Tue | Dec 6, 2016

If the Cuban embargo is lifted

Published:Sunday | December 21, 2014 | 12:00 AM
AP Roberto Ramos, president of the Cubaocho Art and Research Center in Miami's Little Havana neighbourhood, lights up a cigar last Thursday. The Cuban cigar is set to make its first legal appearance in the United States in years, with relaxed guidelines allowing travellers to return with a few of the once-forbidden items in their suitcases. But the cigars won't roll into stores just yet, and owners say they aren't worried about business.
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As a doctoral student in the United Kingdom, I had the opportunity to visit Cuba a few times as part of my thesis field research examining that country's recently introduced foreign direct investment laws and the impact on their tourism, tobacco and rum industries. This was back in 2001, a time when Cuba was still struggling to fill the economic void left by the political fallout in the Soviet Union.

As I travelled around that beautiful country, there were clear signs of human and infrastructural deprivation, largely caused by the United States embargo. At the same time, I was struck by the creativity and resilience of the Cuban people and the respect many showed for then President Fidel Castro for standing up to the mighty America.

In a peculiar way, however, most Cubans seem to want an end to the embargo and perhaps even an end to the anti-American bravado displayed by the Cuban authorities. I felt at the time that the people believed that Castro's revolution should be preserved, but only until after Castro left the political stage.

My many visits to Miami, Florida, home of many Cuban exiles, tells a different story, but with a similar theme. Many Cuban-Americans who are insistent that the American government keep up the pressure on Havana by maintaining the embargo long for the day when normalisation is restored, so they can at least be able to visit and enjoy their homeland.

After 54 years of hostility between both countries, President Barack Obama is attempting to break the deadlock with the announcement of his intentions to re-establish political and economic relations with Cuba. The public hostilities and private desires on both sides will now have to be reconciled. The euphoria coming from many in Jamaica and the region who have been lobbying for this announcement must also be

reconciled with a few critical realities that require analysis.

COMPROMISE

First, we should not assume full normalisation until there is a clear signal from the American legislators, whose sanctioning of the president's announcement is critical for at least trade and economic reconciliation. Already, the Republican-controlled legislature is screaming about a lack of consultation by the Obama administration and already influential Republicans, like potential presidential candidate Jeb Bush, are accusing Obama of pursuing a misguided policy.

This is likely to be a key issue in the next presidential campaign, and chances are Obama would have done his homework among key Latino voters and concluded that, apart from this being a legacy move for him, Republicans may lose critical non-Cuban Latino voting segments if they remain hawkish in their resistance to Cuba.

I do not credit Obama with being generally strong on foreign policy, but in this case one should commend him with this move towards normalisation of relations with Cuba. American foreign policy towards Cuba has not worked - neither for the Americans nor the Cubans.

Meanwhile, politically, Cuba has been able to survive the embargo, generate significant sympathy in the region and the world, and expand its influence and anti-American sentiment through an activist regional social and political programme. There is a view that had the American embargo not been in place, Castro's influence would have dissipated and Cuba would be a thriving democracy today, as the appetite for full freedom by Cubans would have forced more liberal reforms internally.

Obama's action is, however, a case of better late than never. His detractors will no doubt accuse him of being cowardly about it, as he promised early in his presidential bid but waited long until after his re-election, midterm elections, an approved budget and even after the holiday break by the Congress and Senate. His supporters would respond by saying, timing is everything in politics.

The president will, however, have to face the music in the new year as he attempts to push through his reform proposals and obstacles like the 1996 Helms-Burton law, which criminalises foreign investors who engage in business transactions that involve assets confiscated by the Cuban government after the revolution, would have to be repealed or significantly adjusted to allow for economic normalisation. One suspects that there may need to be some sort of compensation arrangement for those original owners of these assets as a compromised position to outright return.

CELEBRATE BUT ALSO ASSESS

Jamaica has always been supportive of a lifting of the embargo, as evidenced by the many welcoming statements by the Government, Opposition, private sector and civil society. Beyond the emotions and genuine happiness for Cuba and the Cuban people, however, must be a serious reality check on the implications of an opening up of Cuba on the economic relations between the two countries and the wider region. At the policy and private-sector levels, there are a few critical issues to assess.

First, Cuba, from a purely economic standpoint, represents both an opportunity and a threat to Jamaica's future economic prospects. This is a country of more than 11 million people with higher levels of education and training and heath care, according to the United Nations. Cuba is an extremely beautiful country and with friendly and beautiful people.

All these factors combined with the right leadership and management could see a country poised to take off economically in critical industries like tourism, mining, agriculture and agroprocessing (rum, tobacco, etc.), and regional logistics. These are all industries that Jamaica competes in and depend on both local and foreign investors to build out. Cuba is likely to target and attract investors comparing both locations, but concluding that Cuba is virgin territory, with a larger internal market and, therefore, more attractive to their investment dollar.

TOURISM FALLOUT

With a likely ease of travel restrictions, it is also most certain that there will be a fallout in American tourists looking at Jamaica, as Cuba would now be accessible - and even for the curiosity factor - travellers might prefer to visit that country over Jamaica. Already Jamaica benefits from thousands of American tourists who use Montego Bay as a stopover hub to visit Cuba. They would likely now go direct once travel restrictions are lifted.

What does this mean for us? For starters, there needs to be a serious policy assessment of the economic implications of Cuba becoming the beneficiary of interested members of the

global foreign investor community and how we position ourselves to compete with, or complement, that country as we also seek to attract those very same investors to our shores.

Since it is likely that Cuba, as a base for manufacturing and other economic activity, would also target Jamaica as a close market for its retooled and modernised goods and services, our local private sector, including manufacturers and tourism interests, must assess how we could tap into opportunities in Cuba as well as retool to prepare for greater competition from that country.

The Ministry of Industry, Investment and Commerce should move quickly to establish a multisectoral task force to develop terms of reference to study this issue and develop a clear strategy for Jamaica's investment strategy for an embargo-free Cuba. The private-sector groups are critical to this process.

Otherwise, if Barack Obama gets his way, our celebration for Cuba and the Cubans will eventually give way to a paralysis of analysis of how great our neighbours have become economically while we continue to struggle for survival.

n Chris Tufton is co-executive director of the University of the West Indies-based Caribbean Policy Research Institute and a former

government minister.

Email feedback to columns@gleanerjm.com and cctufton@gmail.com.