Since D17 (17th December 2014), when President Obama announced sweeping change in U.S. policy toward Cuba, news about the country has been exciting. Headlines such as ‘Obama making history’, ‘Diplomatic Relations Restored’, ‘Cuba off the Terrorist List’,‘Cuba Reopen D.C. Embassy’, ‘The American Flag being raised outside the U.S. Embassy in Havana’ and ‘American businesses preparing to flood Cuba’, have flooded our Twitter feeds and newspapers for the past few months. What could possibly be wrong with this picture?
Most of this information is from a Western and, usually, American perspective. In reality, the progress we read about is often incomplete, with little to see in terms of real development on the ground. As Peter Kucik, a sanctions specialist at the Inle Advisory Group, warns: “this is only the door cracking open”.
Cuba offers a lot: a vibrant people, well-preserved coastlines and reefs, a wealth of tourist activities, a famously developed healthcare system and, more importantly, great potential to press these advantages home. However, given the discrepancy in beliefs and value systems, if we think Cuba will follow American direction blindly, we’d better think again.
Cuba is a nation proud of its radical past, particularly the most recent revolutionary era of 1953-1959. Over half a century on, shrines to the deities of revolution, Che, the Castros and Jose Marti, pepper the island. The slogans “Viva Raul”, “Revolucion” and “Patria o muerte” can be found spray-painted garishly in the remotest locations with people only too eager to tell of their ancestors’ struggles for independence. This resilient collective memory tempers the desire for change. Many Cubans are concerned that their country’s famously distinct national identity may suffer if it concedes to the tokens of capitalism, the Starbucks and McDonalds, which it fears will accompany a freer relationship with the United States. Hence, when it comes to considering Cuba’s economic and political future, independence is the primary concern. Cubans don’t like being told what to do; they are (in many ways thanks to the U.S. Embargo and fall of the Berlin Wall) independent.
Cuba imports only 16% of all food consumed and is 90% self-sufficient in fruit and vegetables. This self-sufficiency has meant Cuba was the first country to meet the Millennium Development Goals in reducing CO2 emissions in 2006. Low infant mortality rates and levels of extreme poverty are other figures which testify to success in key areas of policy. Particular sources of optimism are the fact that Cuba has became became the first ever country to eliminate mother-to-child transmission of HIV, has protected 25% of its coastline, and it ranks in the top 25 countries in the world in terms of life expectancy.
This sense of independence may well lead to a battle of wills when the anticipated wave of American investors reaches Cuba’s pristine shores. American shareholders will predictably seek more profound social change, and the Cuban government may stoke the people’s perfectly rational trepidation at having ‘their Cuba tarnished by capitalism.
There is a need for vast improvements in Cuba’s infrastructure, information services, and its delicately balanced economy before investments can be introduced in a sustainable fashion.
First, the country has two currencies, the CUP and the CUC: the national and tourist (convertible) currency respectively. The CUC is pegged to the dollar but is worth twenty-four times more than the CUP. This facilitates a dual-price system in which foreigners pay high prices while the cost of living is kept sustainable for locals. Both currencies are legal tender on the island, but ‘neither are exchangeable in foreign markets’. This anomaly is a vestige left from the fall of the Soviet Union in 1993, and has been a point of much debate and mandate for many politicians.
Raul Castro promised to find a solution to this Soviet-era relic in 2008 but experts bemoan the little progress made. Until this mess is cleaned up it is hard to see how Cuba can streamline its economic activity with increased pressures from the States.
Infrastructure is another hindrance. Part of Havana’s appeal is the attractively dilapidated façades of its buildings. However, in reality they are crumbling shells of a developed past. These buildings give some taste of the degradation, which characterises the outskirts of major conurbations. Roads in Cuba are minimal and very rough. The route between a major nickel factory in Moa on the north-eastern part of the island and the tourist haven of Baracoa is a prime example. More prohibitively, telecommunication is limited due to stringent government controls. Access to information is heavily restricted, and people can currently only rotate between four TV channels.
Google arrived in 2015 proposing to close the “digital gap” and provide widespread internet access with free routers. In typical Cuban fashion though, this gesture was rejected as a loss of governmental autonomy. By refusing, the Cuban government demonstrated the ingrained suspicion which threatens to hinder economic growth. If this baby and bathwater style of policy-making in response to the interest of American corporations persists, development will remain calamitously slow.
Finally, attention must turn to Cuba’s well-known black market. This commercial subculture of often trivial commerce enables the bypassing of governmental regulations on consumption. One can utilise this people-powered system to access items such as illicit, alternative medicines and even simple commodities, such as potatoes, which Cuba lacks. The same clandestine force provides people access to hard drives of online content and others the opportunity to exchange foreign currency. Such a deregulated operation demonstrates the ingenuity and flexibility-which the embargo has inculcated in the Cuban people. However, the system is clearly unsustainable in the long-term and will inevitably be destabilised in the future if American retail corporations invest heavily and the Cuban currency undergoes a radical shift.
If America is to expect great results from D-17 and the emblematic esurrection of the American Flag in Havana for the first time since 1961, they will have to consider these three accompanying issues. With caution and a measured pace, American corporations will be able to unlock some of Cuba’s undeniably great potential. The Cuban government must warm to the idea of foreign stakeholders holding influence and must forego its penchant for the past to accommodate some of the material wealth that capitalism facilitates and that its people crave. This mellowing can only occur if vast spadework takes place first. Infrastructure and educational foundations must be created and given time to take root before we see the positive impact of American investment in Cuba.
Image courtesy of runneralan2004