Prepared
Statement of Dr. Susan Kaufman Purcell
Director
Center
for Hemispheric Policy
University of Miami
March 5, 2008
House
Committee on Foreign Affairs
Subcommittee
on the Western Hemisphere
Prepared
Statement of Dr. Susan Kaufman Purcell
Director
Center for Hemispheric Policy
University of Miami
March 5, 2008
House Committee
on Foreign Affairs
Subcommittee
on the Western Hemisphere
The transfer of
presidential power from Fidel Castro to Raúl Castro has sparked a debate in the
United States over the
significance of the transition and whether U.S. policy should change in
response to Raúl’s assumption of the presidency. The debate coincides with a U.S.
presidential election year. Despite significant domestic criticism of U.S. policy toward Cuba,
none of the principal presidential contenders has called for an immediate
lifting of the U.S.
embargo, which would represent the most radical policy option. Instead, the
recommended changes in Washington’s Cuba policy range from talking with Raúl
Castro to maintaining the U.S. policy status quo until both Castro brothers are
no longer in power. Many policy analysts, interest groups and the media,
however, have begun calling for increased U.S. engagement with the new Cuban
government.
The engagement option is
based on the assumption that current U.S.
policy - particularly the embargo - has not worked, in the sense of either
toppling the Cuban government or getting to open Cuba’s economy and/or political
system. This argument is correct as far as it goes, but it does not go far
enough. In advocating engagement as an alternative, it ignores the fact that
the rest of the world has been “engaging” with Cuba
for many years, also with no apparent success in producing positive change in Cuba.
The main obstacle until
now to a meaningful transition from a closed to a more open political and
economic system has not been U.S.
policy, but rather, Fidel Castro’s desire to maintain political and economic
control over the island and its people. The experiment with an economic opening
in the 1990s, for example, occurred in the aftermath of the Soviet collapse and
the termination of billions of dollars of Soviet aid to Cuba. Fearful
of an economic, and possibly, a political collapse, Fidel accepted Raúl’s
recommendation to allow some foreign private investment on the island and
permit the circulation of dollars, as well as the creation of some small,
private businesses. The reforms produced encouraging economic results, but
Fidel accurately concluded that the latter two in particular threatened his
political control. They were therefore reversed.
The fact that Raúl
proposed the earlier aborted reforms, however, combined with some critical
remarks he recently made regarding the functioning of Cuba’s economy and the
need for change on the island, have raised expectations that Raúl will now
revive some of his thwarted reforms of the past and/or try something new in
order to make Cuba’s economy more productive.
Contributing to the expectation that economic reforms will be
forthcoming is the fact that 70% of Cuba’s population was born after
1959. Having known nothing but economic hardship and broken promises of a
better future, they have become increasingly critical of, and disillusioned
with, Cuba’s
revolutionary regime. This is
particularly true of the 2.2 million Cubans who were born after the Soviet
collapse in 1992 and who want what other young people have, such as access to
the Internet, Nike sneakers, iPods, and the freedom to frequent Cuba’s beach
resorts and to travel abroad.
There is no debate in
the United States regarding
the sorry state of the Cuban economy and Raúl’s need to “do something” to win
support from Cuba’s
alienated youth. Rather, the current
debate over the future of U.S.
policy toward Cuba
is based on different assumptions regarding what engagement can or would
achieve. Those calling for increased U.S.
engagement with Raúl’s government tend to believe that without such engagement,
Raúl’s economic reform efforts will fail, or the United
States will be faced with “another Mariel,” a reference
to the regime-sanctioned mass migration of approximately 125,000 Cubans to the United States
in 1980. They also argue that countries hostile to U.S.
interests - such as Venezuela-
will continue to increase their influence over Cuba. The advocates of engagement also believe that
a more “normal” relationship between Cuba
and the United States will
help spread American economic and political values, thereby increasing the
chances that Cuba’s
transition will move in directions favorable to U.S. interests. Finally, there
seems to be a sense that it is better for the United States to do something rather
than nothing in response to the transition to Raúl.
Opponents of engagement
with the Raúl Castro regime argue, in contrast, that engagement will legitimize
his still dictatorial regime. They also argue that it will allow Raúl to
undercut opposition to his rule by allowing him to improve the economy and
living standards of Cuban people without having to make significant political
reforms. They point out that Fidel and Raúl only began opening the Cuban
economy when they had no alternative due to the collapse of Soviet aid. Once Cuba was able to substitute Soviet aid with
approximately $2 billion in aid annually from Hugo Chávez’s Venezuela,
there was no more experimentation with reform. Instead, there was talk of the
need to increase efficiency and productivity within the current economic and
political systems, which is Raúl’s “new” message to the Cuban people.
The above debate about
engagement is somewhat misleading, however, because despite the embargo, the United States is already significantly engaged
with Cuba
economically, and to a lesser extent, politically. The United States is already one of the major
exporters of agricultural products to Cuba. Unlike other foreign exporters to the island,
however, U.S.
exporters cannot extend credit to the Cuban regime. Instead, Havana
must pay for its U.S.
imports in cash. Cuban-Americans are also allowed to visit their relatives on
the island once every three years, and to send their relatives 1,200 dollars
annually. Both policies represent a pullback from the allowance of more
frequent visits and larger money transfers that existed under the Clinton administration.
The change was motivated by the desire to reduce the regime’s access to hard
currency that could undermine Cuba’s
need to reform its economy. Politically,
Washington has through the years “engaged” Havana in discussions
regarding immigration and drugs.
Furthermore, current U.S. policy does not close the door to a more
engaged policy toward Cuba.
Under the Helms-Burton law, Washington can
start providing aid to Cuba
and could ultimately lift the embargo if and when the Cuban government begins
taking steps to implement free and fair elections, releases political
prisoners, allows candidates for office access to the media and begins putting
in place other institutional underpinnings of a democratic political system and
a market economy. An important pre-condition, however, is that neither Castro
brother can be in control of the government.
It is not clear whether
current U.S. policy toward Cuba would be sustained if the U.S. elections
in November give control of Congress and the presidency to the Democrats. In
addition, several polls indicate that support for the embargo is decreasing,
particularly among younger Cuban-Americans, who say they would like to see a
more “normal” relationship between Cuba
and the United States.
While recognizing the
desire for a change in U.S.
policy toward Cuba
on the part of a growing number of Americans, I believe that any dramatic
change in the policy at this time would be premature, for a number of reasons:
·
There
is as yet no evidence that Raúl is interested in implementing reforms that
would give Cubans more economic and political freedom. Instead, his interest
seems to be to change things just enough so that they can remain the same. His exhortations for more efficiency and
productivity are echoes of similar words used by Fidel.
·
Raúl’s
encouragement of constructive criticism of the situation in Cuba could
still turn out to be motivated more toward identifying critics and opponents of
the regime rather than by a real commitment to establish a more open
regime. Reportedly, the student who
expressed a desire for the freedom to frequent Cuba’s hotels, access the Internet
and travel abroad was subsequently arrested, reappearing shortly thereafter to
“clarify” supportive of Cuban socialism.
·
Raúl’s
expression of interest in having better relations with the United States does
not constitute a change in policy, since he conditioned his statement in the
same way that Fidel always did—by adding that a better relationship could not
be based on preconditions and should be characterized by mutual respect.
·
The
potential impact of Cuba’s
recent signing of two important international human rights treaties that Fidel
had long opposed was weakened by the subsequent comment of Cuba’s foreign
minister. The treaties guarantee freedoms such as freedom of religion, freedom
to leave a country and the right to self-determination and to peaceful
assembly. Cuba’s
foreign minister subsequently stated that the Cuban government has always upheld
these rights, which is not the case. On the other hand, like the Helsinki
Accords signed by the Soviet Union and not implemented by Moscow until years later, the new agreements
raise the possibility that Cubans in the future will be able to use these new
agreements to pressure their government to implement their provisions.
If, on the other hand,
the Raúl Castro government were to begin to take significant steps in the
direction of a political and economic opening, and the next U.S. president
and/or Congress wanted to respond positively to such reforms by increasing U.S.
engagement with Cuba, I believe that any increased engagement should be aimed
toward leveling the playing field between the Cuban government and the Cuban
people. Stated differently, whatever money might enter Cuba as a result of increased U.S. engagement
should go overwhelmingly to the Cuban people rather than to the Cuban
government. For example, allowing increased U.S.
tourism to Cuba
would mainly benefit the Cuban government, and particularly the military, which
controls the tourist industry, as opposed to the Cuban people. In contrast,
engagement that allows Cuban-Americans to send more funds directly to their
relatives in Cuba
would not only improve their living standards but, in the process, decrease
their dependence on the Cuban government. Obviously, these remittances would
ultimately find their way into government coffers, but at least they would
first improve the living standards of Cuban citizens and while making them less
dependent on the government.
Along these same lines, Cuban government reforms that
would enable foreign investors in Cuba to hire their own workers and
pay them directly in dollars, or in pesos that reflect the real rather than an
arbitrary and confiscatory exchange rate, would constitute a significant and
positive change on the part of the Cuban government. At present, the Cuban
government maintains an artificial exchange rate of one peso to the dollar; the
real exchange rate is about 25 pesos to the dollar. Foreign companies operating
in Cuba
are forced to pay their workers’ salaries in dollars directly to the
government, which in turn pays the workers in pesos at the one-to-one exchange
rate. This means that the Cuban government pays each worker US$1, for every US$25
that it receives from foreign companies for workers’ salaries. Under such a
system, foreign investment is benefiting the Cuban government, not Cuban
workers. This is the kind of engagement that stifles, rather than encourages,
meaningful change on the island.
It also would be a mistake for the United States to lift the embargo unilaterally
or as a first step in response to reforms that Cuba might make in the direction of
free and fair elections and a market economy.
Such Cuban reforms are reversible; a lifting of the embargo would not
be. Whether or not one supports the embargo, it can be a useful bargaining chip
for promoting reform on the island. It is true that the United States
is no longer the only or even the principal game in town. Venezuela provides about $2 billion in aid,
particularly oil, each year to Cuba.
The Chinese and Brazilians are providing significant credits. Mexico is also moving toward increased economic
involvement with Cuba.
Nevertheless, this does not mean that Cuba
does not need or want access to the U.S.
market, or to loans from international economic institutions where the U.S. has veto
power. Despite reduced U.S. economic leverage over Cuba, the
benefits of refraining from a premature lifting of the embargo exceed the costs.
The argument that the United States
is “losing out” to other countries that are free to invest in, and trade with, Cuba is the same argument that was made in the
initial phases of Vietnam’s
economic opening. If Vietnam
is any indication of what could happen in the Cuban case, the absence of U.S. companies in the Cuban market in the early
days of a Cuban economic opening would not greatly affect the ability of U.S. companies to gain market share quickly once
Cuba
significantly implemented market reforms.
Finally, there is the issue of the future of U.S. policy toward Cuba
in the context of U.S.
policy toward Latin America and the Caribbean. Since the Carter administration, U.S. policy
toward the hemisphere has been based on support for democracy and human rights
on the political side and on the economic side on support for market economies,
free trade and regional integration.
These policies, which received widespread support in the past, have more
recently come under criticism from certain groups and governments in Latin America, for a variety of reasons. The country
leading the opposition to these policies in the hemisphere is Venezuela,
under President Hugo Chávez. His control of the country’s vast oil wealth has
enabled him to buy friends and allies throughout the region and to increase his
influence on, and involvement in, the governments of several Latin American
countries, including Cuba.
Washington has responded
to the fragmentation within Latin America by trying to help and work with those
countries in the region that are basically friendly toward the United States
and supportive of democracy and market economies. Given the U.S. approach toward the hemisphere, it would
run counter to U.S. policy
and its interests in the region if Washington
were to pursue policies that make it easier for the Cuban regime to avoid
opening its economy and political system.
Instead, existing U.S. policies toward Latin America and the
Caribbean should be expanded to include Cuba, when and if there has been
significant movement toward free and fair elections and a market economy. Key
among such policies is the Millennium Challenge Account (MCA), which provides
significant development assistance to countries in the region that are making
progress in implementing democratic and market reforms. Also relevant are the
series of bilateral or regional free trade agreements that the United States has entered into with a large
number of its Latin American and Caribbean
neighbors. Both policy initiatives are aimed at strengthening democracy and
market reforms in the region and would be helpful and complementary to any
Cuban efforts to implement such reforms.
At the same time, it is
counterproductive to think in terms of extending the above-mentioned policies
to a more open Cuba
while denying them to friendly and democratic countries in the region that want
to participate in them. The failure to approve a free trade agreement with Colombia, a
country that has made significant political and economic reforms despite being
threatened by a vicious and criminal guerilla movement that receives support
from Hugo Chávez, is a serious error. President Uribe has been responsive to
Congress’ concern over the murder of labor leaders by right-wing paramilitary
groups and the number of murders has decreased. Although more remains to be
done, Colombia’s
labor leaders, and Colombians in general, will be safer and more prosperous
with a free trade agreement than without it.
In addition, the
Millennium Challenge Account needs to be expanded to include not only a
democratic Cuba,
but also, poor people who happen to live in democratic, middle-income
countries. At present, only a small minority of Latin American countries are
poor enough to qualify for aid under the MCA. The millions of poor people living
in other Latin American democracies such as Peru,
Brazil and Mexico are
ineligible to receive such assistance. Although funds are not unlimited, and it
will be more difficult to target funds and programs to specific parts of
countries, the expansion of the MCA to include a larger percentage of the poor
in Latin America (a relatively wealthy developing region), would help
consolidate the hemisphere’s still relatively new democracies and reinforce a
democratic transition in Cuba
as well.
Part of the argument for
doing more to help consolidate democracy and market economies in Latin America
is related to U.S. concerns over Venezuela’s aggressive efforts to expand its
influence in the hemisphere, especially in Cuba, at the expense of the United
States. There are signs, however, that Raúl Castro understands that
overdependence on Hugo Chávez could lead to the same unhappy result for Cuba that overdependence on the Soviet Union produced in the past. This explains, for
example, his courting of President Lula of Brazil. The United States has nothing to fear from the
increased involvement of democratic Latin American countries in Cuba. In fact,
the United States
should welcome such involvement. Given the history of U.S. – Cuban relations, it is probably better for
the United States to have
other democratic countries take the lead with Cuba.
Furthermore, as a result
of the boom in commodity prices and the recent discovery of vast underwater oil
and gas reserves in Brazil,
there has been a geopolitical shift in the hemisphere. Where before there were
only Chávez’s ambitious policy initiatives, there is now Brazilian-Venezuelan
competition for dominance in the region. And in such a competition, Brazil is far
better placed to emerge as the winner, given its more diversified and advanced
economy and its relatively strong democratic political institutions and
culture. Venezuela,
in contrast, is essentially a petro-economy, and while its energy resources
remain plentiful, they are declining as a result of bad economic policies and
gross mismanagement. Furthermore, President Chávez’s support within Venezuela is
also decreasing, as basic foodstuffs become scarce, infrastructure is
neglected, splits within the Venezuelan military increase and his aura of
invincibility dims in the aftermath of the December 2007 elections.
In this context, current
U.S.
efforts to lower its rhetoric concerning Hugo Chávez are helpful and should be
continued. This does not mean that Washington
should not be concerned over the Venezuelan president’s actions, such as Chávez’s
massing of tanks and soldiers on Venezuela’s
shared border with Colombia.
It only means that rhetoric is less useful in protecting U.S. interests
in the hemisphere, especially where Hugo Chávez is concerned, than are other policy
options.
In conclusion, U.S. policy toward Cuba should not be changed too
rapidly, before there is significant movement toward free and fair elections,
the granting of some basic freedoms that are now absent, and movement toward a
more open economy. Raúl Castro only recently became Cuba’s president. There is evidence
in his past that he is capable of both reforming and repressing. Washington should therefore be watchful and willing to
meet positive, measured changes in Cuba
with positive changes in U.S.
policy toward Cuba.
There is, after all, no reason to believe that the largest market in the world,
located just 90 miles from Cuba, has more to lose from avoiding a precipitous
change in its policy toward Cuba than Cuba stands to lose from failing to give
its people more economic and political freedom as a precondition for
establishing a respectful and productive relationship with the United States.