Beyond the headlines – Cuba and the wider world

On Monday (March 21) President Obama will become the first USPresident to visit Cuba since 1928.

During his visit he is expected to use the occasion to speakabout issues that the US believes will bring about political change inCuba: entrepreneurship, opening up theinternet, freedom of speech, and a free media. He will also be critical ofCuba’s record on dissidence and human rights. As his Deputy National SecurityAdvisor, Ben Rhodes, recently observed, President Obama hopes that by doing sohe will empower new economic actors, encourage confidence and pluralism, andmore generally foster a more normal relationship between the US and the Cubaand their people.

In response, President Castro, while welcoming his visitoris likely to be clear that Cuba will not compromise its hard fought forindependence and political and social approach.

In a lengthy commentary on March 9, the official CommunistParty newspaper, Granma, set out Cuba’s red lines for the visit and moregenerally in its relations with the US. It reaffirmed Cuba’s willingness toadvance, but also made clear that in doing so it would not renounce itsprinciples.

Noting that the visit was a part of a complex process ofnormalisation ‘which has barely begun’ it went on to say that no one canpresume that in seeking a better relationship, Cuba will abandon what itssocialist constitution says.

It observed that for Cuba to fully normalise relations withthe US, a range of conditions must be met and all aspects of the embargolifted. It noted too that although the US had eased some of its restrictions ontrade and finance, in practice these measures had proved difficult to implementbecause of other US regulations, and the embargo’s ‘intimidating effect’.

The commentary concluded by noting that profound conceptualdifferences between Cuba and the US will persist.

What this suggests is that despite the historic nature ofthe visit and the extensive global media coverage, for both sides the highlevel encounter is likely to be as much about perception and ideas, aspractical outcomes.

Undoubtedly there will be signals about the future,announcements about US private sector engagement in tourism andtelecommunications, and positive indications about further functionalco-operation between the US and Cuban Administrations. However, it should beclear to any US business person willing to take the time to understand officialCuban thinking, that corporate dreams of rapid and deep engagement are wide ofthe mark.

As the Director General for Foreign Investment at theMinistry of Foreign Trade and Investment, Déborah Rivas, recently told theCuban media, in an interview designed to explain to a Cuban audience the slowpace at which new investment agreements are being signed: “It’s not aboutundertaking whatever project might interest a foreign investor. It’s aboutattracting foreign investors whose projects are in tune with our public policy.We are not undertaking an accelerated process of privatisation of the Cubaneconomy,”

For these reasons, President Obama’s visit, while welcomeand important, needs to be seen in the context of other international anddomestic developments that are likely to have a more immediate and significanteffect on change in Cuba.

After two years of negotiations, and following a finalmeeting between Federica Mogherini, the EU’s High Representative for ForeignAffairs and Security Policy, and Bruno Rodriguez, Cuba’s Foreign Minister, thetext of a Political Dialogue and Co-operation Agreement between Europe and Cubawas initialled on March 11 in Havana.

It creates a basis for advancing trade and economic ties,discussing political issues including human rights, and provides for fundeddevelopment support and co-operation. It effectively brings to an end Europe’s1996 common position that linked engagement with Cuba to conditionalitiesrelating to human rights and democracy; a position largely ignored in recentyears by EU many member states following indications from late 2013 on that theUS was considering re-establishing diplomatic relations with Cuba.

The agreement followed another reached last December by anad hoc Paris Club working group on Cuba which resolved the issue of thecountry’s last remaining major debt to international creditors. Then a basiswas agreed on how to resolve the issue through a mix of debt repayments, debtforgiveness and the translation of significant parts of the remainder intodevelopment projects in Cuba.

Since that time, the UK, France, Germany Spain, Austria, theNetherlands and the other nations involved have moved rapidly to formaliseagreements that will enable their companies to obtain a strong long-termfoothold through investment in the Cuban market.

While EU engagement would not have occurred unlessWashington had signalled a change in policy, the reality is, as Europeandiplomats observe, the Paris Club agreement and the new relationship withEurope mean that EU companies can now obtain financing and a foothold before,they suggest, the next US Presidentlifts the embargo.

The implication is that a race has begun involving Europeand the US, as well as China, Japan, Russia, Mexico, Brazil and others who arealso moving rapidly to deepen relations, for economic advantage and influence,not least because of Cuba’s significant influence in the Latin American andCaribbean region and internationally.

It is a process in which Cuba – if it is able to invigorateits economic restructuring and speed up decision making and delivery – is potentially in good position to takeadvantage of; not least by being able to govern the relative speed at which itengages with each of its private and public sector suitors.

That said, much depends on the outcome of the 7th PartyCongress on April 16. This will endorse the country’s future economic approach,is likely to make clear the process of change after 2018 when power is handedto a new generation, and is expected to addresses fundamental issues such asthe slow pace of decentralisation, individual responsibility, the engagement ofyouth, and the role of the internet.

Central to Cuba’s future development will be how the CubanCommunist Party and its government intend adapting economic strategy in waysthat enable a less constrained approach to growth and decision making, offersmore in the way of material incentives to enterprise and workers, and ends thehemorrhaging abroad of increasing numbers of its brightest young people. Thechallenge in doing so will be finding a basis on which a new balance can bestruck between flexibility, the offer of new freedoms and more materially, and theretention of Cuba’s unique sense of social cohesiveness, commitment and solidarity.

David Jessop is a consultant to the Caribbean Council andcan be contacted at

david.jessop@caribbean-council.org

Previous columns can be found at www.caribbean-council.org