal in June.

Cuba and the U.S. are two countries with extremely different systems of government that suffer from the same dilemma. No one has designed a political system that can settle these problems without disorder and delay.  The business of reconciling a relationship broken for five decades is really complicated.

Even Trump admits that.  After President Obama announced the breakthrough with Cuba last December, Trump didn’t oppose it. He just said he would’ve gotten a better deal. Read the rest of this entry »

Flag-Raising in Havana — to see and hear something worth remembering

August 14, 2015

“Now comes the hard part,” wrote Fox News Latino.  “Years of work remain to normalize ties,” the Wall Street Journal said.  “Now comes the hard part,” an opinion piece in Politico repeated.

Each of these articles was posted hours before Secretary of State John Kerry landed in Cuba to lead the historic ceremony at the U.S. embassy in Havana today.

At first, reading the headlines, we didn’t know whether to laugh or cry.

With a blizzard of images in our minds — from the missile crisis to the migration crisis, from Pedro Pan to Elián González — it’s hard for us to picture what possibly could have made the last 54 years any harder before we could arrive at the day when we saw the American flag hoisted above the U.S. embassy in Havana.

As much as anyone, we’re all about the work ahead.  We welcome the chance to build on the recent achievements of U.S. and Cuban diplomacy (documented here by Peter Kornbluh and Bill LeoGrande, the New York Times, and the Guardian among others) to give proof to the idea that engagement will improve human lives on both sides of the Florida Strait as isolation never could.

But before we rush into the next battle, let’s first savor at least some of what transpired on this historic day of flag-raising.

In his biography of Lincoln, Carl Sandburg wrote a remarkable description of the crowd that gathered to hear the Lincoln-Douglas debate.  It reads in part: “Twenty thousand people and more sat and stood hearing Lincoln and Douglas speak…With ruddy and wind-bitten faces they were of the earth; they could stand the raw winds when there was something worth hearing and remembering.”

With umbrellas protecting them from a relentless Havana sun, observers inside and outside the U.S. Embassy- the invited guests who were seated, and the thousand or more, the ones with the most at stake, the ones leaning against the sea wall, standing in the intense heat, or leaning in from the benches or concrete steps where they sat — all could see and hear much that was worth remembering.

Some Cubans began to gather as early as 6am, as the Associated Press reported, “I wouldn’t want to miss it,” one said. Cubans adjacent to one of the WIFI hotspots made available following the Obama-Castro agreement could follow what was happening inside the embassy grounds on their phones.

As the ceremony began, the State Department’s Master of Ceremonies asked the guests to be seated and to welcome — to welcome — Cuba’s chief negotiator at the diplomatic recognition talks, Josefina Vidal, along with Cuba’s ambassador to the U.S., Jose Cabañas and other Cuban diplomats, who were shown to front row seats.

Moments after they were introduced, the United States Army Brass Quintet played the Cuban national anthem, after which cheers of “Que viva!” could be heard from the Malecón.

Richard Blanco, a Cuban American we first heard  at the Inauguration of President Obama’s second term, then read a poem recasting what had divided us — the waters between Cuba and the mainland U.S. — into something that unites us.  In his “Matters of the Sea,” he spoke of the waves that “don’t care on which country they break, they bless us and return to the sea,” — and said “no one is the other to the other to the sea.”

In his remarks, Secretary of State John Kerry, the combat veteran who helped Vietnam and the United States reconcile and normalize their relations, recognized that today’s ceremony was possible because “President Obama and President Castro made a courageous decision to stop being the prisoners of history and to focus on the opportunities of today and tomorrow.”

He made clear that those opportunities could only be realized by changing the fundamental premise of U.S. policy, regime change. “U.S. policy,” he said, “is not the anvil on which Cuba’s future will be forged…After all Cuba’s future is for Cubans to shape.”

Secretary Kerry also addressed “the leaders in Havana – and the Cuban people” when he said “the people of Cuba would be best served by genuine democracy, where people are free to choose their leaders, express their ideas, practice their faith; where the commitment to economic and social justice is realized more fully; where institutions are answerable to those they serve; and where civil society is independent and allowed to flourish.”

But, he made clear that we would advocate for those ideas at the negotiating table and through greater engagement among the U.S. and Cuban people, a welcomed break from the policies and practices of the past.

When Secretary Kerry concluded his remarks, the crowd of American, Cuban, and international guests stood as the flag was raised, with the help of the three Marines who lowered it in 1961, and the United States Army Brass Quintet played “The Star Spangled Banner.”

If the morning’s headlines were meant to fast-forward us past the event that hadn’t yet taken place, the statements issued by the opponents of U.S.-Cuba diplomacy were reminders of the failed ideas that we are now in the process of replacing.

As CNN reported, Senator Robert Menendez (NJ) said the U.S. flag should not fly in a country that does not value freedom.

“A flag representing freedom and liberty will rise today in a country ruled by a repressive regime that denies its people democracy and basic human rights. This is the embodiment of a wrongheaded policy that rewards the Castro regime’s brutality at the expense of the Cuban people’s right to freedom of expression and independence.”

Yesterday, the Miami Herald quoted Rep. Ileana Ros-Lehtinen (FL-27) who said, “I am concerned that the image of our flag may be tarnished in the eyes of the suffering Cuban people due to the administration’s misguided concessions to Castro.”
Such statements used to thrill the crowds in Miami, but no more. NBC’s Mark Potter said earlier today that a couple of dozen protestors had gathered in Old Havana to protest the flag raising this morning, a mere fraction of the number of Cubans who came out in Havana to see and hear something truly worth remembering. Read the rest of this entry »

Respect and the Wisdom of Letting Change Happen

August 7, 2015

Before next week’s opening of the U.S. Embassy in Havana, we wanted to say one last thing about last month’s opening of Cuba’s Embassy in Washington.

Three days after the Cuban flag was hoisted at the Embassy, it was lowered to half-staff, as Rosa Miriam Elizalde reported here. This action, consistent with Cuban protocol dating to the early 1960s, was a response to the official mourning period ordered by President Obama after the act of domestic terrorism in Chattanooga took the lives of four Marines and a Navy reservist.

Cuba’s show of respect, so recently removed from the state sponsors of terror list, seemingly ignored by the U.S. press, should come as no surprise.

As we observed in the electric reactions in Havana to the video footage of President Obama shaking hands with President Castro at Nelson Mandela’s memorial, and the euphoria after Cubans watched their President announce full diplomatic relations with the U.S., and ours quoting Jose Martí, Cubans have longed for a relationship that recognized their country’s sovereignty and dignity.

This agreement is still rejected on principle by President Obama’s hardened critics because he chose to negotiate with President Raúl Castro’s government — and assert he got fleeced in the process — rather than wait for Cuba’s system to collapse under the weight of U.S. sanctions.

But, as former U.S. Senator Gary Hart wrote recently, “We don’t negotiate with our friends; we negotiate with our adversaries. We don’t negotiate with our adversaries to do them a favor; we do it because it is in our national interest.”

Precisely! President Obama determined that a respectful relationship with Cuba — real diplomacy on issues like human rights and U.S. fugitives, opening up Cuba for American travelers and businesses — had a better chance to realize our interests with Cuba and Latin America than the policy he inherited from our long, Cold War.

What about Cuba’s interests? What does it get out of this opening?

Some in Cuba are as skeptical as U.S. hardliners. They suspect that the U.S. businessmen and travelers are coming to the island riding a Trojan horse; to them, regime change differs little whether it comes through the back door in the form of USAID urging an uprising or through the front door with a mojito in its hand.

President Raúl Castro has tried to reassure those anxious voices by saying Cuba will not “renounce its ideals of independence and social justice or abandon any of our principles, or give in an inch in the defense of our national sovereignty.”
At the same time, he is trying to manage the high expectations of Cubans who are convinced that normal relations with the U.S. will lead quickly to easier lives in Cuba, and respond to the low expectations of Cuban youth who think that nothing will ever change.

As Time Magazine wrote recently, “Over the last few years the Cuban government has relaxed controls over certain sectors of the economy, but reforms have been slow and halting.” Factors undercutting opportunity, as the Miami Herald reported this week, include the dual currency system, restrictions on Cuba’s self-employed, and lack of free access to the Internet. Cubans expected things to get better faster and sooner.

So, President Castro has to keep one eye on the clock — he’s promised to leave office in 2018 -and another eye on the polls.  As the Washington Post reported this spring, 69% of Cubans ages 18-34 want to leave Cuba and live in another country, 75% of the same demographic want to start their own businesses, and only 15% are satisfied with the economic system.

Yesterday, the New York Times put names to those numbers in its story “Cuban Youth See New Embassy, but Same Old Drab Life.”

“As much as the young welcome political opening and economic reform,” the New York Times reported, such changes are unlikely to filter down to their lives anytime soon.  “Change?  My life won’t change,” Yunior Rodriguez Soto, 17, told the paper. “They won’t let it happen,” he said, referring to the Cuban government. “It’s just how they are.”

This is what makes what President Obama has set out to do so important.

Changing a policy that was written in Washington to determine Cuba’s future was not doomed to failure simply because the Cuban revolution resisted it. It failed because it wasn’t right.

The purpose of isolating Cuba and imposing stifling sanctions on its economy was to make Yunior’s life harder. Dropping barriers, opening travel and trade, tacks in the opposite direction; the new policy respects Cuba’s sovereignty, puts our country on the side of Yunior succeeding, and recognizes that it’s up to Cuba’s government to let change happen.

Read the rest of this entry »