Getting Down to Business in Cuba
24 Jul 2015
Written by Medea Benjamin
EMBARGO ECONOMICS-In case you missed it, the United States and Cuba now
have diplomatic relations for the first time in 54 years. Unfortunately,
the outdated economic embargo is smothering the tremendous potential
this opening offers.
First, some background.
The embargo, put in place in the early 1960s to punish the revolutionary
government, has held back the Cuban economy and poisoned U.S.-Cuban
relations for decades.
When Washington spurned Cuba, the Soviet Union became the island's top
trading partner, taking some of the sting off the embargo. But after the
USSR collapsed in 1991, Cuba plunged into a deep economic crisis.
Venezuela mostly replaced Russia as a reliable supplier of cheap oil
years ago. Now Cubans fear that turmoil in the South American nation
will knock out this lifeline too.
Long-term economic distress has frayed Cuba's impressive education and
health care systems. Its heavily subsidized food rations no longer meet
basic needs. And the high prices unregulated markets charge are beyond
the reach of the many Cubans who earn about $30 a month working for
state-run enterprises and agencies.
A recent survey showed that nearly 80 percent of Cubans were
dissatisfied with the country's economic system, and 70 percent were
eager to start their own businesses. This was especially true among
young people, who are highly educated and fed-up with the state-run economy.
Since his older brother Fidel handed him the reins in 2008, President
Raúl Castro has tried to transform the island's lumbering, top-down system.
He's pushed through Cuba's biggest economic reforms in half a century.
State companies have shed jobs, and national labor laws now accommodate
more private enterprise. Today some 500,000 Cubans — almost one in ten
workers — are officially self-employed.
Cuba's government wants to open up the economy while preserving social
gains and guarding against growing inequalities. It's concerned about an
increasingly two-tier economy where people with access to tourist
dollars or remittances from relatives abroad live in luxury, compared to
those struggling on government salaries.
Racial inequalities are growing as well, partly because of the Cuban
government's tolerance of paladares — privately operated bistros. As
these restaurants are located in people's own homes, the arrangement
favors the wealthier white Cubans who are more likely to have larger
homes and relatives abroad who can provide start-up cash.
So Cuba sees a big need to expand its economy through foreign trade. And
U.S. companies are raring to do business there, with American officials
flocking to the island to plead their case.
New York Governor Andrew Cuomo traveled to Havana recently with the
heads of MasterCard, JetBlue, Pfizer, and Chobani. U.S. Chamber of
Commerce President Tom Donahue took a delegation that included the CFO
of Cargill and the chairman of Amway.
Senator Debbie Stabenow, a Michigan Democrat, traveled to Cuba this year
to tout her state's agricultural and lumber products. Atlanta Mayor
Kasim Reed trekked there to push Coca-Cola and Delta airlines.
And the list goes on, even though U.S. businesses can't offer Cuba
credit or do business with government entities on this island nation
just 90 miles away from Key West. They're mostly relegated to the
sidelines, watching rivals from Spain to Russia to Mexico swoop in.
Ending the embargo would be a win-win for Cubans and Americans. It would
allow all of us to travel freely to the island, and it would let U.S.
companies trade freely with one of our closest neighbors, creating more
jobs in both nations.
Now that the Cuban flag waves at the re-opened Cuban embassy in
Washington, Congress should lift the antiquated legislation that stands
in the way of true normalized relations.
(Medea Benjamin is cofounder of CodePink and GlobalExchange. Her latest
book is "Drone Warfare: Killing by Remote Control." This article first
appeared in OtherWords.)
Source: Getting Down to Business in Cuba -