Monday, September 21, 2020

Rafael Hernandez: Cuba-U.S. Relations for Beginners, I - IV

Cuba-United States relations for beginners (I)

One thing is each one’s respectable opinion and another, quite different, is to understand the nature of these relations.

Rafael HernándezbyRafael Hernández June 25, 2020 in Opinion

Cubans can confess ignorance in epidemiology or meteorology, but not about Cuba-United States relations. Perhaps nothing brings them so together on the same side―including those who don’t agree with the system―as that historical tension between a North that has sought to prevail at all costs, and a country determined not to let itself be dominated, at all costs.

If that were a trait of thinking as a country, surely it would be necessary to feel proud of a civic conscience. After all, as a history teacher friend says, “we are political animals” who have no choice but to opine on “a matter that concerns us.”


Here comes the basic idea (or the “theoretical framework,” as they used to say in the past at the University of Havana) of this conversation: one thing is each one’s respectable opinion and another, quite different, is to understand the nature of these relations.

Let’s assume that it is a couple in marital conflict. Those who care, are interested in and think about them don’t have to understand what is happening to them; opining hardly expresses “knowing,” for example, which of them “is right.” But the conflict itself, as Carl C. Jung would explain to us, is more than that. It isn’t as simple as among other beings in the natural world, say, the wolf and the sheep or the shark and the squid. Nothing compares to a conflict between human beings, especially if they live under the same roof, or almost.

Slipping by that same condition of human beings, some consider that Cuba’s relations with the United States are one of hate/love. Surely they refer to the many tastes Cubans share with American society and culture: baseball, jazz and rock, rumba and salsa, movies, swing, household gadgets, cars, etc. When comparing Cubans with other Latin Americans, probably an impartial third eye would find us closer to the gringos (pejorative Mexicanism), whom Cuban speech calls (affectionately) yumas (for that western, with Glenn Ford).

So how can you fight to the death with such yumas? The conflict, naturally, is not with the Americans, nor is it hate/love or Eros and Thanatos, as Jung would say, but with their nation-state and successive governments. Although the idea would seem most reasonable and accepted by all, the personalization of the conflict continues as if nothing had happened. Attributing character traits to political power is equivalent, for example, to diluting the role of president of the United States in a certain personality: authoritarian, sexist, brute, narcissistic, slanderous, arrogant, stupid; or if you prefer, smiling, collectivist and affable, friend of immigrants, war-abolishing, “dialoguer” and social-civilist. There are people like that or who bear that image, although they don’t always deserve it.

In any case, attributes of this type don’t explain, say, that the German nation followed Hitler. To consider Nazism as the collective madness unleashed by a psychiatric leader or, on the contrary, by the good man adorned by a paragon of virtues, Franklin Delano Roosevelt, as the embodiment of justice, totally lacks explanatory power, if it’s about politics. Otherwise, it will be difficult to understand that Donald Trump ends his mandate without having programmed (firmly) the dropping of several atomic bombs on another great nation (as FDR did); or that the brave civil rights fighter Bob Kennedy had something to do with paramilitary actions, incendiary bombs, machine-gunned farmers and fishermen in cities and fields on the island. “Nothing personal, just business,” as Vito Andolini, a native of Corleone, Sicily, would say.


Deciphering the reason of State from morality is not understanding it, Niccolo Machiavelli said to Lorenzo de Medici. Of course, that reason of State can be very cynical and atrocious, but you don’t gain much by simply condemning it, if it were to reason about it and glimpse what it proposes. Yes, because understanding a conflict between nation-states, like almost anything else, is measured by the ability to calculate what should come next, even if it isn’t in the extreme of “the possible,” but in the range of “the probable.”

In order not to constantly make mistakes in what is coming, and to identify the factors that keep the conflict alive, it is useful to begin by understanding the nature of politics: that of the United States, that of Cuba, that of any country. As almost always happens with the black box part of all processes, it is normal that there aren’t enough facts. “In politics, what is real is what cannot be seen,” Martí tells us.

This lack of clarity gives rise to all kinds of superficialities, particularly those that are built on “politics is conspiracy” and “politics is concentrated ideology.” In other words: “The twin towers were downed by the CIA,” “Cuban State Security must have known about the sonic attacks (those were the North Koreans),” “it’s impossible for a black man to be president,” “if The New York Times, CNN and all the mainstream media are against him, how can he beat Hillary?”.… Of course there are conspiracies and ideologies, but the architecture of politics is not revealed by the Da Vinci Code, speeches or editorials nowhere, but the dynamics of interests and values. Forgetting it involves making mistakes over and over again, as can be seen.

Hence, Cuba-U.S. relations in the last 60 years, crossed as they have been by all kinds of conspiracies and ideological polarities, are only rationally explained if it is known that they have always included dialogue, understanding and cooperation. As Leogrande and Kornbluh demonstrate, based on declassified documents, the Cuban leadership did not stop responding to any U.S. signal to dialogue, negotiate or agree on anything of common interest, without excluding the most tenacious Republican administrations: Nixon-Kissinger, Reagan, G.H. Bush and G.W. Bush.

This means that conflict and cooperation have not taken place in a linear sequence, which led to cooperation when the Interests Sections were established (1977) or diplomatic normalization was agreed on 17D (2014), rather, they have accompanied relations, and they have almost always acted in parallel, with contradictory and zigzagging results. Appreciating relations in this way allows us to recognize their complexity, instead of attributing the contradictions to the classic god mounted on a machine that descends through a window. It is not an aberration; it’s that way and probably still is.

With these conditions, and to make a pause in this talk without a didactic purpose (and without rushing to meet the teaching program), it would be necessary to return to the nature of the conflict.

If it was triggered by the Agrarian Reform Law (May 1959), just five months after the taking over power, when the Soviet Union didn’t fully understand what was happening in Cuba, and the Popular Socialist Party still called it “the January revolution,” the cause of everything was the expropriation of the United Fruit’s large estates? Is that the egg of the huge conflict? What came next, the spiral that led to the civil war, the organized violence on the Bay of Pigs scale, months before the nationalizations of the summer and October 1960, was it because of those first expropriations? Was it the anti-communism of a Cuban upper class and an American government that saw the hammer and sickle silhouette behind any moderate reform? Is there an explanation that goes beyond listing “nationalizations” and attributing the root cause to “imperialist ideology”?

This, which may seem like a history lesson, is key to understanding the conflict here and now, and also to thinking about its horizon, as will be seen very soon.

Cuba-U.S. relations for beginners (II)

What has happened between Cuba and the U.S. is closer to a novel, whose plot becomes more complicated in each chapter.

 by Rafael Hernández

 July 11, 2020

“Cuban blacks look directly into the eyes of whites,” noted an impressed U.S. visitor in 1907: “To the American at home, the negro as a social, political or even industrial equal is an affront, an offence, nothing less; to the Cuban he is not. It is because in Cuba the negro…is not everywhere confronted and made hard in thought and feeling…. Schools, churches, theatres, hotels, baths, street-cars, steamers, all are the black man’s and white man’s alike.”

This is how R. L. Bullard described the differences between Cubans and Americans, in The North American Review, less than five years before the massacre of the Independent Party of Color. Obviously, this U.S. army lieutenant colonel’s vision of interracial relations in Cuba was not that of a Cuban who lived on the island, and even less that of an anthropologist or sociologist. Usually, those who come to visit look at things with the glasses they bring. However, even if it is an idealization of Cuba as a “racial democracy,” when looking at it with the polarized lenses of the United States, this military officer did not only reflect the remarkable differences between the two sides.


Bullard: How Cubans differ from us Americans.

Even today some Americans seem puzzled to discover that, compared to the U.S., where a drop of African or “Latino” (Hispanic, in the Census jargon) blood disqualifies them as white, in Cuba, whoever “seems white” automatically is so on paper. In fact, you may not even be black or white, but mulatto, for centuries. That mulatto (formerly “brown”), however, appear today in official documents as “mestizo,” a census category that does not exist in the U.S., but is present in Latin America and the Caribbean.

Naturally, no category or generic term exhausts the representations about skin color and somatic features that really exist in Cuban society, which the anthropologist Jesús Guanche took the trouble to compile in a list of 20 “popular phenotypes.”1 Compared to this, the U.S. categories are rather bland.

The weight of the American in the construction of Cuban identity, recognized by Fernando Ortiz in his theory of the melting pot, has been thoroughly documented in works such as those of the great historian Louis Pérez Jr., in the same way as the unusual weight of Cuba in the northern imagination, since the 18th century, as well as in the monumental collection and editions of Emilio Cueto. That Cuban-American space is not only symbolic, but so tangible that it allowed blacks and whites from both sides to play for the first time on the same baseball field, decades before Jackie Robinson did so in the United States.

This meeting between societies, essential to understand Cuba-U.S. relations, has always been made up of multiple layers and nuances, which permeate not only the mutual perceptions below, but also above. Seen with lenses from the North, Cubans have lacked, for example, any appreciation for the rule of law, according to an influential reporter in 1917: “We have given them the great gift of freedom and constitutional government, but we have never taught them how to use them…. Our responsibilities therefore do not end in giving Cuba the forms and titles of freedom. We have to help keep Cuba libre, saving Cubans from themselves.”2

Why this “heavy burden of the white man” about Cuba―among all the lands in the world―for the United States? How to explain its excessive space in the American mind, before the Soviet threat, the cold war, communist totalitarianism and other abominations emerged? Will it be the quintessential imperialist ideology? The monopoly interests of corporations? Recurring racism? The evil condition of its rulers?

The explanation for this comes from a founder: “I candidly confess that I have ever looked on Cuba as the most interesting addition which could ever be made to our system of states. The control which, with Florida Point, this island would give us over the Gulf of Mexico, and the countries and isthmus bordering on it, as well as all those whose waters flow into it, would fill up the measure of our political well-being.” This is how Thomas Jefferson explained that “good spirit that loved freedom and instilled strength in sleepy people” (according to Martí) to President Monroe, anticipating 75 years of military intervention on the island, and what we modernly call geopolitics.

In the summer of 1960, American oil companies did not like the idea of ​​refining Russian oil. But they were willing to do it. It was the Secretary of the Treasury who let them know that they should not accept it, in the best interest of the United States, as Ambassador Philip Bonsal himself regrets in his memoirs. What followed was the application of Cuban law from before 1959: the companies were nationalized. That fact, naturally, gave a boost to the spiral of U.S. sanctions already underway, and led to the conflict with the massive nationalizations in October of that year.

However, it was not those nationalizations that brought bilateral relations into a collision course. The CIA’s 500-man infiltration plan devised in late 1959, which Eisenhower officially stamped in March 1960 (when they already reached 1,400), was under development almost a year earlier, with Operation Pluto, better known later as the Bay of Pigs invasion. So the Treasury Secretary’s orientation was part of a hot war that dragged Esso and Texaco with it, not the other way around. 

This detailed sequence illustrates that neither the nationalizations nor the strengthening of relations with the Soviets determined the plan to forcibly sweep away the Revolution, but a geopolitical reason, not only reducible, incidentally, to an ideology, to an imperialist vocation and less to a presidential personality. The logic that hierarchized the geostrategic environment was joined to the idea of ​​preserving, to put it in Jeffersonian terms, “the political well-being” of the United States.

Of course, the definition of this well-being and the means used to achieve it are not insignificant. Politics is precisely about identifying the national interest and choosing the means to achieve it. So changing these means, even if it is to try to achieve the same goals, is significant. I mean, except for those who don’t see differences between aircraft carriers and cruise ships. A discourse that does not pay attention to these distinctions is equivalent to that of a physicist who, in order to differentiate similar elements or isotopes, some stable and others very unstable or radioactive, prefers a watercolor rather than a spectroscope (and paints them more or less the same).

Recognizing geopolitical reason is also not equivalent to admitting the droit de seigneur of a great power over a certain space where others live. The same reason advises precisely to compensate the geopolitical imbalance, for example, through a policy of alliances. When it became clear―to the Cuban government and to the large landowners―that the United States was irritated more over the style of that Revolution than even at its moderate reforms; when it was clear that something was going to go wrong between the two, once again, the young government launched its ambassadors around the world, looking for allies, wherever they could be found. “It was a mistake to ally with the USSR and communism” is a phrase repeated ad nauseam, as if Cuba had too many open doors at the time. What some dismiss as an irrepressible ideological drive―in Cold War jargon, “exporting the Revolution” and “becoming a Soviet beachhead”―occurred amid a critical political situation of survival.

The private conversation that Che and Richard Goodwin had four months after the Bay of Pigs invasion is quite well known, where he had the impression that “Cuba wanted an understanding with the United States.” Less is known about some details of this dialogue. According to the report of the JFK senior adviser, Che stated that Cuba was willing to compensate the companies nationalized the year before (“by commercial means”), not to establish political alliances with the socialist bloc (although they did maintain relations and express sympathies) and suggested that they would accept “even discussing the issue of the activities of the Cuban Revolution in other countries.” For Goodwin, Che only set a limit: the Cubans were not going to discuss “any formula that implied abandoning the type of society they were dedicated to.”

In order to respond to this olive branch offered by none other than Che Guevara, Goodwin recommended to JFK emphasizing economic warfare, “direct sabotage activities against key sectors of the economy,” carry out unannounced military maneuvers, “continue and raise the level of covert actions” and “create a Security Pact in the Caribbean,” that antagonizes the “psychology of peaceful coexistence that Castro is trying to create” and can “serve as a screen for some of our activities.”3

When looking closely at this fact, one cannot help but wonder what would have happened if the U.S. had sat down to talk with a government so threatened, in the midst of a civil war situation, that nevertheless responded with an olive branch. What would have happened is not a waste of time, both to those who present the Revolution as a kind of syntactic error in the grammar of History, as to those who believe, on the contrary, that this story springs from an invisible hand that writes with a single calligraphy, almost like dictation.

For those liners on both sides, what has happened between Cuba and the United States is a tragedy or an epic, when in reality it is closer to a novel, whose plot becomes more complicated in each chapter. 

It is somewhat rare that Cuba “exported the Revolution” and, at the same time, orbited as a “satellite of the USSR,” when the Soviets never really liked “Cuban guerrilla adventures” in Latin America and Africa. In any case, if those were the two engines driving the Cuba-U.S. conflict, the “exporting the Revolution” to Africa and Central America ended in the late 1980s and the USSR ceased to exist in the early 1990s.

Thus, the enigma seems to be: what has kept that plane flying, with its two engines not working? Perhaps it was that the core of the conflict was really, paraphrasing the limit drawn at that meeting in Punta del Este, in “the type of society to which [Cubans] were devoted.” In other words, the system itself.

If so, does it means then that it is not geopolitics, but Cuban domestic policy that is the real source of the conflict? Or that, on the other hand, that source has moved from Washington to South Florida? Would it mean, then, that the course of relations depends on how the changes are moving on the island? Or rather from a squad of uncompromising Cuban-American congressmen who keep the antagonism alive?

If an effort were made to understand the present and the future as the flow of a complicated history, and not just like that “bilateral dispute” that some repeat, the first thing would be to identify the basic questions to have a glimpse of the horizon of those relations, behind the opinions that cloud it. What these questions are would require a moment’s pause.


1.      Jesús Guanche, “Etnicidad y racialidad en la Cuba actual.” Temas # 7, 1996.

2.      George Marvin, “Keeping Cuba Libre,” World’s Work, Sept. 1917, p. 553-67.

3.      Memorandum for the President, Dick Goodwin, “Conversation with Comandante Ernesto Guevara of Cuba,” August 22, 1961. Classified SECRET. Declassified on 8/8/94.



Cuba-U.S. relations for beginners (III)

Perhaps the darkest side of the recalcitrant Cuban-American group is not the preaching of hatred or the real damage it may cause to the understanding between the governments of the United States and Cuba, but its capacity to dominate the political culture of emigration.

 by Rafael Hernández

 July 23, 2020

in Opinion

Where did one of the architects of President Kennedy’s main program for Latin America, godfather of the Alliance for Progress, come from in 1961? In what hands did Ronald Reagan (1981-88) and George W. Bush (2001-2008) place their most important offices for the western hemisphere: those that coordinated the contra war in Nicaragua in the 1980s, and in the Department of State during the failed coup against Hugo Chávez in 2002? Who did Clinton and Obama pick for second position in the Department of Defense bureaucracy toward the region? What led George W. Bush to choose his commerce secretary in his second term? What is the reason for President Trump’s proposal for the presidency of the Inter-American Development Bank?

The answers to all these questions have one ingredient in common: it’s a Cuban-American. More exactly, one that is opposed to the government and the prevailing economic, political and social order in Cuba.

Now, if it’s a question of U.S. policy towards the island, what would have to be clarified would rather be to what extent the presence of Cuban-Americans in hierarchical positions within Republican and Democratic administrations proves that this policy is dictated by a pressure group entrenched in Miami. Or seen differently, to what extent the command organs of that great power have been penetrated by some Cuban-Americans who share the same ideological fixation, with the evil purpose of “redirecting” it against the Cuban order.

The previous question could give way to two questions: is the appointment of the aforementioned decision-makers explained by the power of a Cuban-American lobby that represents historical exile? Is it up to these distinguished Cuban-Americans to engage or directly influence Cuba policy? What history reveals is not so. Ernesto Betancourt, a former official at Banco Nacional de Cuba, was already a technocrat for the Organization of American States (OAS) when he was chosen by Kennedy advisers for the Alliance project. Otto Reich had served as a military, business consultant, and administrator in USAID (US Agency for International Development) for the region when he joined the Oliver North team, survived the Iran-Contra scandal, and earned merit to be co-opted again by the Republican diplomacy. Pedro Pablo Permuy and Frank Mora passed the revolving door that gives congressional staffers and professors from military universities access to inter-American positions in the Department of Defense, thanks to the ebb and flow of Democratic administrations. Carlos Gutiérrez was the CEO of Kellogg (the cornflakes one) when he was appointed to Commerce by George W. Bush. Mauricio Claver-Carone held Treasury positions under that same Republican presidency, long before Donald Trump noticed him, not precisely for his anti-Cuban lobbying work in Congress, but during the electoral campaign in Florida, and invited him to the transition team in a Republican administration that had already raised the flag of reversing the entire Obama policy.


Certainly, in the selection of U.S. government personnel to prevent “other Cubas” in the hemisphere, in the 1960s and 1980s, the anti-Castro anti-communist harvest must have had some weight in the Reich curriculum and especially of Betancourt. Surely it was decisive when the director of Radio Martí had to be appointed in the 1985-2000 period, or whoever co-chaired (with Condoleezza Rice) the resounding Commission for Assistance to a Free Cuba, of which, by the way, nothing has been heard again since 2006. In any case, they all served the government that employed them, not as representatives of any Cuban-American lobby.


Until the early 1980s, it never occurred to anyone to argue that the Bay of Pigs, the multilateral embargo also known as a blockade, the October (or Missile) Crisis, the covert operations plan called Mongoose, the insurgency that unleashed a bloody civil war (1960-1965), the impunity of Omega 7, Alpha 66, CORU and other paramilitary organizations in the 1970s or any of the other axes of hostility against the Revolution responded to the power of a Cuban-American pressure group. Rather, they were part of a policy of force, conceived, formulated and applied by the national security command bodies, articulated in the National Security Council, where the decisive levers of that relationship have resided since the beginning of the conflict, above any of the congressional committees.

That, or rather, those diverse Cuban-American interest groups were there when the United States and Cuba sat down to negotiate peace in Southwest Africa in 1988, the migration agreement in 1994-1995, the return of Elián González in 2000, the cooperation in anticipation of an oil spill in Cuban waters, collaboration in the interception of undocumented migrants and drug traffickers between the Coast Guard and Border Patrol, the exchange of meteorological information, and other practices throughout the 1990s and 2000s, including for two Republican terms. They also preceded the exchange of prisoners and the restoration of diplomatic relations on 17D 2014.

All those actions were opposed in vain by that influential Cuban-American lobby that the media in Miami and Havana identify, in unusual coincidence, as an efficient cause of the Cuba policy.

What, then, was (and is) the real power and role of these anti-Castro lobbies in American politics? Their raison d’etre?

Take as a small example the political action committee (PAC) chaired in Washington by Mauricio Claver-Carone since 2003, with the title of US-Cuba Democracy PAC, whose stated objectives have been “the transition to democracy, the rule of law and the free market,” “opposing legislation that prolongs the Castro regime,” “defending the Western Hemisphere against the threats of this regime” and “preparing the next generation of Cuban democratic leaders.”

In its objectives and means, this conspicuous PAC did nothing but follow in the footsteps of the Cuban-American National Foundation (CANF), which emerged 20 years before in the shadow of the Reagan administration, and which patented the formula of “American-style” local politics. In the footsteps of CANF, which incidentally lowered the flag of the embargo in 2009, the formula of the U.S.-Cuba Democracy PAC has consisted, in its words, in “raising funds to distribute in the form of political contributions to candidates nominated to the Congress of the United States and those who oppose any economic measure that, directly or indirectly, finances and prolongs the repressive machinery of the Castro regime and that commit to supporting legislation that seeks to intensify support for the internal opposition movement in Cuba.”


Measured by its deployment on that panel of interest groups and capital flows that interweave the curious fabric of democracy in the United States, this PAC has achieved punctual achievements, as the CANF did before in the domain of the political machinery of the south of Florida. However, not so much in its declared objectives towards the island, that is, to change the regime, defend the hemisphere from its threat (isolate it) and train new Cuban leaders. To put it in baseball lingo, while they have made runs in the American political championship under Republican administrations, they have failed to win a game in the Cuban league.

Now, if it were thought that this game doesn’t find its meaning in the terrain of Cuba here, but that rather it’s a pennant to compete in that of domestic politics there, in particular to dominate that of Florida and influence that of New Jersey, as well as placing itself in the major league of foreign policy towards the region, it would be seen more clearly, apart from its patriotic speeches, that the logic is not so much that of an exile determined to return and take charge of the island at an indefinite moment, but rather to manage a very specific local industry called anti-Castroism, which produces political and financial dividends.

If it were to be imagined for a moment, let’s say that for heuristic purposes, that this recalcitrant Cuban-American group had its hands firmly on the levers of the policy towards Cuba and that its motivations were strictly ideological, then it would not compromise for anything less than the stated requirements in title I and II of the Helms-Burton Act, that is, the surrender and unconditional transfer of decisions, according to its own program of reversal and dismantling of everything established in Cuba.

In other words, this scenario would not be limited to agreeing that everything called Revolution and socialism has been a mistake, a deviation in the course of the nation’s life, and to redeem the parties in a process of reconciliation and mutual confession of guilt and forgiveness, as some imagine in the framework of the possible. On its own terms, it would be a matter of approving those who are going to lead, certifying the rules of a pure neoliberal economy, redesigning security and defense institutions and, of course, recasting the status of relations with the United States and a political system to ensure it.

Regardless of this virtual scenario, and returning to the realm of real politics, perhaps the darkest side of the recalcitrant Cuban-American group is not the preaching of hatred or the real damage it may cause to the understanding between the governments of the United States and Cuba, but its capacity to dominate the political culture of emigration, stigmatize anyone who seeks understanding, preserve anti-Castroism as a pattern of correct-correct political culture, tighten the pegs of a silent majority that prefers normalization, but doesn’t want to get mixed up in problems, as well as to offer arguments to those who, on this side, are suspicious of dialogue with Cubans related to the national interest of the United States. The main effect of this force is to rekindle the anger and mistrust between the Cubans of the island and those of the emigration.

The milestones that this rapid time machine has recovered for our beginners’ chat, and that some connoisseurs seem to avoid when they define the conflict as a “bilateral dispute,” illustrate the role assigned to the “cadres” and the constituency of historical exile for the region. Although in the long run they have been inept for the purposes of the United States’ Cuba policy, they have been instrumental in pursuing their goals in Latin America and the Caribbean.

An example of this is the recent appointment of Claver-Carone as Trump’s candidate for the Inter-American Development Bank (IDB), in order to ensure “the leadership of the United States in important regional institutions and the advancement of prosperity and security in the western hemisphere.” This event also serves as a thermometer to measure the contradictory Latin American situation with respect to the years of the cold war. Although a few governments in the region have already aligned themselves with the Washington candidate, a notable group of former Latin American presidents and former foreign ministers, not exactly related to Cuban ideology, have expressed their joint rejection of the “proposed appointment of a U.S. citizen in the IDB” and their dismay at “this new attack by the United States government on the multilateral system based on rules agreed by member countries.”

This last-minute appointment, obviously not related to relations with Cuba, implies that Trumpism, even if defeated in November, seeks to place in the inter-American system cadres dedicated to continuing America First, a much more threatening prospect for the hemisphere than the vicissitudes of the United States’ relations with the island, which, as is known, is not a member of the IDB, the OAS, or the Inter-American Treaty of Reciprocal Assistance (Rio Pact).

As can be seen, future U.S.-Cuba relations, like past ones, continue to be played in several fields at once, under the already indicated geopolitical arc.

How what happens within Cuba affects the dynamics and the degree to which the Cuban government modifies its policies, including the one applied during the Obama administration, is something much more complex than a struggle over “Obamism” or the supposed Cuban will to “implode” the course of normalization to what is reduced by ideological visions on one side and on the other. Analyzing this geopolitical complexity requires looking further.

Cuba-United States relations for beginners (IV and final)

Most of the agreements signed by Obama have not been revoked, so if Joseph Biden wins the elections, it would be enough to open the drawer where they’re kept.

Rafael HernándezbyRafael Hernández August 6, 2020in Opinion

I remember the afternoon of March 2016 when Eusebio Leal walked Barack Obama and his family through Cathedral Square, under an auspicious drizzle. Old Havana was taken by the Secret Service (the one that appears in House of Cards) and by Cuban Security. Without having anything to do with it, I had been confined to the roof of the Lonja del Comercio, a few steps from the radio station of the Office of the Historian, where a Univisión reporter had summoned me for an interview that turned out to be live coverage about Obama’s arrival in Havana. Trapped with no way out, I thought of Eusebio, who, being already very ill, had to fulfill his duty as host on that very rare unofficial visit by an American president, as a private visitor.

Eusebio Leal accompanies the Obama family on a tour of Havana. Photo: Néstor Martí
From the rooftop of Habana Radio, the Univisión reporter peppered me with questions about the Cuban delegation that walked through the airport’s runway to meet the Obamas: who, why, what does it mean, etc. I was very entertained with her inquisitions, when the presidential car appeared on the monitor screen. “How do Cubans feel when they see the Beast here for the first time here, live?” I don’t know if I looked at it or the camera: “Well, since you mentioned it, you should notice that in this country we are fans of Batman, you can’t imagine how much. The Beast is the same as the Batmobile. So it’s like we’ve known it forever.” It was the only time she laughed, apparently amused. I can’t affirm that the rest of the interview was so exhilarating, because after some of my answers about civil society, the dissidents, the Party, the military, Raúl Castro, she stopped asking me questions, and left me as incorrigible.

As I sat waiting for the curfew to be lifted, watching the Univisión monitor, I imagined what Eusebio would be feeling when accompanying the First Family, and finally leading them to meet his friend Cardinal Jaime Ortega, and thought about the lost hopes of so many venerable Ifá priests, in a neighborhood like Old Havana, ignored by the National Security deputy Ben Rhodes and the team that planned that rainy landing.

To decipher the present of relations under Trump and its future scenarios with the beginners of this conversation, it would be necessary to return to the short summer of Obama in his real political dynamics, including that historic visit, events clouded by certain accepted truths without much thought, here and there.

The main Cuban concession to the Obama government was to have trusted, contrary to the legacy of mistrust accumulated over half a century, that, this time, all the agreements reached were to be maintained, and especially the express will to advance towards the elimination of the multilateral embargo, also known as a blockade. Since the conflict has what scholars call an asymmetric structure, there is no blockade that Cuba can’t lift from the United States, thus it has not demanded, as a condition for progress, a greater opening of trade and financial regulations in that part of the mechanics of the embargo, controlled by the executive, constitute a unilateral Cuban action, lacking reciprocity and an expression of good will—that is, a concession.

 August 28, 2020
Those who compare Cuban policy with that of the People’s Republic of China (PRC) and Vietnam, could verify that these two only reestablished relations, as is logical, when it was agreed to open the locks of economic sanctions, in 1978 and 1995. Cuba followed a different course from the Asian communists, probably calculating the barely 24 months that Obama had left in the Oval Office, so both agreed to start a normalization based on the opening of embassies, a decision applauded almost unanimously by Cubans and non-Cubans in all parts of the world, and that some observers had previously estimated, with a slightly diplocentric vision, as the Gordian knot of the approach.

The second concession was, of course, that historic Obama visit, with extensive coverage by domestic and foreign media. Against the universal diplomatic norm, Raúl Castro was not going to be received in the United States, neither as president, nor as a private citizen, nor as a guest of civil society. If that elementary reciprocity had existed, Obama should have sent John Kerry to the Reagan Airport to receive him, the Cuban embassy in Washington would have filled the Kennedy Center with its friends to listen to his words broadcast live by the main networks, Tom Hanks or Stephen Colbert would have appeared with him on Saturday Night Live or the CBS Late Show, African-American churches would have invited him to an ecumenical service in Meridian/Malcolm X Park, and he would have attended a game between the Orioles and a Cuban team at Camden Yards, at least. Very asymmetrical, that is, another concession.

For reasons of space, I’m going to stay in the third: American, Delta, United, and as many as 14 airlines were authorized to operate in all the Cuban airports that suited them. Cubana would not fly to any U.S. airport, not even Morgantown, West Virginia (29,000 inhabitants). Obviously, the lion’s share of the transportation earnings of the more than 700,000 passengers who began arriving in Cuba each year went to the other side over there.

Now, that short Obama summer produced the largest harvest of symmetrical agreements in the history of Cuba-U.S. relations, for which, as they say, it takes two to tango. As I already pointed out in another conversation, the concretion and implementation of these 23 agreements, over two years, shows that, against the supposed stagnation or “implosion” of this process, according to some, the two parties cooperated and they were negotiating until the end. Most of these agreements, not surprisingly, refer to security topics. Among the most important were consolidating cooperation between the coastguard services in the areas of migration and drug trafficking, search and rescue of ships, air transport security measures, cooperation in law enforcement. Also, the 12 categories of general license to visit Cuba, the commercial airlines service (between several cities on both sides), the license for cooperation in cancer treatment of the Rockwell Institute with the Center for Molecular Immunology, direct postal servicw, the exchange of meteorological and climatic information, among others.

If there was a trickle or slowness in reaching some, it was not because the Cuban stopcock was closed, but because of the reluctance of the United States to adopt certain decisive steps, such as the cancellation of the wet foot-dry foot policy, only implemented in the last days of the Obama administration.

Although the balance of that visit was positive, and aroused the recognition of the majority of Cubans, it was a challenge that the island’s government took on, despite its contradictions. The main contradiction was in its declaration of not continuing the previous policy, affirming that “change in Cuba is a matter for Cubans,” and then, that “normalization with the United States is opening the door to changes in Cuba,” and, according to Rhodes’ script published on the official government site to identify some of the objectives of the visit, to express “his deep disagreement with the Cuban government” on “respect for human rights.”

To say that Trump’s reign has been bad would be commonplace. For Cuba, the earliest and most visible change, the worst of all, was renewed hostility in presidential rhetoric. It’s unlikely, however, that, in relative terms, the island was among the countries most shaken by this hostility, a historical pattern that has become customary. In fact, few have experienced comparable training in bad weather of this magnitude.

So the economic strangulation measures applied since the summer of 2017 were not exactly novel, although they have caused noticeable damage. The only really unexpected one was the closure of the consulates, a blow to families with an effect extended to Cuban-American society, which has remained in limbo for two years after the mystery of the so-called “sonic attacks.” Despite this ongoing damage, rather than collateral, the truth is that the application of Title IV did not trigger the advocated frenzy of litigations; that although the interruption of the cruises did reduce the number of visitors, it did not have a proportional impact on real income, except for a group of Havana paladares and private taxis, not the hostels or the rest of the country; that commercial airlines have never interrupted their flights, although the number of visitors fell significantly, but not to the extent anticipated, and even grew among Cuban-Americans, until COVID-19 made its appearance.

The logic of this new boom in Cuba-U.S. hostility, as occurred before with the Sandinista Revolution and the Central American wars, at the end of the Carter administration and especially Reagan’s, has not been merely electoral, but geopolitical. To put it bluntly, Venezuela is at the main vertex of this offensive; and Cuba is rather an angle of the triangle. Its drive doesn’t respond so much to the ideological banners raised in the speeches, to the irrefutable overflow of Trumpism, or to the Miamization of Cuban politics in the United States, but rather to specific, very concrete goals, with a certain rational foundation: the overthrow of Chavism. Cuba is punished for supporting it. Looking no further into that political reason, and seeing it as a way to overthrow the Cuban government, has been nothing more than a dream of that reason, which has spawned monsters and now grotesque characters, but nothing more. As they say, it’s not for real: end of story.

On the other hand, suppose this hostility dictated by geopolitical perceptions of Venezuela is going to vanish because certain officials (Bolton, Claver-Carone, etc.) have left or are leaving, chosen (and then fired) by an inner circle that outlines policy, reflects a reading that confuses the formulators of this strategic vision with those in charge of its staging.

To consider that this administration has had something good for Cuba is an oxymoron. However, not everything has been disastrous or useless.

Its pure and hard countenance resembles more the historical nature of that policy, a lesson that survives the big smiles of Jimmy Carter or Barack Obama. As argued in other texts in this series, it’s not about personalities, but about a pattern of interests and an established geopolitical logic. Nothing exceptional for those of us who live down here, and that is repeated, by the way, between large and small neighbors almost all over the world, regardless of their political regimes and even ideological affiliations.

President Donald Trump delivers his speech at the Manuel Artime Theater in Little Havana, in Miami, on June 16, 2017. Photo: Cristobal Herrera/EFE.
Although some observers have attributed to it the effect of rekindling the embers of recalcitrant anti-Castroism in Miami, perhaps no previous policy has caused greater direct damage to the interests of the supposed electoral base of that anti-Castroism, that is, to the Cuban-American community. Thus, it has marked the differences in interests between Cubans on both sides, on the one hand, and the mechanics of hostility, on the other. This context is conducive to a leap forward in national policy towards immigrants, totally unrelated to the vicissitudes of bilateral relations, and even against them, and which the Cuban government has pending as part of the internal reforms it is committed to. If this leap occurred under Trump, no one could later attribute it to the influence of a friendlier U.S. president, or read it as a hostage to relations with the North. All the more reason why the meeting dedicated to the topic, scheduled for April this year and postponed because of COVID-19, was no longer continued to be left for later.

The Trump stage has also served to test, once again, the hypothesis that some defend (without evidence), that U.S. policy would change in response to the advance of internal changes on the island. It did not happen before, when the Armed Forces were halved and economic measures were adopted in 1993-96 that we know of. Nor between 2017 and 2020, when larger-scale changes occurred, such as the forming of a new government, approval of a new constitution with legitimization of private enterprises, and an unprecedented emphasis on decentralization, market expansion, the start of a reformist legislative program, expansion of the quality and access to the internet, as well as public debate and the freedom to exercise political criticism, not forgetting the most recent measures adopted in the wake of the pandemic, return of the dollar, etc. Seen in the mirror of American politics, they are all invisible; rather they would seem to have fueled its fury.

As noted in another conversation, despite the punch attributed to Marco Rubio, Bolton, Claver-Carone, and other recurring characters in the mechanics towards Cuba, most of the agreements signed under Obama have not been revoked. So, if Joseph Biden wins the elections, it would be enough to open the drawer where they are kept, since only four have not been implemented, and one is pending congressional approval; while the remaining 16 have resisted virulence of the past three and a half years. The only category of travel removed has been people-to-people, plausible not just for visitors from over there, but for most Cubans today, including the government. A nod from him would be enough for the check-up and exchange meetings of the two parties to resume, and for the diplomatic personnel withdrawn from both sides to return to their posts. I say: has anyone heard of “sonic attacks” reported in the past few months? Now that we’re all hanging around with masks, that would seem like a pale ghost in the midst of this real health threat.

Unlike previous stages, when think tanks such as Inter-American Dialogue, Rand Corporation, Americas Society, Council on Foreign Relations or Brookings competed for a draft strategy to deal with Cuba, none would be able to overcome the structured plan that Obama (and Susan Rice) left ready, entitled Presidential Policy Directive–United States-Cuba Normalization.

Several questions about the future remain in the pipeline. How important would Cuba be to a Democratic administration? To what extent would the Venezuelan question be channeled in another way? Would Trumpism survive without Trump on certain issues, such as migration, relations with China and Russia, policies at multilateral organizations? To what extent would the meetings between the two societies recover, to serve as a basis for relations that would promote those values that over there are ​​called free trade and freedom to travel?

Perhaps some ideas raised in these conversations with beginners could be useful to think these and other questions, such as, for example, not to confuse the analysis and understanding of the policies of both sides with personalities, opinions and each one’s desires, likes and dislikes, nor to believe that cursing a policy helps to understand which road it will take.

Of course, peace with the United States would favor the socialist transition in Cuba. Preventing that peace from being completely extinguished, and minimizing the enormous human, social and political costs of the conflict, are a central part of the national interest. At the same time, channeling the present and consolidating the future of that transition on the premise of that peace would lack realism. To what extent and how to move forward so that the changes and goals are not mere hostages of this uncertain relationship involve larger problems that deserve a further look.

What to Make of Cuba’s Planned Economic Reforms?


CUBA REVIEW: What to Make of Cuba’s Planned Economic Reforms?




Cuba announced sweeping (and long-awaited) economic reforms to attract foreign currency and boost national productivity


“Cuba said on Thursday it will allow some stores to sell food, personal hygiene and other consumer goods in U.S. dollars and will eliminate a 10% tax on the greenback, an effort to rake in more hard currency to purchase goods abroad. It is one of a list of reforms the Communist government said it would detail and implement in the coming months such as the expansion of the private sector that Economy Minister Alejandro Gil termed necessary to face an ‘exceptional situation,’” during the evening broadcast of Mesa Redonda on state television. (Reuters, July 16, 2020)
A response to crisis: "Cuba, which monopolizes retail and foreign trade, faced a liquidity crisis even before the coronavirus pandemic shuttered tourism and hit other revenue earners with the implosion of ally Venezuela’s economy and the tightening of the decades-old U.S. trade embargo under President Donald Trump. Pandemic fallout has worsened shortages of food, medicine and other goods and long lines at retail outlets. Cuba’s economy is forecast to decline nearly 10% this year after stagnating in 2019.” (
Reuters, July 16, 2020)
"We cannot continue to do the same thing in our economy, because we won’t obtain the results we need", said Cuban president Miguel Diaz-Canel during an “extraordinary session” of the Council of Ministers that preceded the Mesa Redonda broadcast.
In his appearance on Mesa Redonda, Minister of Economy and Planning Alejandro Gil assured that the reforms approved on Thursday “are aimed at eliminating obstacles that operate in the economy, while maintaining and defending the concept of central planning.” (OnCuba News, July 16, 2020)
The new economic strategy, approved last week by the politburo of Cuba’s Communist Party (PCC), is based on economic and social development documents approved during the VII Congress of the PCC in 2016. According to Gil, the following principles will guide the new strategy: “1) Maintain centralized planning (which, he clarified, does not mean centralized allocation of resources); 2) Depend more on national production and banish the import mentality; 3) Regulation of the market by mainly indirect methods; 4) Complementarity of the different economic actors (state and non-state, all together); 5) Dynamic role of internal demand; 6) Give state companies greater management autonomy so that they are efficient and establish similar rules of the game for all forms of economic management; 7) Implement ‘key aspects already approved’ on the various forms of ownership ("resizing" of the state sector, non-state management, etc.), 8) Promote competitiveness, savings, increased efficiency and motivation for work through incentives, and 9) Maintenance of an active environmental policy that corresponds to the social model.” (
Blog de Mauricio de Miranda Parrondo, July 17, 2020)
Gil “emphasized that the principal focus is on food production, where he identified the need to eliminate many subjective problems related to financing structures and marketing flexibility…Another purpose is to fortify the autonomy of socialist state companies. Gil stated that they seek to boost efficiency and create conditions for management to have a higher level of decision-making authority on business decisions.” (OnCuba News, July 16, 2020)
Included in the strategy is “the design of micro, small and medium-sized enterprises [MSMEs] in the private, state and mixed sectors. “[Gil] explained that these will not come into operation immediately, but that they were in development. Another important measure stressed by Gil ‘lies in the work so that non-state forms of management can import and export their products�Work will allso be done to encourage foreign direct investment, especially in food production.’ Gil also stated that self-employment will be improved, expanded and promoted by cooperatives. For this, the granting of licenses will become more flexible, and stressed that conditions will be created so that non-state forms of management can export and import.” (OnCuba News, July 16, 2020)


Cuban economists reflect on new economic measures and their potential impact


Julio Carranza: “the measures presented today are not the only ones necessary, the reform process is supposed to continue.” But what has been decided is an important step in the right direction, and part of what several economists have been proposing for a long time: food production has been prioritized, and its forms of agricultural production and marketing will be loosened and decentralized; foreign trade operations are authorized to all economic agents; the reform of the state company begins with greater decentralization; micro, small and medium-sized companies with all forms of ownership and management, including private and cooperative, will be legally recognized, etc.” (OnCuba News, July 16, 2020)
Omar Everleny Pérez: “These are laudable principles�but must be translated into concrete results. What the Cuban president announced must be realized: we cannot continue doing the same in the economy. And I wonder: do we need to keep thinking about how to do it? Isn't it about time to recognize a path more successful than ours, the one taken by Viet Nam?” (OnCuba News, July 18, 2020)
On the continuation of central planning�with decentraliized resource allocation
Pedro Monreal: “It was said quickly and as if ‘flying under the radar’, but the most intrepid idea expressed at the July 16 Mesa Redonda was what appears to be the replacement of the traditional concept of ‘central planning’ in Cuba�It is said to no longer consist of centrallized administrative allocation of resources. As is known, the only other way to allocate resources in an economy is through the market, with prices playing a key role�We can assign narrative ornaments tto the mutating notion of central planning, but that will not change the essential: if allocations are not directed by a central bureaucracy, then they have to be made by the market�With a relatively llimited percentage of direct control over the country's economic assets, the state would control the pace of economic growth and the direction of the development process. It is not a ‘grand’ vision of socialism, but that type of system works in practice in China and Vietnam. I am not making a value judgment here on the reform of those two countries, much less suggesting that any model be copied. I simply note that it is feasible.” (
El Estado como tal, July 17, 2020)
On the prioritization of national food production and marketing flexibility
Monreal: “This is, by a wide margin, the most relevant of the measures announced yesterday. It ‘certifies’ what has been said in recent months about comprehensive agriculture reform, which includes the many links in the process. Important components were mentioned such as changes in the structure of the Ministry of Agriculture, reform of state agricultural companies, changes in relations between state companies and non-state actors, price-setting, elimination of non-payment to producers, simplification of distribution chain, facility of exporting and importing ‘directly’, and credit support through a specialized agricultural development bank. One component that will need to be closely monitored is that of state monopolistic functions, which should not be allowed. The ‘contact surface’ of this measure is very wide and in fact has the capacity to function as a ‘catapult’ for other measures, mainly those related to the increase and diversification of exports, the establishment of wholesale markets for means of production, and the establishment of micro, small and medium enterprises (MSMEs). (
El Estado como tal, July 17, 2020)
Mauricio de Miranda Parrondo: “Some elements that would support this would be: the creation of an Agricultural Development Bank, liberalize the marketing these types of products, the promotion of sugar agribusiness, compliance with the collection and payment systems and the transformation of state companies of the sector. My observation at this point is that it is essential to create all possible mechanisms to stimulate food production. It is inconceivable that the country cannot secure with its own production most of the food it consumes�No one knows better than the peasants what they can andd should produce. The agrarian policy must be oriented to incentivize production so that by satisfying the needs of society the peasants satisfy their own interest.” (
Blog de Mauricio de Miranda Parrondo, July 17, 2020)
On the diversification of economic actors who can import and export
Monreal: “A very important measure, especially for agriculture because this is the sector that has the greatest potential to offer exports in the short term. A productive base managed mainly by private and cooperative actors, the establishment of incentives and facilitating measures could expand national export assets to a degree that no segment of the non-state sector could do in the immediate term. The measure is established, however, with a caveat that represents an obstacle. Strictly speaking, non-state actors do not need to export through state companies. What they need is to count on state support (such as a chamber of commerce, consulting, information, training, quality control regulations, credits and insurance) and the services of companies (state or not) specialized in channeling exports (freight forwarders, customs agents and logistics operators ) that are in charge of intermediation between national producers and foreign importers. It is also very ‘rare’ for the export price to be established by contract between a national producer and a state company. Both this obligation to export through state-owned companies and the price mechanism do not have a clear economic rationale. It seems to be an administrative ‘shortcut’ to prserve the state’s monopoly over foreign trade�In principle, a private mango producer could even export througgh the website of a distribution giant such as the Chinese company Ali Baba. That works everywhere, I don't see the reason why it couldn't work in Cuba.” (
El Estado como tal, July 17, 2020)
Parrondo: “Non-state companies may carry out foreign trade activities (exports and imports) through contracts with state companies designated for this purpose. In my opinion, this is an inadequate measure because any company, be it state, mixed, cooperative or private, should have the power to export and import freely without the need to go through ‘screening’, much less pay a ‘toll’, which means payment for the services of the Ministry of Foreign Trade and Foreign Investment entity that will be actually doing the exporting or importing. In reality, under these conditions, the State maintains a monopoly on foreign trade, which has proven to be ineffective. Although it is said that these tasks will be carried out through contracts, it is known that if only the State can be contracted, it will be the State that will impose the conditions, so the contracts will not be established on an equal footing.” (
Blog de Mauricio de Miranda Parrondo, July 17, 2020)

On the establishment of micro, small and medium-sized enterprises (MSMEs)
Monreal: “Interestingly, the measure has been presented as a ‘combo’ by mixing private and state MSMEs. I'm not saying it's not possible to operate a state MSMEs. I suppose that they would have to be of municipal subordination. The measure could include both forms of ownership. I don't have a big problem with that, but it is worth drawing attention to three things: it is not exact to say the scale of a private MSME can equal that of a state MSME. There are differences in legal and support needs that must be considered. Second, the reason why the state should deal with assets that are generally of low productivity is not clear. The exception could be state MSME in areas of innovation. Finally, there are notable asymmetries between the starting point for establishing state and private MSMEs. While today there are cuentapropista activities that could be legally transformed into MSMEs and that already work with a devalued [CUC/CUP] exchange rate (1:24), state MSMEs are already legal and, working with an overvalued rate of 1:1, live in 'another economic planet'�In the case of Cuba, the agro-foood sector is where there seems to be the greatest potential for doing MSMEs in the immediate term.” (
El Estado como tal, July 17, 2020)
Parrondo: “There was a lot of emphasis that [MSMEs] would not only be non-state, but also state and mixed. On various occasions, several economists have written about the need to enact a Enterprise Law that regulates the creation of companies with their own legal personality, regardless of the type of property. The most important thing is that both the legal framework and the tax system are the same and do not privilege one type of property over the others.” (
Blog de Mauricio de Miranda Parrondo, July 17, 2020)
On the promotion of non-agricultural cooperatives (NACs) and expansion of self-employment (cuentapropismo or TCP)
Monreal: “It is probably the measure that most Cuban economists I know have suggested for the longest time. The NACs represent the most underutilized non-state organizational form in the country and self-employment, despite its importance in the creation of net employment in the last decade, has institutionally evolved little and is one of the most restricted areas of the economic system. Not many details were given. Only that the current NAC experiment is going to be ‘terminated’ (a kind of limbo) and that from now on NACs ‘will be promoted’. Regarding the self-employment, it was announced that ‘the way it is authorized would be transformed’ and that it would be ‘made more flexible’ and that the mechanism would be changed so that ‘there is not as much detail as to their activities.’ A short-term problem is that a high percentage of self-employment licenses include activities related to tourism and travel-related supply networks, making it a sector in a crisis whose end is difficult to estimate. Expanding licenses to other activities with other types of demand would undoubtedly help to provide jobs and income, but that would not solve the crisis in other segments of self-employment and possible measures were not mentioned on that point.” (
El Estado como tal, July 17, 2020)
Parrondo: “This ends the long and incomprehensible ‘experiment’ of cooperatives, which suggests that the creation of new non-agricultural cooperatives will be promoted. Greater flexibility and expansion of self-employment is announced. Will it move from the current system of permitted economic activities to one that allows everything that is not expressly prohibited? One of the issues that caught our attention was the statement by the Minister of Economy that these measures ‘are here to stay.’ One of the biggest problems of the Cuban economic organization, especially since the 80's, has been that the economic changes have taken place in moments of very acute crisis (and this time it is) and when that deep crisis is overcome (without a bonanza is reached that in reality has not existed in the last six decades), then the reforms are paralyzed, centralization is strengthened and the economy of ‘command and control’ is strengthened. The ‘command-and-command’ economy does not have a promising future. It has only shown itself incapable of promoting development or ensuring the well-being of society.” (
Blog de Mauricio de Miranda Parrondo, July 17, 2020) 

On the establishment of a wholesale market in MLC (freely convertible foreign currencies) and the expansion of “MLC stores”
Monreal: “This measure could have a notable impact in the short term, especially in agriculture. Two comments on it: first, establishing a dollarized circuit will segment the national market and therefore there must be a strategy to ‘de-dollarize’ at a later stage. Secondly, the irrationality of having to operate in foreign trade through a state company, in this case to import, also applies here. Anyone with enough money could import a tractor today, with choice of brands and features, directly from a website.” (
El Estado como tal, July 17, 2020)
Parrondo: “A few days ago, a measure was rumored that sparked concerns and criticism in various media and was the decision to increase the assortment of products that would be sold in stores that could only be operated with freely convertible currencies (MLC). Initially, these stores were created due to the general shortage of foreign currency in the country and the conversion, in practice, of the convertible peso (CUC) into an overvalued currency because its level of circulation far exceeds parity with its support, the US dollar. Thus, officials decided to allow the creation of bank accounts in MLC transferred from abroad so that natural persons could acquire these ‘high-end’ goods through the use of electronic cards. Now [MLC stores] will not only offer ‘high-end goods’ but also food and hygiene products that, incidentally, are is serious short supply amid the pandemic. It is logical that they are scarce because a good part of these products are imported, because they are not produced in the country ­� mainly because the economic system has not only not gennerated the necessary incentives but has even destroyed them. If we add to this that, due to the pandemic, international tourism has decreased to zero, the income in foreign currency that Cuba has had in the last four months must have been very scarce (unfortunately, the Cuban government does not make periodic reports on the main variables of the economy and the external financial situation of the country is still considered a state secret). (
Blog de Mauricio de Miranda Parrondo, July 17, 2020)
On the partial dollarization of the economy
Monreal: “There is a ‘cross-cutting’ issue for which measures were not announced in the immediate term: monetary and exchange rate unification. The implication is that at the future moment when the CUP is devalued at its official rate, many parameters of the economy will change and with this the impact of those measures that are beginning to be applied now would change, but I suppose that has been considered in the plan�The partial dollarization on whiich the scheme is based could alleviate a worsening balance of payments, but the accompanying economic fragmentation creates inefficiencies and is not compatible with the model described in the reform's guidance documents. In this sense, partial dollarization must be assumed as a necessary and transitory ‘evil’ and therefore must be accompanied by a de-dollarization program to be applied at a future stage of the process�Special attention should be given to measuring the distrributional effect of measures, that is, their possible impact on inequality.” (
El Estado como tal, July 17, 2020)
Parrondo: “Although they do not want to admit it, we are in the presence of a partial dollarization of the economy and that dollarization implies the operation of a market in MLC (of which the most frequent is the US dollar) in which access requires cash transfers from outside, that is to say that with the income from work you cannot access those goods that under the conditions of any normal country would be sold in the country's national currency. The prices of goods offered in that market are dollarized, but the wages of the workers are not dollarized. From an economic point of view, it seems a measure of imperative necessity due to the near absence of foreign exchange alternatives, but from a political point of view, it is a fatal measure because it further deepens social inequalities that are not driven by differences in productivity or professional and technical training or even willingness to work, but are motivated by whether or not one receives remittances from abroad. Almost thirty years ago, a similar system was tried, which in the end did not give adequate results because it deepened inequalities for the same reasons and also inverted the social pyramid.” (
Blog de Mauricio de Miranda Parrondo, July 17, 2020)
On attracting Foreign Direct Investment
Parrondo: “It is known that FDI is a fundamental variable in any strategy aimed at promoting national production because it provides fresh capital resources and knowledge transfers, and also connects national production to international value chains. China and Vietnam managed to strengthen their economies, positively change their productive structures, improve their international standing, and increase the well-being of their respective societies (even though they are still far from being democratic and pluralistic societies) largely thanks to encouraging unrestricted FDI. The FDI authorization system in Cuba is still excessively discretionary, concentrates on a specific portfolio, and requires long and complicated procedures. However, in order to promote FDI, it is essential that the rules of the game be transparent, that judicial and arbitration systems be truly independent from government, and that there be effective mechanisms for controlling corruption embodied in a transparent, effective and open institutional system.” (
Blog de Mauricio de Miranda Parrondo, July 17, 2020)

For more analysis, read OnCuba's Sunday
interview with Cuban economists on the announced economic reforms.



Facing crisis, Cuba calls on citizens to grow more of their own food


“Food security has lately risen to the top of the national agenda in Cuba, with countless news headlines and televised roundtable discussions dedicated to the topic. ‘Cuba can and must develop its program of municipal self-sustainability definitively and with urgency, in the face of the obsessive and tightened U.S. blockade and the food crisis COVID-19 will leave,’ José Ramón Machado Ventura, 89, deputy leader of the Cuban Communist Party, was quoted as saying by state-run media on [June 29th]. The Caribbean island imports roughly two-thirds of the food it consumes at a cost of around $2 billion annually, in addition to key farming supplies like fertilizer, machinery and animal feed. But imports have nosedived in recent years as aid from ally Venezuela shrank following its economic implosion and U.S. President Donald Trump tightened the half century-old U.S. trade embargo. That led first to shortages of imported food and then to drops in national agricultural production. Output of Cuban staples like rice, tomatoes and pork fell 18%, 13% and 8% respectively last year, according to data released this month. The coronavirus pandemic, which has paralyzed the key tourism sector, has only exacerbated the situation.” (Reuters, June 29, 2020)


WASHINGTON D.C. � The Cuba Study Group issued the following statement in response to the economic measures announced on Thursday, July 16, 2020 by the Cuban government:

Facing its greatest economic crisis in thirty years, the Cuban government last week outlined the parameters of a new economic strategy, involving significant steps toward market liberalization. Some measures, like the immediate expansion of sales of goods in U.S. dollars to the population, are controversial and will only directly benefit a small portion of Cuban consumers. Others—like a commitment to expanding the parameters of “self-employment,” transforming the commercialization of agricultural products, and legalizing micro, small, and medium-sized enterprises (particularly in the private sector)�are welcome steps that have the potenntial to set the country on a path to more sustainable growth.

We, like many Cubans, eagerly await the details of new regulations to fully assess their implications. Both the timing of their rollout and follow-through upon implementation will be key. Cuban President Miguel Díaz-Canel and Minister of the Economy and Planning Alejandro Gil Fernández have now committed their government to fulfilling, and in some ways exceeding, the program of economic reform approved by their predecessors, but frozen due to internal resistance in 2017. Importantly, they have also stated that coming reforms�with the exception of hard-currency sales are not temporary measures to get through the presennt crisis. In the words of Minister Gil, “everything we are doing to confront this scenario�is here to stay.” This is encouraging. However, we harbor concerns that these measures are being taken without a clear, corresponding acknowledgement that they are overdue and necessary for a well-functioning economy. The problem is not just the crisis, but an outdated economic system in need of fundamental market reforms. To that end, these measures would represent a welcome first step in transforming Cuba's economic model so that it lifts the Cuban people from the economic hardship they have endured for so many years.
Admirably, Cuba appears to have conquered the worst of the Coronavirus pandemic, outperforming regional and many first-world peers. But the pandemic has also exposed deep structural flaws in the Cuban economy, like an overreliance on tourism, an insufficient domestic productive base, and import dependence. It should not have taken a global economic crisis to prompt the government to commit to steps that the best Cuban economists have long insisted were necessary. But now that it has, Cubans at home and abroad will be watching closely, and their expectations will be high. So will Washington. Indeed, in addition to improving the welfare of the Cuban people, steady progress on internal economic reform can also create a propitious environment for returning to a more constructive relationship with the United States after November 2020. Nothing less that the well-being and future of the Cuban people is at stake.


Ricardo Torres Pérez, Professor of Economics and Deputy Director of the Center for the Study of the Cuban Economy (CEEC) at the University of Havana.
CDA: What are the main takeaways from Cuba’s announcement on Thursday? Why was the announcement made now? What is unique about the current moment?
Ricardo: There are two main processes that will gain traction in the near future. On one hand, a further advancing of dollarization, which is expected given the dire state of Cuba’s external finances. On the other hand, the expansion of the private and cooperative sectors. It has to be seen whether this time dollarization is used as a mere revenue source or as a vehicle for structural transformation of the economy. The expansion of the private and cooperatives sectors is in line with meaningful economic restructuring.
The pandemic exacerbated economic problems to a point something radical had to be done. These difficulties made possible otherwise politically unfeasible reforms, like many other times in the past. And the government can well say it’s only fulfilling the mandate from the VII Party Congress.
It’s good to hear that they want to do as much as possible simultaneously. The situation is very serious, the world economy is also in trouble, society is not as homogenous as it was back in the nineties, and the government does not take its legitimacy for granted. The only way out: looking inwards and dealing with its domestic mess.

CDA: Cuban economist Pavel Vidal predicts that Cuba’s GDP will shrink 10 percent in 2020 and continue shrinking in 2021. What do you believe will be the tangible impact of these measures on the economy? What do you think is missing?
Ricardo: Dollarization may allow the government to collect much needed foreign currency to ease balance of payments tensions. However, other sources of revenues will remain depressed for the time being. The expansion of the private and cooperatives sectors is a welcome move, but its impact will be felt mostly in the medium and long terms. Lack of domestic demand and scarcity of inputs will inhibit robust growth in those sectors.
We need to wait for details and implementation. I think radical restructuring of state companies is critical. Most are very inefficient and a drag on the economy. That would be another way for the government to save hard currency and divert it to more promising projects. We do not know yet the details of the much anticipated “National Development Plan 2030” but given the new global scenario, Cuba needs to rethink its economic strategy. For instance, the coming years will be tough for international tourism.
CDA: What are the most relevant changes for the development of the private sector? What types of licenses, professional services, and non-agricultural cooperatives do you think should be prioritized?
Ricardo: It’s encouraging to see how we moved from stopping the issuance of new licenses in critical activities for over a year to the current situation. So far, the possibility of engaging in foreign trade and the access to a domestic wholesale market are steps in the right direction, albeit only in foreign currency. I anticipate more flexibility and more categories to set up businesses. I think it’s time to allow talented Cubans to enter more sophisticated activities; that’s been one of the handicaps of the private sector since the early nineties. IT, consultancies, design, architecture and other creative industries are promising areas. Cuba is much more than just beaches, restaurants and salsa.
The challenge will be to create enough higher quality jobs not only to curb emigration but also to help the restructuring of the public sector and curtail the expansion of the informal economy. Today, almost 35 percent of the working age population lack a formal job.  
A critical factor is to convince the population and relevant foreign actors that this time the change is permanent. It seems that every 3 or 4 years the Cuban government has second thoughts about reforms. We know investment levels are suboptimal when uncertainty is dominant. It does tremendous damage to the economy.
CDA: Cuba announced the elimination of the 10 percent tax on U.S. dollars. Do you see this as a move toward currency unification? Why or why not? Many Cubans do not have access to tradable currencies or remittances. How will the new stores which only accept hard currencies impact inequalities for Cubans across the island?
Ricardo: Partial dollarization and currency and exchange rate reforms are connected but different processes. Authorities stated that a monetary reform is going to happen in the near future. Cuba’s trouble is that it has two national currencies and neither is convertible.
The dropping of the 10 percent tax is helpful because it eliminates an unnecessary distortion in the determination of the market price of the US dollar. It actually created a huge informal market and deprived the government of valuable revenues for more than 15 years.
A big problem with the advance of dollarization right now is that there is no mechanism to buy foreign currency in a formal market. Neither the CADECAs (state-owned currency exchange offices) nor the banks are selling hard currency. People’s access to foreign currencies depends on remittances or the informal market. Tourism is down now. We may well see workers demanding their companies to pay bonuses in hard currency, at least in the export and travel industries.
Inevitably, like in the nineties, this move will exacerbate inequalities. And that’s something very sensitive and clearly the government does not feel comfortable with the situation. Economic differences will rise in an already unequal society. 
CDA: How will current U.S.-Cuba policy impact these proposed reforms?
Ricardo: Economic restructuring needs resources. Some industries die and others rise. The current U.S. policy aims at curtailing Cuba’s access to foreign cash, making the process more painful than it otherwise would be. Without foreign clients the private sector will have a hard time setting and growing new business. The same applies to foreign trade. If permanent, the reforms are a smart move. The state is retaking the initiative and giving a blow to those who say that under attack, the only option is to go conservative.
Today, confrontation between the West and China is becoming the norm, isolation and punishment will only push Cuba to whichever country offers a lifeline, Russia, China and so on. It will be very disappointing to see a repetition of the Cold War, with Cuba and the U.S. in opposite camps.