Tuesday, March 30, 2010

New chill enters US-Cuba relations after Obama's brief thaw

New chill enters US-Cuba relations after Obama's brief thaw

President Obama has made several goodwill gestures toward Havana, giving
US businesses the hope that Cuba relations could improve. But the Castro
regime appears unwilling to compromise.

By Howard LaFranchi, Staff writer / March 30, 2010

US business is setting its sights on Cuba, but the interest comes just
as President Obama is stepping back from his policy of engagement with
the Castro regime.

With more Cuban-Americans traveling to the island country as a result of
loosened US travel restrictions aimed at improving Cuba relations, Cuban
oil, agriculture, and infrastructure are beckoning as promising markets
for American investors and farmers.

But the opening of Cuba's totalitarian political system – the sine qua
non of increased American ties – is nowhere in sight, Cuba economic
experts say, meaning the perennial hopes of US business are likely to be
dashed once again.

"The Cubans are being very clear that they will accept absolutely no
conditions in terms of normalization with the United States – none,"
says Anna Szterenfeld, Latin America editor of the Economist
Intelligence Unit.

Mr. Obama seems to have come to the same conclusion. Last week he
released a statement suggesting disappointment in the Cuban regime's
response to the gestures he made last year as part of what he envisioned
as a mutual warming.

"Instead of embracing an opportunity to enter a new era, Cuban
authorities continue to respond to the aspirations of the Cuban people
with a clenched fist," Obama said.
Cuban crackdown

The immediate cause of the presidential statement was the very public
repression in Havana days earlier of a protest by the so-called Ladies
in White, the relatives of Cuba's political prisoners. Video circled the
globe of government-affiliated counterdemonstrators heckling and
attacking the marchers, who included the mother of Orlando Zapata
Tamayo, an imprisoned dissident who died in February after a prolonged
hunger strike.

Mr. Zapata's death set off a round of hunger strikes by other political
prisoners that have evoked strong condemnation from other normally
friendly governments, such as Mexico and Spain. "I join my voice with
brave individuals across Cuba and a growing chorus around the world in
calling for an end to the repression," Obama said.

It is in this unlikely atmosphere that signs of interest in US
investment in Cuba have blossomed. Proposals await in Congress for
ending the travel ban on Cuba – the Obama administration last year eased
restrictions on Cuban-Americans returning to visit family. US farmers
would like to see further easing of conditions on food sales to Cuba.
Last week, US business representatives met with Cuban officials in
Cancun, Mexico, to discuss investment opportunities on the island.

So why the interest?
US and Cuba need each other

The US and Cuba have mutual economic interests, Cuba experts say. The US
is attracted to the very sectors Cuba is interested in developing, like
the island's significant offshore oil deposits and other raw materials
like nickel. And, ironically, Cuba now finds itself overly dependent on
one patron government – Venezuela – much as it was dependent on the
Soviet Union before its fall.

"Cuba is in a desperate situation so I think they will be required to
introduce more market reforms," says Teo Babún, president of
Cuba-Caribbean Development and author of The Business Guide to Cuba. At
the same time, he adds, "Many of their products are needed in the US."
And as a result, he says, "[Eventually] we're going to find the right
formula between the two."

Mr. Babún was participating in a panel discussion, sponsored by the
Americas Society/Council of the Americas in New York, that drew more
than 100 participants either on site or via webcast Tuesday.

The turnout suggested, as Americas Society senior director of policy
Christopher Sabatini noted, "There's a lot of interest in Cuba."

The question is whether that perennial interest will meet the conditions
for a real relationship any time soon."


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