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Dealing With the New Cuba
Michael Parmly
Retired Senior Foreign Service Officer; Former Chief of the U.S.
Posted: 01/09/2015 10:18 am

In the weeks since Presidents Obama and Castro announced the historic
breakthrough in U.S.-Cuban relations, most attention has focused on what
the United States should do next. Fine, but in diplomacy and in life, it
is critical to understand where “the other guy” is coming from.

Assistant Secretary Roberta Jacobsen will lead the US side in the talks
in Havana sometime in January, but it is really the expected encounter
between the two Presidents in April at the Hemispheric Summit in Panama
that will be the occasion for any further major steps forward.

In his one programmatic statement since the December 17 breakthrough, on
December 20 before the Cuban National Assembly, got specific
on one area above all: The poor state of the Cuban . “The
challenge we face is very big. We need to put Cuba’s economy at the same
level as the political prestige that our little island has acquired
thanks to the Revolution, the heroism and the capacity to resist of our
people.” Raul’s problem is that whereas political standing can be fudged
— his “deal” with President Obama reflected that — it is Cuba’s
lamentable economic reality that has brought so many of the country’s
11.2 million inhabitants either to press the State for change or to
“vote with their feet” and leave for Europe, Mexico and/or the United
States.

Raul knows that intimately. He has been working on economic reform since
he took office in 2008. He has, sadly, little to show for it. Nominal
growth is stuck at near 2%, even as government statisticians
unconvincingly try to persuade all that 2015 will see that rate top 4%.
Most disappointing, the agricultural sector has led the laggards, with
near-zero growth in farm production. (In the ultimate irony, the country
continues to import more than two-thirds of its production from
abroad — most of it from the U.S.) In the meantime, the country’s
infrastructure remains stuck in the same rut it has been in for decades.

Havana is painfully aware of the problem. This past year, the Government
launched to great fanfare a huge new foreign- zone in Mariel
— the aim being to shift all commercial shipping from the crowded port
of Havana, to leave the latter for cruise ships and tourists. The main
bet seems to be on the sector, with construction topping
any other industry as a recipient of official investment funding. The
expectation seems to be that foreigners will be Cuba’s economic
salvation. Cuban officials, eschewing the strongly nationalistic
rhetoric that has characterized Cuban narratives since 1959 and before,
seem content to rely on non-Cubans to carry the burden of transforming
the country.

That prioritization is surprising. Even if reform measures have been
slow to take effect in terms of economic output, the consistently
industrious Cuban people have exploited every opportunity offered to
them. Opening Cuba to the transfers of funds from abroad has resulted in
a flood of resources that by many accounts is the main source of
financing for private enterprise. Newfound flexibility of rules in the
property market has produced almost all of the real estate arrangements
seen in the few past years. The main outstanding gap is reform of
employment laws.

The question is what happens to Cuban self-esteem and identity in all
this. The rush to attract foreign funds is not surprising; there is very
little “reserve capital” in a country that ranks near the bottom of
every economic rating of the hemisphere. Besides, the need to reform
Cuba’s currency is a huge task, comparable only to that of Helmut Kohl
in the early 90s when the Deutschmark had to absorb the OstMark.

However, while foreign investment is needed, turning the country over
excessively to outside investors is risky. Cubans traditionally have
prided themselves on their independence. Raul, keenly aware of the power
of Cuban nationalism, has repeatedly cited Jose Marti, Cuba’s George
Washington, in recent public appearances. At this moment, the population
may be so poor that they would settle for almost anything and urge Raul
to do the same, but it would be a mistake for Ms. Jacobsen, and even
more the President, to seek to press the U.S. advantage by exploiting
Cuba’s current economic weakness.

Raul Castro has not said much since the December 17 joint announcement,
but his December 20th speech to Cuba’s National Assembly is a valuable
guide to Cuba’s current “going in position.” Most of the foreign press
concentrated on Raul’s remarks on economic reform. Those paragraphs were
not the core of his speech. Instead, in his most convincing cross
between comedian Rodney Dangerfield and singer Aretha Franklin, Castro
sought R-E-S-P-E-C-T. It is a very Cuban tune.

Raul himself has not yet figured out how to reconcile the pressing need
for foreign financing with Cubans’ traditional preference not to be
treated as a little brother, but his countrymen and women would
certainly resent the U.S. overplaying its hand, as it has so often in
Cuba’s past. Not right away, perhaps, but eventually.

Raul needs to figure this dilemma out on his own, or at least among
Cubans. He would be wise to lean on a wide range of Cuban actors — the
Catholic Church and other indigenous denominations; courageous Cuban
nationalists like Yoani Sanchez, Berta Soler and Dagoberto Valdes;
respected groups like Cuba’s discreet but powerful — and patriotic —
Masonic movement; Cuban workers hired directly (as they should be) by
Cuban and foreign investors; as well as his traditional base in the
Communist Party.

The U.S. can only help Cuba so much, and it would be a mistake to try to
do more. The world has been waiting for more than 50 years for this
moment — let’s not blow the chance.

Source: Dealing With the New Cuba | Michael Parmly –
http://www.huffingtonpost.com/michael-parmly/dealing-with-the-new-cuba_b_6443276.html

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