CUBA CENTRAL NEWS BRIEF: White House Decision-Making: Policy and Politics

Policy debates should be decided on the merits.

But U.S. policy toward Cuba has long been held hostage by politics. We may soon see that grasp loosen. In the critical weeks before the administration’s new Cuba policy is finalized, we are seeing the political winds in favor of normalization picking up as the White House’s policy review has reached a stalemate.

Engagement Matters

During the early stages of the White House Cuba policy review, federal agencies assessed that policies of engagement have been positive for the U.S. Over the past two years, U.S.-Cuba cooperation on issues of mutual concern, including counter-narcotics, scientific and medical research, and combatting human trafficking have been, without question, win-win.

Take this as an example: The State Department reports the U.S. Coast Guard and Cuban authorities “share tactical information related to vessels… suspected of trafficking and coordinate responses…” Though it seems unremarkable for maritime neighbors to coordinate in these ways, it is only via policies of engagement that we are able to do so.

American farmers, security experts, and a growing number of advocates for engagement in Congress are making their voices heard, as Peter Kornbluh wrote this week in The Nation. A report released this week by Engage Cuba, and co-signed by CDA, shows that reversing course on Cuba policy could have serious economic consequences for the U.S., putting more than 12,000 jobs at risk and costing the U.S. economy $6.6 billion over 4 years.

The damage of rolling back Cuba policy reforms would also extend across the Florida Straits, including to the 500,000 Cuban entrepreneurs whose businesses have flourished because of increased contacts with the U.S. As 50 Cuban entrepreneurs wrote in a letter to then-President-elect Trump last December:

“Reforms made by the U.S. government to allow for increased travel, telecom services and banking have helped substantially as we attempt to grow our businesses. An influx of American and Cuban American visitors stimulates growth for our businesses, directly and indirectly… Increased interaction and business dealings with U.S. travelers and U.S. companies has had important economic benefits, the exchanges of ideas and knowledge, and offered much hope for the future.”

It would be truly unfortunate if politics drove the White House to a policy decision that would have deleterious effects on people in the U.S. and in Cuba. What of the Cuban-developed lung cancer vaccine that holds promise for U.S. patients, currently undergoing clinical trials in the U.S.? What of the marine scientific cooperation that helps protect U.S. Gulf Coast fisheries and shores? Clearly, there are plenty of reasons to continue normalizing relations with Cuba.

Politicking

Enter politics to muddy the waters: At least one Florida politician is reported to have been back-room dealing to trade support for the president’s domestic policy agenda in exchange for imposing a host of restrictions on travel and commerce intended to strangle U.S.-Cuba ties.

But the politicking has not been decisive. The White House is undecided about Cuba policy, reports the New York Times, with many senior officials privately agreeing that the current policy of engagement has been positive. The announcement of the administration’s new policy was originally slated for May, but has now been pushed back to mid-June at earliest and may be punted further, as Reuters reports.

Congressional Momentum

The political clout of Florida lawmakers who oppose engagement may yet be considerable, but by the numbers it is diminishing. Members of Congress are increasingly aligned with the views of their constituents, farmers, and businesses. Last week, Senator Jeff Flake (AZ) reintroduced legislation to lift ban on travel to Cuba with a total of 55 bipartisan senators as original cosponsors. Bipartisan bills to lift the embargo entirely are pending before both chambers.

There are even budding signs of a sea change from South Florida lawmakers, a group that has historically been unwilling to entertain any type of compromise on Cuba policy. This week Rep. Carlos Curbelo (FL-26) expressed support for a compromise on Rep. Crawford’s (AR-01) bill, which would allow private financing of U.S. agricultural sales to Cuba while levying a fee on such transactions to pay certified claims against Cuba’s government for the confiscation of properties following the Revolution.

Creative compromises like this may not satisfy everyone, but this type of dialogue brings stakeholders to the table and advances discussion about a path forward.

Policy will never be devoid of politics, but the administration’s current impasse and the growing bipartisan chorus of pro-engagement voices in Congress give us hope that the merits of normalizing relations with Cuba will be considered seriously by this White House and policy makers in years to come.

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This week, in Cuba news…

U.S.-Cuba Relations

Cuban officials: U.S. policy change could increase human trafficking

In response to the flurry of news suggesting that the Trump administration has nearly completed its review of U.S.-Cuba policy, officials from Cuba’s Interior Ministry spoke to Reuters about security risks, including a resurgence in human trafficking, that could stem from a return to a policy of isolation.

According to ministry officials, trafficking from Cuba to the U.S. dropped precipitously after the two countries signed a Memorandum of Understanding on cooperation in law enforcement, including trafficking of persons, in January 2017. However, the halt in dialogue between the two governments since President Trump’s inauguration has reportedly allowed human-trafficking perpetrators to regroup and explore new methods of smuggling.

Reuters also reports that at a meeting of U.S. senior officials earlier this month, representatives from the Justice Department and immigration services advocated for continuing law-enforcement cooperation with Cuban counterparts. Earlier this month, the Wall Street Journal reported that the U.S. Coast Guard interdicted no Cuban migrants in the month of April, the first such occurrence in seven years. Coast Guard officials attributed the drop to the Obama administration’s January 12 decision to rescind the preferential “wet foot, dry foot” policy for Cuban migrants, a decision that came after months of negotiations between U.S. and Cuban officials.

In March, Cuba released an “action plan” for addressing trafficking in persons. Last month, Dr. Maria Grazia Giammarinaro, a United Nations Special Rapporteur on trafficking in persons, conducted a five-day visit to Cuba, at the invitation of Cuba’s government, to examine human trafficking and prevention efforts on the island. Dr. Giammarinaro presented her initial findings at a press conference in Havana, saying that Cuba’s social welfare system reduces the country’s vulnerability to trafficking, but that Cuba’s legal framework for preventing and prosecuting human trafficking needs improvement, as Reuters reported at the time. Her complete findings and recommendations will be featured in an official report to the UN Human Rights Council next year.

In 2015 and 2016, the State Department placed Cuba on its Tier 2 Watch List for trafficking in persons. The 2016 Trafficking in Persons Report found that Cuba has made significant strides to comply with minimum standards set forth in the Victims of Trafficking and Violence Protection Act of 2000. Cuba was designated as Tier 3 from 2003 to 2014.

In Cuba

Cuba’s National Assembly approves 2016 Communist Party Congress private-sector reforms, reaffirms one-party political system

Cuba’s National Assembly has unanimously voted to approve documents loosening regulations on private businesses while reaffirming Cuba’s commitment to communism, Reuters reports. In a June 1 special session presided over by President Raúl Castro, Cuba’s parliament passed two documents, the “Conceptualization of the Cuban Economic and Social Model of Socialist Development” and “Guidelines of the Policies of the Party and the Revolution for the 2016-2021 Period,” produced during the April 2016 Congress of the Communist Party of Cuba, mapping the country’s economic, political, and social course for 2016-2021. Documents stemming from Cuba’s party congresses serve mostly to signal the policy intent of Cuba’s government for the ensuing five-year period, rather than holding real legal force.

During the 2016 congress, President Castro criticized the slow adoption and implementation by Cuba’s government of measures dating back five years to update the country’s economic model. He said, “The obstacle that we’ve confronted, just as we expected, is the weight of an obsolete mentality that takes the form of an attitude of inertia,” as the Associated Press reported. At the time, President Castro also acknowledged the gradually increasing role of the private sector and foreign investment in Cuba’s economy, but affirmed that a transition to a capitalist model was not his goal, as the Miami Herald reported at the time.

The 2016 documents approved by the National Assembly this week, as Reuters puts it, “stress the means of production and most farm land as ‘property of the whole people’ through the state.”  Prior to Thursday’s session, Miguel Díaz-Canel, Cuba’s first vice president, and Marino Murillo, vice president of Cuba’s Council of Ministers, told reporters that the Communist Party of Cuba (PCC) will remain the country’s only political party moving forward, reports the Associated Press. Both are influential figures expected to play important roles in Cuba once President Castro leaves office in February 2018.

Cuba’s first non-state small business association founded in Havana

A local entrepreneurial group has founded the “Association of Businessmen,” in Havana to provide training, representation, and advisory services to business-owners and workers in Cuba’s non-state sector, the Associated Press reports. The association currently has about 90 members, though it has not yet received formal government approval to operate. The group applied for government recognition in February, but has yet to hear back, leaving them in a sort of legal limbo where its business is neither authorized nor forbidden, a status known in Cuba as “alegal.”

According to Cuba’s National Office of Statistics, private-sector employment rose from 7.8 percent of national employment in 1995 to 24.4 percent in 2015.

Cuba to build six new hotels in Villa Clara

Cuba’s government will build six new high-end hotels and expand three existing hotels in the central Villa Clara province over the next 11 months, Manuel Marrero, Cuba’s tourism minister, announced this week, EFE reports. Cuba’s 2018 International Tourism Fair will be held next May in Cayo Santa María, an island resort in Villa Clara. Earlier this month, five U.S. hotel groups were among the sponsors of a Latin American hotel and tourism investment conference held in Havana, as Reuters reported at the time.

Between 2015 and 2016, the number of total global visitors to Cuba rose from 3.5 million to 4 million, and Cuba is on track to receive 4.2 million visitors this year. According to an April report in Granma, Cuba has just 66,547 hotel rooms and plans to add about 4,000 more this year. (Cuba added about 1,300 rooms between March 2016 and March 2017.) Some visitors opt to stay in one of Cuba’s 28,000 casas particulares, or private bed and breakfasts; Cuba legalized the renting of private houses and apartments in 1997. Last week, Expedia announced that it would offer online booking for Cuba travel reservations; Airbnb has offered rooms in Cuba to U.S. travelers since April 2015, and expanded access to global users in March 2016.

A report released earlier this month by the Boston Consulting Group projected that the annual number of U.S. visitors alone could reach 2 million by 2025, even with current travel restrictions, as Reuters reported. Last week, the five-star Gran Hotel Manzana, which bills itself as Cuba’s “first luxury hotel,” opened in Havana.

Cuba’s sugarcane harvest up 20 percent in 2017

Cuba’s 2017 sugarcane harvest, which formally ended this week, produced yields 20 percent higher than the 2016 harvest, according to Noel Casañas Lugo, vice president of Azcuba, Cuba’s state sugar enterprise, Granma reports. Cuba operated 54 milling centers this harvest, 4 more than in 2016, and 11 of the country’s 13 sugar-producing provinces saw an increase in raw-sugar output. Even so, yields reached just 85 percent of Azcuba’s target, due in large part to issues stemming from the ongoing national drought, currently in its third year.

Cuba’s sugar industry, once the country’s most important sector, has declined since the collapse of the Soviet Union. In 1991, Cuba produced nearly 8 million tons of raw sugar, compared with the 1.8 million tons produced in the 2017 season, as Reuters reported. Still, raw sugar accounts for nearly 80 percent of Cuba’s food exports, according to Cuba’s National Office of Statistics.

Samsung opens outlet shop in Cuba

Samsung Group has opened a brand shop in Havana, South Korean public news agency Yonhap reports. The shop is operated by the South Korean electronics conglomerate in conjunction with Cuban state enterprise Cadena De Tiendas TRD Caribe, and will retail Samsung Electronics products including smartphones, televisions, and refrigerators.

The deal was announced at the Havana International Trade Fair in November, as ACN reported at the time. Samsung products have been available for sale to Cubans since August 2016 at shops operated by ETECSA, the country’s full-service state telecommunications agency, with prices ranging from 110 to 155 CUC (about the same in USD). The average salary in Cuba is roughly $26 per month, according to figures from Cuba’s National Office of Statistics.

Cuba’s birth rate dropped in 2016

Cuba registered roughly 117,000 births in 2016, 8,000 fewer than in 2015, continuing a long-running trend of age-related demographic strains on the island, EFE reports. Cuba is currently contending with an aging population, a low fertility rate, and a population drain driven by the loss of the 60,000 to 80,000 people who emigrate annually, many of them young people. Forecasts suggest that Cuba will have the world’s ninth-oldest population by 2050, as EFE reported in September. According to World Bank data, Cuba’s birth rate has dropped every year since 1986.

In February, Cuba’s government announced that it would offer paid leave to the grandparents of newborn children, cut daycare costs for parents with multiple children, and offer tax reductions for childcare workers in the non-state sector, as the Washington Post reported at the time. The Post reported that the move made Cuba the first country in Latin America to provide such leave to grandparents.

Recommended Reading

The Economic Impact of Tightening U.S. Regulations on Cuba

An analysis prepared by Engage Cuba, in collaboration with a coalition of pro-engagement groups and individuals including the Center for Democracy in the Americas, shows the harm to the U.S. economy that would stem from increasing U.S. sanctions on travel and trade with Cuba. As the analysis indicates, “Rolling back the current U.S. policy on Cuba could cost U.S. businesses and taxpayers $6.6 billion over the course of the President’s first term and affect 12,295 jobs across the country. Communities most reliant on the manufacturing, tourism, and shipping industries would be disproportionately affected.” Reversing Obama administration-era changes to Cuba policy would cost the U.S. travel industry $3.5 billion and 10,154 jobs, U.S. money-transfer institutions $1.2 billion and 782 jobs, and the U.S. manufacturing industry $929 million and 1,359 jobs, the report notes.

Trump Threatens to Rescind Obama’s Cuba Engagement – and Activists Fight Back, Peter Kornbluh, The Nation

Peter Kornbluh, director of the Cuba Documentation Project at the National Security Archive, explores the ways that pro-engagement organizations and activists have sought to shape the debate surrounding the Trump administration’s ongoing Cuba policy review. Kornbluh notes the roles of nongovernmental organizations, private companies – including the 46 travel groups who penned a letter to the president last week urging engagement, and Members of Congress. He writes, “After years of efforts by advocacy groups such as the Center for Democracy in the Americas and the Washington Office on Latin America to educate both Republican and Democratic members of the House and Senate about Cuban realities, Congress is finally emerging as a potential player on Cuba policy.”

Trump can help farmers by improving two-way trade with Cuba, Jim Moran and Jeff Miller, The Hill

As the U.S. agricultural industry faces growing economic woes, former U.S. Representatives Jim Moran (VA-08) and Jeff Miller (FL-01) write that President Trump has the opportunity to craft a “stronger deal” with Cuba by reducing restrictions on agricultural trade with the island, providing an outlet for farmers struggling in the domestic market. They note, “No U.S. jobs or supply chains would be at risk by improved trade in this sector. On the contrary, for American farmers, every $73,600 in agricultural exports to Cuba would yield another $170,000 in added U.S. economic activity, with commensurate increases in farm-sector jobs. A rollback of the recently established rules and regulations affecting agribusiness trade will only induce Cuba to solidify long-term commercial relationships with other third-country suppliers, potentially shutting American exporters out of the Cuban agricultural market for decades to come.”

President Trump, don’t slam Cuba door shut, Sun Sentinel Editorial Board

The Editorial Board of the Florida-based Sun Sentinel urges President Trump not to undo the changes to Cuba policy made under his predecessor. They write, “If perceived voter sentiment drove Trump’s reversal during the campaign, he should now consider this: A recent Pew survey showed 75 percent of Americans favor the Obama approach and a Florida International University poll found nearly two-thirds of Miami Cuban-Americans favor an end to the 55-year-old embargo. The days of an impenetrable bloc of hardline Cuban-American voters are as over as the embargo should be.”

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