Official U.S. and Cuban depictions of theeffects of the U.S. embargo differ notably fromCuban economic reality. This report, based onthe authors’ recent visits to Havana and inter-views with top Cuban officials, dissidents, andother private citizens, shows that the embargo isnot responsible for Cuba’s poor economic condi-tion—as Havana claims—nor has it been effectiveat achieving Washington’s goal of isolating theCuban regime.

Since the collapse of the Soviet Union and theconsequent loss of massive aid and trade prefer-ences, Cuba has established more developed rela-tions with the outside world and introduced lim-ited reforms in areas including trade, foreigninvestment, and tourism without renouncingsocialism. Cuba is thus no longer backsliding,but neither is it flourishing.

A dense network of American contacts withCuba has also developed. About 3,400 Americanbusiness visits to Cuba took place last year, and80,000 Americans are visiting the island annually,in addition to thousands of Cuban Americans who,along with other Cuban exiles, remit $1 billion per

year to Cuba. Much of that activity violates the spir-it, if not the letter, of U.S. sanctions law.

Interviews with leading dissidents also reveala preference for engagement with the UnitedStates and little support for maintaining theembargo. Moreover, many dissidents opposeproposed U.S. legislation that would provide aidto human rights and other activists in Cubabecause it would compromise their indepen-dence and legitimacy.

Current U.S policy toward Cuba is based onhistorical inertia, domestic political calculations,and emotionalism. The embargo will continue tobe ineffective—especially given dwindling supportfor the policy, the ease with which Cuba getsaround the sanctions, and the ways in which Cubahas been adapting to changing world conditions.The United States could help improve Cuba’spoor human rights record and reveal FidelCastro’s regime as the main source of Cuba’s eco-nomic troubles by lifting the trade and investmentembargo, restoring the right of Americans to trav-el to Cuba, and rejecting any current or proposedofficial aid to groups inside Cuba.

Report from HavanaTime for a Reality Check on

U.S. Policy toward Cubaby Jonathan G. Clarke and William Ratliff

_____________________________________________________________________________________________________

Jonathan G. Clarke, a former British diplomat, is a research fellow in foreign policy studies at the Cato Institute.William Ratliff is senior research fellow at the Hoover Institution, Stanford University.

Executive Summary

No. 418 October 31, 2001

Introduction

In his address to the April 20–22, 2001,Summit of the Americas in Quebec,President Bush championed the powerfulidea that free trade leads to free people.1 Thatechoed the theme he enunciated during thepresidential campaign when he said: “I viewfree trade as an important ally in whatRonald Reagan called ‘a forward strategy forfreedom.’ The case for trade is not just mon-etary, but moral. Economic freedom createshabits of liberty. And habits of liberty createexpectations of democracy.”2 In the case ofChina, the administration acts on this princi-ple. Advocating the renewal of permanentnormal trade relations with China, Bushargued that “open trade is a force for freedomin China, a force for stability in Asia and aforce for prosperity in the United States.”3

In the case of Cuba, however, the Bushadministration—like those before it—shiesaway from putting this sensible philosophyinto action. Instead of trade aimed at foster-ing the much-needed process of political andeconomic reform, Cuba encounters isolationand sanctions. At a ceremony on May 18 tomark Cuban independence day, Bush reiter-ated his opposition to any relaxation in sanc-tions and his support for a bill before theSenate to provide $100 million to the Cubanopposition.4 The Summit of the Americasgave Bush the opportunity to draw attentionto Cuba’s absence, stating that “only demo-cratic nations can attend the Summit of theAmericas, and every nation in our hemi-sphere except one will be there.”5 The impli-cation that Cuba is an isolated entity echoedthe earlier statement of Secretary of StateColin Powell at his Senate confirmationhearing on January 17, 2001. When referringto the “sweeping power of democracy” in theWestern Hemisphere as represented by theelection of Mexican president Vicente Fox,Powell cited the exception of “Castro’s Cuba[that] remains behind, destined to remainbehind, trapped in the ’50s until they see theerror of their ways.”6

Those statements and proposals neatlyencapsulate the view of Cuba as seen fromthe top of the American government, namelythat of an errant nation without options orfriends and with no prospect of salvationuntil it rejoins the Western club. The policyimplication is that the four-decades-old uni-lateral U.S. embargo against Cuba is justifiedand on target and that the Bush administra-tion will continue or even tighten it. Amb.Craig Johnstone, the U.S. Chamber ofCommerce’s senior vice president for inter-national, economic and national securityaffairs, has bluntly expressed the frustrationfelt by an increasing number of Americans:“Unilateral sanctions are the result of failedforeign policy—the last resort of politicianswho have given up trying to actually dosomething about a problem and are lookingonly to posture.”7

Policies based on illusion and posturing arenot, of course, confined to the American sideof the equation. The 1991 fall of the SovietUnion presented Cuba with an unparalleledopportunity to cast off the shackles of thecommand economy. Cuba’s refusal to takethat opportunity and its persistent mainte-nance of so many of communism’s mostdebilitating structures lend a hollow quality toCuban outrage against the embargo. Theembargo may be bad policy, but it is hardly themain cause of Cuban economic underperfor-mance. Indeed, as discussed below, the com-mon wisdom in the Havana diplomatic com-munity is that the embargo suits the Cubanpolitical leadership just fine because it deflectsattention from the self-inflicted inanities ofsocialist mismanagement.

Although this paper takes issue withaspects of current U.S. policy, its startingpremise is that structural reform in Cuba islong overdue and that the United States has alegitimate interest in encouraging the emer-gence of Cuba as a democratic, market-basedsociety. Our conclusion is that the currentregime of isolation and economic sanctions isnot the best way to promote those desirablechanges.8 We prefer a policy of engagement.To support this view, we take advantage of

2

The embargo maybe bad policy, but

it is hardly themain cause of

Cuban economicunderperformance.

what we learned on visits to Cuba in Februaryand April–May 2001 to present a consideredoverview of current conditions. On that basis,we analyze whether, in the light of those con-ditions, current U.S. policy is likely to producethe desired effect of inducing the Cubanauthorities to “see the errors of their ways” andto introduce the changes that would so great-ly benefit the Cuban people. This paper isbased in part on extensive discussions thatwere held with Cuban officials, private-sectorindividuals, dissidents, and foreign diplomatsas well as personal observations andexchanges with ordinary Cubans in Havana,Pinar del Rio, Playa Girón, Cienfuegos,Trinidad, Camaguey, Bayamo, Santiago, andpoints in between. It draws on those discus-sions and observations to set out possibleimplications for U.S. policy.

Cuba is a complex and complicated soci-ety. With the instruments of totalitarian con-trol still in place, it is also a society whereappearances are deceiving. Statements bypublic officials are rarely gospel truth.Official statistics and interpretations of laware not necessarily reliable. Legislation tendsto follow practice—rather than the other wayaround. Nonetheless, even allowing for thosecaveats, certain conclusions can be drawn.The chief ones follow.

• The United States and Cuba are essen-tially coconspirators in misrepresent-ing the effects of the embargo as moresignificant than is in fact the case. TheCuban economy is not flourishing, butit is also no longer backsliding.

• With the enthusiastic cooperation ofmany of the United States’ closest allies(Canada, the European Union, andIsrael), Cuba has found ways to workaround the U.S. embargo so as toweather the demise of the Soviet Unionand more recent storms such asincreases in world energy prices.

• Economic deprivation is a moderatebut not a major source of social ten-sion. It does not appear to be an engineof political reform.

• Cuban Americans, who support theembargo much more widely than anyother group in the United States, alsoviolate it most frequently and signifi-cantly. By sending remittances to theisland they always violate the embar-go’s spirit and sometimes violate itslegal restrictions as well.

• The vast majority of those who areintended to be the chief beneficiaries ofU.S. policy (the Cuban people and thecountry’s human rights and politicalactivists) by all available evidenceoppose the embargo and are at bestskeptical of the value of U.S. officialfinancial aid to the opposition in Cuba.

• As estimated by the U.S. InternationalTrade Commission, U.S. firms are los-ing out to foreign competition in anamount ranging anywhere from $684million to $1.2 billion per annum.

Those realities are significant. But U.S. pol-icy toward Cuba is based more on emotions,domestic political calculations, and historicalinertia than on rational calculation. Thus itturns its back on central principles ofAmerican democracy: that, absent nationalsecurity threats, the U.S. government does nothave the right to prohibit the travel and busi-ness of American citizens abroad and that eco-nomic freedom tends to breed political free-dom. The policy thus fails to advance U.S.interests and U.S. values effectively. The Bushadministration should undertake a funda-mental review of the U.S. approach to Cuba.The first step could be a revival of the pro-posed presidential bipartisan commission toevaluate the policy that was killed by PresidentClinton in January 1999.9

Conditions in Cuba Today

Cubans and some foreign observers havelong pointed to Castro’s health and educa-tion programs as examples of the success ofthe revolution. To be sure, when Castro tookpower in 1959, he inherited a nation with

3

Absent nationalsecurity threats,the U.S. govern-ment does nothave the right toprohibit the trav-el and business ofAmerican citizensabroad.

unusually high indices in education, health,and other social areas. In his magisterial earlyhistory of the Cuban revolution, HughThomas noted, “Cuba’s standard of livingmeasured by most gauges was always higherthan most countries of the so-called under-developed world.” And yet, he continued,since the benefits were so unevenly distrib-uted in the population, particularly outsideHavana, the country “certainly neededreform and more than most countries.”1 0

Policies since 1959 have taken education toall children and laid a good foundation forfuture growth when a new regime permitsconditions that encourage individual andnational growth. (Computer literacy is quitea different matter since it is extremely diffi-cult for any unauthorized Cuban to getonline.) Also, Cubans generally appear to bein good health and not particularly under-nourished. But the caloric intake of the aver-age person is relatively low, and aid agenciesstate that food for the needy covers only threeweeks a month.1 1 The United Nations issending $22 million to Cuba this year to helpfeed children and pregnant women in thepoorest eastern provinces. But, according toCarlos Lage, the country’s chief economistand a doctor by profession, Cuba’s mainproblem is lack of food, not hunger.1 2In partthat is because of a sustained governmenteffort—assisted for almost three decades bySoviet aid and subsidies that amounted tofrom a quarter to a third of gross domesticproduct—to focus on preventive medicineand establish general practitioner clinics intowns all over the island.

Ambassador Vicki Huddleston, principalofficer of the U.S. Interest Section in Havana,concludes that “Cuba has done an excellentjob across the board on health care and edu-cation.” Secretary of State Colin Powell, whileremarking that Castro is “trapped in a timewarp,” added that he has “done good thingsfor his people.” Castro responded that Powellis the only secretary “who has dared say thatCuba has done something good.”1 3 Thosestatements notwithstanding, it must bepointed out that many other Latin American

countries have made significant strides inthose fields over the past 40 years, startingfrom lower bases, without nearly the costs inhuman life and rights. Granting the impor-tance of preventive medicine, free medicalcare is less valuable when routine medica-tions are unavailable, a reality that cannot beblamed on the embargo. And free educationloses much of its value when courses are inlarge part regime propaganda, freedom ofexpression is curtailed, and access to readingmaterial is severely limited.

The Political RealityThe political conditions the embargo is

intended to improve remain little changed.Real power is in the hands of Fidel Castroand a tiny clique around him. The normaltrappings of democracy (free speech, free-dom of association, a free press, Internetaccess, and so on)1 4are nonexistent or heavi-ly circumscribed, and people who dare tooppose the regime suffer frequent harass-ment. According to dissidents interviewed byone of the authors in February, there werethen about 300 political prisoners in jail.Human Rights Watch has stated that Cuba“has developed a highly effective machineryof repression.” In its 2001 report, AmnestyInternational reported that there was “a seri-ous escalation in repression during the clos-ing months of 2000” and that “journalists,political opponents and human rightsdefenders were subjected to severe harass-ment,” including, among other things, short-term detention, house arrest, and threats.1 5

According to dissident Elizardo Sánchez inan interview in February, rights conditionshave declined every year since the Pope’s visitto Cuba in January 1998, but harassment isnow “low intensity.”

The regime does not hesitate to make lifedifficult for private entrepreneurs if their suc-cess too clearly challenges revolutionary ideals.Drivers of pedicabs (three-wheeled vehiclesintroduced from Asia during the fuel crisisthat began in the early 1990s) and youngsterstrying to hustle a few dollars on the streets byleading tourists to private restaurants (called

4

The Castroregime does nothesitate to makelife difficult for

private entrepre-neurs if their suc-

cess too clearlychallenges revolu-

tionary ideals.

paladares), salsa bars, or sexual companions areoften harassed and sometimes arrested. (It istrue, as some Cubans argue, that hustlers andomnipresent beggars can become a nuisanceto visitors, so cops on every corner may also bethere in part to “protect” the tourists.) Privaterestaurants in people’s houses, which operateunder strict (but not always enforced) guide-lines, open and close frequently depending onthe whim of the government. Many paladareshave closed in recent months in Havana, andover the past year the number of paladares inCienfuegos, according to residents of the area,has declined from 19 to 3, in large partbecause the cost of licenses was increased tomore than $800 per month.1 6 Private art gal-leries on the popular Obispo Street in Havanawere closed between our visits in February andApril. Economy Minister José Luis Rodríguezsaid on television in April: “We believe there’sno reason for the self-employed sector not toexist, if it follows certain regulations. But wedon’t stimulate it because we don’t think it’sthe solution to our economic problems.”1 7

The government strategy seems to be to allowa certain amount of free enterprise but neverlet practitioners take their income for granted.

The Economic RealityWhile GDP comparisons are complicated,

particularly since Cuba only recently movedfrom Soviet-style statistical methods to inter-national standards, there is no doubt that theeconomy, which was heavily dependent onthe Soviet bloc until it collapsed, still has notregained 1990 levels. Cuba has a dual-curren-cy economy, and a foreigner can travel allover the island for a month and never toucha peso. (Cubans call their currency “paja-mas,” because it is “for indoor use only.”) Theaverage monthly salary of a governmentworker is about $12, up some 7 percent overlast year. A monthly pension may be no morethan $4. Rationed items, sold at very lowprices for pesos only, generally last the typicalfamily considerably less than a month.

Thus almost everyone needs to moonlightto get dollars so he can buy food and otheritems in “dollar” stores, the only places many

goods can be found besides in a flourishingblack market that illegally offers everythingfrom foods to cigars to services. It is commonto meet highly trained doctors or educatorsdriving taxis, renting out rooms in theirhouses, acting as travel guides, or involved inprostitution. One Cuban who rents a coupleof rooms in his house, and pays about halfthe earnings to the state in taxes, still makes20 times what he did before as a geologicalengineer.1 8 And an attractive lady can earnmore in two nights than a state-paid neuro-surgeon does in a month. Many of the litheand lovely mulatas at the world-famousTropicana nightclub in Havana are availableafter hours for gentlemen who will supple-ment their meager state-paid salaries. Thedivision between the people with and thepeople without dollars has created majorproblems for the government. The country’sleaders know U.S. dollars keep the economymoving and, when they are sucked in bystate-run dollar stores, provide the state des-perately needed hard currency. But only halfto three-quarters of Cubans have access tothose dollars, in very differing amounts,whether from family abroad or dollar-earn-ing activities in Cuba. Government employ-ees, who are paid in pesos, are particularlyhard hit, and so the state has established pro-duction and other bonuses to reduce but byno means eliminate income discrepancies.19

One criticism often leveled at the Cubangovernment is about how it controls salariesreceived by Cubans who work for foreignemployers, including the U.S. government.When a foreign employer attempts to hireCuban employees, he must select workersfrom a prescreened pool of candidates offeredby a Cuban state agency. The agency thenrequires the foreign employer to remit a“salary” in hard currency—usually around U.S.$300 per month, payable to the state agency,not the individual employee. From this salary,the state pays the employee with an equalnumber of Cuban pesos, not in convertiblepesos that in Cuba are equal to one U.S. dollar.This exchange translates into an effective taxrate of about 95.5 percent, which the govern-

5

Almost everyoneneeds to moon-light to get dol-lars so he can buyfood and otheritems in “dollar”stores.

ment justifies in two ways. First, it claims thestate has to pay for education, medical care,housing, and so on. Second, the governmentargues that it must try to maintain someequality between the salaries of those whowork for foreign employers and those whowork for the state. Since foreign employersknow the salaries their workers receive fromthe state are hardly a living wage, they mayprovide their Cuban employees a supplemen-tal salary known as a haba. This supplement ispaid directly to employees, though not neces-sarily in cash. The U.S. Interests Section paysall Cuban employees a haba in U.S. currency,though the amount varies according to thegrade and job description of the employee.Many employers in tourism offer theiremployees a basket of goods or couponsredeemable for certain items in dollar stores.Workers in joint-venture hotels are often ableto buy such items as soap from the hotels atgreatly discounted prices.

Housing is virtually free but also in veryshort supply, as it has been for decades, andextended families of necessity often livetogether, with 5 to 10 people often crowdedinto a couple of dark rooms. Althoughimpressive restoration projects are underway, particularly in the Old Havana district,to save some of the island’s magnificent colo-nial architecture—the Spanish Embassy is asplendid example of what can be done—much of Havana in particular is badly dilapi-dated, and many buildings are on the verge ofcollapse. Many restored buildings are con-verted into museums, though some also con-tain refurbished apartments. A censusordered in Old Havana in 2001 reportedlyleft many current residents worrying thatthey too might be moved out as the district isfurther expanded for the benefit of tourists.2 0

During the drought at the beginning of theyear, many parts of the island had runningwater only once a week. The electricity wentoff while we were interviewing RicardoAlarcón, president of the Cuban NationalAssembly, who is the third most powerfulman in the government (just below theCastro brothers) and regularly mentioned as

part of the post-Castro power structure.Many Cubans say transportation is the

greatest problem they face. When the econo-my collapsed in the early 1990s and the “spe-cial period” began, gasoline was (and still is)in such short supply and so expensive thatmuch public transportation ceased to exist.Hundreds of thousands of clunky bicycleswere imported from China, and bulls beganreplacing tractors in the fields. Althoughsome American conservationists have seenthis reliance on bulls and bicycles as a stepforward, Cubans do not. Local and longer-distance rides now may be on a bus that cancost a month’s salary for a hundred miles oron the back of a truck. Some hitchhikersstanding in the shade along highways wavepesos in the air to show they will pay any driv-er who will give them a lift.

The Effects of the Embargo

Although a central thesis of this paper isthat the embargo’s impact is not as signifi-cant as either its proponents in Washingtonor its opponents in Havana claim, neither isthe impact zero. In bald economic terms, theU.S. International Trade Commission citesCuban government figures on the cumula-tive damage to the Cuba economy up until1998 as $67 billion. Extrapolating from tradefigures, the ITC estimates the annual loss toU.S. exporters at as much as $1.2 billion.2 1

Nonetheless, after factoring in the massiveSoviet subsidies to Cuba, which peaked at $6billion annually in the 1980s, the ITC’s con-clusion about the effect of the embargo isthat “U.S. economic sanctions with respect toCuba generally had a minimal overall histor-ical impact on the Cuban economy.”22

The embargo certainly raises the cost andcomplications of doing business. For example,Japanese auto manufacturers have to certifythat their cars being exported to the UnitedStates do not contain Cuban nickel. Canadiansugar processors have to segregate Cubansugar in separate silos. Cuba can suffer suddeninterruptions of supply of modern medical

6

The embargo certainly raises

the cost and complications of

doing business.

equipment if, for example, a Swedish manu-facturer decides to use an American compo-nent. Since Cuba’s moratorium on foreigndebt payments to nonsocialist countries in1986, commercial credit has been availableonly on disadvantageous terms, essentiallykeeping Cuba out of international capitalmarkets—a situation that is not compensatedfor by aid from the World Bank and theInternational Monetary Fund since theUnited States has vetoed Cuban membershipin those and other international financialinstitutions. (Of course, so long as domesticeconomic mismanagement continues, Cubawill never be an attractive credit risk.) TheCuban government is forced to offer overseaspartners guarantees against penalties arisingfrom such legislation as the Helms-BurtonAct. Cuban officials lose no opportunity tostate that their primary foreign policy objec-tive is to have the embargo removed.2 3

Of course, the most onerous part of theHelms-Burton legislation, Title III, has neverbeen implemented. This title would empow-er the U.S. government to hunt down for-eign-owned companies accused of “wrongfultrafficking in property confiscated by theCastro regime” and enormously complicatethe asserted U.S. objective of resolving prop-erty claims U.S. citizens have against theCuban government. U.S. allies worldwidecondemn Title III as unacceptable extraterri-torial legislation, and, although implement-ing it would neither bring down Castro norfurther the cause of democracy in Cuba, itwould further sour U.S. relations abroad,particularly in Europe. Recognizing thoseproblems, President Clinton waived this titleevery six months, and in mid-July 2001President Bush did the same. At the sametime, the president proclaimed the embargoitself a “moral statement” that he will enforcemore strictly than his predecessors did whilesimultaneously extending greater support todissidents on the island.2 4

Some supporters of sanctions claim theembargo is justified because, they say, it is use-ful for fostering democracy and economicreform and protecting human rights—values

highly identified with the American globalrole—though there is no evidence to prove thatthis is true. Few Americans would quarrel withU.S. concerns that, as noted above, conditionsin Cuba are deeply unsatisfactory for the vastmajority of the people. Indeed, even while theypursue an active engagement policy diametri-cally the opposite of the U.S. approach,European officials unhesitatingly state thatthey share the American objective of achievingdemocratic reform in Cuba. Their disagree-ment is not over ends but over means. Inrough terms, the disagreement could be char-acterized as an American preference for a“hard-landing” form of regime change(though U.S. officials claim they are workingtoward a “peaceful transition”) and aEuropean desire to promote a “soft landing”whereby structures necessary for a democratictransition emerge in an orderly manner.

But, whether ill- or well-conceived, policieslike the embargo must ultimately confront anon-the-ground reality. Unfortunately, Wash-ington has not shown much interest in doingso. In January 1999 President Clinton evenrefused to form a presidential bipartisan com-mission to simply conduct a broad examina-tion of U.S. policy toward Cuba, though theidea was supported by 25 senators and an arrayof prominent former high officials from bothparties, including former secretaries of stateHenry Kissinger, Lawrence Eagleburger, andGeorge Shultz. Alarcón commented to us that“when your enemy has a wrong perception ofreality, that is good.”25 In other words, bother-some though it is, the U.S. embargo is not theall-consuming and crushing constraint onCuban options that it is portrayed to be. Hisargument is that in respect to economic devel-opment, export markets, foreign investment,tourism, international relations, and biotech,Cuba has forged alternative sources of bothsupply and demand. He also points to anincreasingly dense network of contacts with theU.S. private sector that advocates a change inU.S. policy and acts as a counterweight to offi-cial policy.26 If those points are true, they go along way toward bolstering the case for achange in U.S. policy toward Cuba.

7

The U.S. embargois not the all-con-suming andcrushing con-straint on Cubanoptions that it isportrayed to be.

Economic Development andExport Markets

When Fidel Castro took power in 1959,Cuba faced “five long-standing socioeco-nomic problems,” according to economistSergio Roca. They were “low rates of eco-nomic growth; excessive concentration onsugar production and foreign trade; excessivedependency on one trading partner; substan-tial unemployment and underemployment;and sharp inequalities in income distribu-tion and provision of social services.” Duringthe decades that followed, before the intensecrisis of the 1990s, the government lurchedthrough a number of stages ranging from amoralistic command economy under orinspired by Che Guevara to pre-GorbachevSoviet formulas.27 The collapse of the Sovietbloc threw Cuba into its most severe eco-nomic crisis ever, but serious problems relat-ed to overcentralization, and the “inefficientuse of material, financial and humanresources” dated back to the beginning of therevolution and were periodically attacked byFidel Castro. According to a Cuban econo-mist, “The crisis became unmanageable bythe mid-1980s.”28 Then, with the demise ofthe Soviet bloc and Comecon in the early1990s, the Cuban economy fell into a deepercrisis from which it is still recovering.

Although there are significant difficultieswith Cuban economic statistics due to the factthat Cuba is not a market economy, it is gen-erally accepted that, with the demise of theSoviet bloc markets, Cuba’s GDP dropped byat least 35 percent. That was because theSoviet Union’s massive foreign aid to Cubacame to an end and because Soviet bloc mar-kets had long absorbed 80 percent of Cubanexports on a more or less guaranteed basis andsometimes at subsidized prices. In 1994 thepeso fell to a low of 180 to the dollar. This“special period” of economic difficulties con-tinues to this day.29 Tying in the impact of U.S.policy in a typically propagandistic manner,Cuban Communist Party Central Committeemember Raúl Valdés Vivó writes that the caus-

es of the “special period” of the 1990s are“basically two, which become only one.” Theyare “the tightening up—to insane levels—of theU.S. economic blockade at a time when Cubahad lost, with the disappearance of the SovietUnion, the external factor that allowed it toresist that economic blockade, the longest andmost inclusive ever suffered by any nation.”30

If ever the time was ripe for the embargoto do its work, the early 1990s was it. Indeed,it almost seemed reasonable that a little moresqueeze—the so-called Cuban Democracy Actof 1992 (the Torricelli Act)—might just bringCastro down. But by 1996, when the CubanLiberty and Democratic Solidarity Act(Helms-Burton Act) was passed, there wasnot the slightest chance that new legislationwould succeed. And it has done nothing butpump life into the old U.S. scapegoat for allCastro’s hopeless policies, put more fangs onthe imperialist bugaboo Castro so loves tocondemn, and antagonize the rest of theworld. Today, according to Amb. VickiHuddleston, “The purpose of the U.S.embargo on Cuba is simply to deny foreigninvestment, trade and finance that will buildup the regime.”3 1While U.S. policy has madeit more difficult for the Cuban governmentto do business in certain respects, it has beenneither as draconian as Valdés Vivó claimsnor as effective in achieving its objectives as issuggested by U.S. officials.

Cuban economic officials highlight the“diversification” and “restructuring” of theeconomy under market pressures.32 For ideo-logical reasons, they use these words in prefer-ence to “privatization” and “liberalization,”although there is no disguising that this ishappening to a limited degree. Minister ofEconomy and Economic Planning José LuisRodríguez speaks of the economy Cubans arebuilding as a “socialist economy with a mar-ket,” rather than using “socialist market econ-omy,” as the Chinese and Vietnamese do.33 In1992 the constitution was amended to abolishthe Soviet-style state monopoly on economicactivity, though state monopoly continues inmany areas and three-quarters of the Cubanlabor force still are employed by the state. The

8

If ever the timewas ripe for the

embargo to do itswork, the early

1990s was it.

reforms do recognize other economic struc-tures such as joint ventures and allow directprivate investment in selected sectors, witheducation and health care among thoseexcepted. Today some 400 enterprises in themining, petroleum, and sugar sectors haveparticipation by private-sector individuals. In1995 wholly owned private ventures were per-mitted, and in 1996 a system of industrialparks and free zones was introduced. In a bowtoward individual incentives, governmententerprises have introduced bonus schemesthat provide individuals who meet productivi-ty targets dollar accounts usable in dollarstores in tourist resorts. Those bonuses havebeen critical for peso-paid government work-ers who have little access to dollars.

Those measures have not turned Cubainto a Singapore, but they are more of a busi-ness school–like response to market forcesthan a reactionary socialist response. Themeasures have had some modest success.Although growth is now estimated by theIMF at 5.5 percent of GDP—an above-averagerate for the Caribbean region—the increasecomes after GDP declined by at least 35 per-cent after 1991.34 This recent improvementhas been achieved despite an unanticipated$500 million drain on foreign exchangereserves in 2000 caused by higher energycosts. The peso has stabilized at a rate of 21to the dollar. To a great extent, the markethas forced Cuba to diversify out of the for-mer Comecon markets, with no single for-eign country representing more than 12 per-cent of total trade. Domestic productivity isresponding to the various market pressures.In 2001, for example, 90 percent of the elec-tricity needed is expected to be generatedfrom indigenous fuels rather than importedoil, and private agricultural producers nowprovide nearly all the fresh produce used intourist hotels.3 5

Although the economy is hardly emulat-ing the growth path of the former Asiantigers and the country remains in a “specialperiod,” there is no sense of impending crisis.Instead, government officials project a quietconfidence that the necessary responses to

market forces have been undertaken. In thewords of one official: “We no longer have tobe magicians. We now have some oxygen.”3 6

Many Cubans would dispute that, havinglong contended that they do not benefitfrom a rising GDP or reconstruction that,they insist, is done mainly for tourists.Economy Minister Rodríguez acknowledgedin a report to the National Assembly inJanuary 2001 that the benefits of economicgrowth have not yet trickled down to theaverage Cuban.3 7 Succinctly expressing awidely held view, a state factory worker inMay whispered, “Fidel is a great guy, but it istime for him to move on.” He turned awayand then returned to add, “And soon!” In1981 a Cuban Ministry of the Interior surveyin the Vedado section of Havana found that,in one form or another, 71 percent of thepeople were “enemies of Fidel Castro’s gov-ernment.”3 8 Twenty years later dissidentsinterviewed in Havana likewise estimatedthat not more than about 30 percent of theCuban people support Castro today.

Foreign Investment

Cuba is making determined efforts toattract foreign investment. Once again, suc-cess is modest but not insignificant. Over thepast decade some $1.7 billion has been invest-ed and more than $6 billion in foreign capitalhas been invested or committed.3 9 Favoredsectors are petroleum, oil and gas, mining,tourism, light industry, agriculture, construc-tion, and telecommunications. More than halfof foreign investment comes from membercountries of the European Union and a fur-ther 20 percent from Latin America.

Although Cuba has no intention of turn-ing itself into a “fiscal paradise,” foreigninvestors receive incentives whereby they canavoid utilities and labor taxes so long as theamounts that would have been paid in taxesare reinvested in the enterprise. Dividendsand profits are 100 percent remittable,although anecdotal evidence from foreigninvestors suggests that actual profits to date

9

The market hasforced Cuba todiversify out ofthe formerComecon markets.

have been minimal. The CanadianDepartment of Foreign Affairs andInternational Trade advises Canadian com-panies considering the Cuban market that“Cuba is not for the timid or the unprepared.The risks are substantial.”4 0 A new arbitra-tion law has been passed for dispute resolu-tion. Cuba has entered into 53 overseas reci-procal investment agreements and 5 doubletaxation agreements. Three hundred ninetyprojects based on foreign capital are in hand,and, to date, Cuban officials say, no firm hasabandoned its investment. In the first twomonths of 2001, 250 fact-finding foreigninvestment missions visited the island. TheCuban authorities are able to be more dis-criminating about foreign investment sincethe early days of 1992 when a $5,000 invest-ment was considered sizable.4 1

Officials point out that 64 percent of for-eign investment has taken place since the1996 passage of the Helms-Burton Act thattightened the U.S. embargo against Cubaand established potential punitive actionsagainst foreign investors there. The efficacyof this act is disputed. Some investors occa-sionally demand anonymity to protect them-selves from the act, and Cuban officials assertthat the central bank is alert to the money-laundering potential of such schemes. Cubanofficials argue that no firm has canceled itsinvestment in Cuba. The U.S. InterestsSection, Havana, argues otherwise, sayingthat as of March 1998, 15 executives of threeforeign companies had been excluded fromentry into the United States and more than adozen companies had pulled out of Cuba oraltered their plans to invest because of thethreat of U.S. retaliation.42

The Cuban experience with foreign invest-ment has allowed officials to contemplatethe day when the U.S. embargo is lifted.Alarcón states that, when that time comes,American investors will see that Cubans are“no strangers to capitalism.” He has furtherpointed out that American investors mayalso discover that many of the choicestinvestment opportunities have already beenseized by earlier arrivals and that the govern-

ment will limit investments to those sectorsit believes will benefit the nation.

Tourism

Some of the great tourist spots from theheyday of American tourism before 1959continue to do a brisk business, among themthe Hotel Nacional and the Tropicana deCuba nightclub in Havana and the HotelCasa Grande in Santiago, all of which weremade famous by Graham Greene in Our Manin Havana. But most of the internationaltourist facilities have been built since 1990when tourism began its rapid expansion,often via joint ventures. The number of visi-tors increased at an annual rate of 18 percentfrom 340,00 in 1990 to 1,774,000 in 2000.Tourism is projected to grow at about 6 per-cent a year until 2010. Canada is the largestsingle source of tourists, but there are sizablenumbers from the larger European Unionstates, and efforts are under way to attractmore visitors from Asia.

Gross revenues grew from $243 million to$1.95 billion between 1990 and 2000.Tourism now makes a vital contribution tothe national economy, earning 43 percent offoreign exchange and employing nearly 9percent of the civilian labor force. Foreigninvestment has played a major role, withmore than 30 companies investing $1 billionsince 1990. By 2005 foreign companies willmanage some 50 percent of the total touristrooms, and foreign investors will control 20percent of total capacity. An ambitious con-struction program, based on a study byPriceWaterhouseCoopers, foresees new con-struction, including golf courses to be man-aged by the Professional Golf Association ofLondon.4 3

For the Cuban leadership, the touristindustry in particular raises tricky questionsabout both revolutionary purity and socialcohesion. While the influx of dollars is wel-come, indeed indispensable, tourism hasaccentuated the gulf between those Cubanswho have access to dollars and those who do

10

For the Cubanleadership, the

tourist industryin particular raises tricky

questions.

not. Because of the lack of economic oppor-tunities elsewhere in Cuba’s repressed econo-my, tourism has been accompanied by arevival of prostitution and some drug use.Further, in as much as ordinary Cubansunder normal circumstances are not allowedabove the ground floor of tourist hotels, thephenomenon of “tourist apartheid” hasemerged. Cuban officials acknowledge thatproblem and have mounted a vigorous pub-licity campaign to show the contribution oftourism to the renewal of domestic facilities.For example, the government has put pro-grams in place whereby exemplary workersand honeymoon couples can be granted spe-cial access to tourist hotels. But our conver-sations with ordinary Cubans indicate thatthose efforts appear to do little to address theundercurrent of serious resentment ofCubans who are denied access to facilities intheir own country. Thus Cuban interactionwith the rest of the world in the form oftourists is having at least some of the trans-formational effects desired but not achievedby Washington’s policy of isolation.

International Relations

For 400 years Cuba was controlled bySpain and then from 1898 to 1990 stronglyinfluenced by the United States and the SovietUnion, successively. For the past decade, how-ever, Cuba has more than ever before conduct-ed its own foreign policy and does so now in astyle compatible with the international sys-tem. It maintains diplomatic relations withsome 150 foreign countries. It is a UN mem-ber and founding member of the GeneralAgreement of Tariffs and Trade and the WorldTrade Organization. In their relations withCuba, foreign countries apply the normaldiplomatic techniques. They offer political,cultural, and academic exchanges; specialisttraining; meetings with opposition, humani-tarian, and religious groups; and commercialrelations. Britain, for example, has providedtraining for Cuban narcotics officials and forthe police; it has held exchanges on such sub-

jects as child abuse and child pornography; itoffers scholarships for study in the UnitedKingdom; it has conducted parliamentaryexchanges. Whatever their merits or demerits,none of those initiatives differs from the nor-mal approach used elsewhere by the UnitedStates in its dealings with developing nations.

European officials acknowledge the spe-cial U.S. circumstances and are careful not tocriticize the very different U.S. approach.They offer theirs as an alternative, saying, inthe words of one European diplomat inHavana, that dialogue and development“spring from engagement across the board.”They argue that relationships built in thisway allow them to raise human rights issues,including individual cases. The U.S. govern-ment is skeptical about that, tending tobelieve that the Europeans pull their punch-es on human rights.

EU officials claim that, while they object toit in principle, the Helms-Burton Act does notrepresent a practical impediment to invest-ment in Cuba. That attitude would havechanged radically if the Bush administrationhad not followed the lead of the Clinton teamin waiving for another six months the punitivemeasures under Title III of the act.

Alarcón claims that Cuba’s former sup-port for communist insurgencies in LatinAmerica and Africa was a reaction againstAmerican financing of counterrevolutionaryforces. That statement does not fit with theestablished facts of Cuban aid to theSandinistas in Nicaragua and the FMLN(Farabundo Martí National LiberationFront) in El Salvador. Nonetheless, as U.S.policy toward the region has moved on, sohas Cuban mischief-making. Cuba is part ofthe group of “friendly countries” involved inattempts to mediate the Colombian civil warand acknowledges good contacts with theFARC (Revolutionary Armed Forces ofColombia) and the ELN (National LiberationArmy). But, so Alarcón claims, these involvegood offices, not supplying lethal equip-ment. Most American officials agree with theDefense Intelligence Agency, which conclud-ed in a May 1998 report that “Cuba does not

11

As U.S. policytoward the regionhas moved on, sohas Cuban mis-chief-making.

pose a significant military threat to the U.S.or to other countries in the region.”4 4 Thatview is borne out in the State Department’sPatterns of Global Terrorism 2000. That reportcontinues to list Cuba as a state sponsor ofterrorism, less on the ground of activeinvolvement in contemporary terrorist activ-ity than because it offers safe haven to ETA(Euskadi ta Askatasuna) fugitives and to rep-resentatives of the FARC and ELN.45

One case that has drawn considerableattention is Cuba’s shooting down of twosmall planes flown by members of the Miami-based Brothers to the Rescue group inFebruary 1996. Four Cuban Americans werekilled in that incident, which sparked theimmediate passage of the Helms-Burton Act.High Cuban officials in interviews in Havanadenied that the government ordered theattacks. However, a Cuban agent was knownto have infiltrated the Brothers group fromthe day after the shoot-down, and a court trialcompleted in Miami in mid-2001 found fiveCuban nationals guilty of spying for Castroand one of conspiracy to murder in theBrothers case. The Cuban Communist Partypaper Granma hailed the five spies as “patri-ots” who were defending Cuba from “terroristactions by the Cuban-American mafia.”46

We must note that during 2001 Castrohas adopted an increasingly belligerent stylein international affairs, verbally reminiscentof his approach a couple of decades ago.Some examples include the following. First,in the UN Human Rights Commission voteto censure Cuba in April, only Venezuela sup-ported Cuba in voting no. Castro promptlycondemned all the others and celebratedwhen the United States was booted off thecommission several weeks later. Second,Castro charged that Latin American govern-ments at the Quebec summit allowed them-selves to become part of the latest U.S. impe-rialist scheme to “annex” them throughhemispheric free trade; Venezuela again wasthe only government not to go along fully.Castro hadn’t been invited, but he sent greet-ings to the protesters in the streets. EvenCanada, the host of the event and one of

Castro’s best international “friends,” tooksome punches. Third, Castro cultivated tiesto other countries that have expressed con-cerns with globalization, or the emergence ofthe U.S. “unipolar” world, beginning withVenezuela, where President Hugo Chávezperceives himself as the Fidel of the new mil-lennium. China’s president Jiang Zemin visit-ed Cuba in April; boisterous and often anti-American celebrations were held in Cuba onMay Day; and then Castro took off forAlgeria, Iran, Malaysia, Qatar, Syria, andLibya. At Tehran University, to chants of“Fidel, Fidel, Fidel!” he predicted the down-fall of the United States.4 7This shift must benoted, but it in no way justifies the continua-tion of current U.S. policy.

Biotechnology

Cuba’s achievements in the primary healthcare field are well-known; noteworthy featuresinclude availability of doctors, life expectancy,containment of HIV infection, and low infantmortality. Cuba’s reputation in this field hasled to a $20 million per year industry of healthtourism, mainly from Latin America, forpatients seeking to avoid much higher costs inthe United States. In the economic downturnsince 1990, Alarcón admits that health carehas suffered some setbacks, particularly acuteshortages of routine medications, althoughno hospitals have closed. (American profes-sional studies and recent emigrants fromCuba paint a much less upbeat picture andtalk of “serious shortages of medical sup-plies.”) Further, the rigid quarantine restric-tions that have underpinned the containmentof HIV would not pass muster with Westerncivil rights standards.48

But the biotech field has flourished, withsome 40 institutes in the immediate Havanaarea. It is a small part of the Cuban economy(less than 2 percent), but that it exists at all is acommentary on the embargo’s effectiveness.According to Cuban figures, biotech exportsare about $120 million per year. The FinlayInstitute has developed a formidable reputa-

12

People who dareto oppose theregime suffer

frequent harassment.

tion in the field of vaccines. Its main achieve-ment is the development of a vaccine againstMeningitis B (patented as Va-Mengoc-BC),which has been used extensively in LatinAmerica, Central America, and the Caribbeanand has recently been licensed to Smith KlineBeecham for use in the United Kingdom.British officials point to that accomplishmentas a unique instance of a biotech transfer fromthe Third World to the first. Other vaccinesthat the institute is readying for commerciallicensing are a leptospirpsis vaccine, a choleravaccine, and an improved diptheria+pertus-sis+tetanus (DPT) vaccine.49

Officials at the institute complain aboutthe embargo, which makes it difficult tomaintain easy access to scientific journalsand state-of-the-art medical equipment andto attend medical conferences in the UnitedStates. Again, the embargo has not preventedthis field from emerging, but it is clearlyimpairing research.

The American Connection

Of all the inconsistencies and aberrationsof the embargo policy, the most fascinating isthe increasingly dense network of Americancontacts with Cuba. For a country that is sup-posed to be suffering a near-total quarantine,Cuba fairly hums with American voices. Forexample, in February our hotel, the ParqueCentral, was crowded with a delegation fromNew York’s Metropolitan Opera. At the sametime a large delegation of up-and-comingbusiness leaders was in Havana under the aus-pices of the Young Presidents Organization,an international organization that includesyoung business leaders from the UnitedStates. They had dinner with Castro.

In all, nearly 80,000 Americans, not countingCuban Americans, visit Cuba each year. Someare there legally on journalist and culturalexchanges or on university travel and studyprograms. Others simply slip in through athird country or by sea. The MarinaHemingway, Havana’s premier yacht harbor,is full of American yachts. American visitors

receive a warm welcome. Visitors are constant-ly accosted by Cubans trying to practice theirEnglish, but the streets are safe, much more sothan those of Kingston, Jamaica, or San Juan,Puerto Rico. At the Ministry of Foreign Trade,María de la Luz B’Hamel comments, “We havelearnt to distinguish between Americans andtheir government.”

Corporate America is eyeing Cuba withinterest. It is estimated that some 3,400American business visits to Cuba took placein 2000.5 0The port authorities of such placesas New Orleans, Houston, Jacksonville, andBaton Rouge regularly visit their Cubancounterparts. More than 700 U.S. companieshave registered more than 3,000 trademarksin Cuba. Cuban officials point out that theembargo is entirely one-sided. There are nobarriers in Cuban law to U.S. dealings with orinvestment in Cuba. But the officials warnthat American corporations cannot expect toreceive preferential treatment if the embargois lifted. Having learnt from its experienceswith European and Canadian investors,Cuba will not lay down a red carpet for theAmericans. The Americans will “have tostand in line.”

Perhaps most curious is the role of theCuban Americans, whose numbers increase byat least 20,000 every year. That is the numberof visas given out annually by the U.S.Interests Section in Havana: 3,000 to “in-country refugees,” an equal number to joinfamilies in the United States, and 14,000 bylottery. In addition, many elderly Cubans inparticular are given visas to visit family mem-bers in the United States. Cuban Americanswho have lived in the United States for manyyears or decades are generally the most vocalsupporters of the embargo. According to apoll released in October 2000 by FloridaInternational University, three-quarters ofthem think the embargo doesn’t work well orat all.5 1 The same Cuban Americans sendapproximately $800 million annually to fami-ly and friends in Cuba, whereas all Cubans liv-ing abroad send an estimated $1 billion.5 2Thedollars may be sent by Western Union or, moreoften, carried by the 100,000 to 120,000

13

Nearly 80,000Americans, notcounting CubanAmericans, visitCuba each year.

Cuban Americans who visit Cuba annually. Ifthe objective of the embargo is to deny dollarsto the Castro government, then CubanAmericans, in their admirable humanitariansupport for their families, are the most consis-tent violators of the spirit and sometimes theletter of the sanctions.5 3Recent FIU and otherpolls suggest that the opinions of the Cuban-American population in Florida, even on pas-sionate issues such as the Elián González case,are much less absolutist than they are general-ly portrayed as being by the proponents andopponents of the embargo.54

In contrast to the busy pattern of relationswith the outside world, official exchangesbetween the U.S. and Cuban governments aresparse. There are contacts and discussionsbetween Cuban officials and the U.S. InterestsSection on immigration, narcotics, and the envi-ronment. Discussions usually take place in anatmosphere of mutual suspicion and recrimina-tion. On immigration matters, for example, eachside accuses the other of bad faith. The UnitedStates accuses the Cubans of dragging their feeton family reunion visas; the Cubans say that theCuban Adjustment Act encourages illegal (anddangerous) flight and has effectively reduced emi-gration from Cuba. Cuban officials have noexpectations of olive branches from the Bushadministration. Informal discussions are occa-sionally held as well, as when Marine Gen. CharlesE. Wilhelm, recently retired former head of theU.S. Southern Command, visited Cuba inFebruary 2001 as a “private American citizen.”Wilhelm talked with Cuban specialists about awide variety of subjects ranging from narcotraf-ficking and planes that fly from Miami to Cuba,such as those of the Brothers to the Rescue, toincreasing contacts between Americans andCubans with respect to the U.S. naval base atGuantanamo. A recurring theme was the needfor a more complete exchange of information onmany issues by both sides.55

Dissidents

Cuba’s dissident movement has drawnconsiderable attention in the United States

because its members are the most active sup-porters of greater democracy and strongerrights on the island. Cuban officials fromAlarcón on down told us to talk with anyonewe wished on our visit so long as our contactswere “correct” and not part of a U.S. govern-ment–sponsored initiative to undermine theCuban government. Indeed, dissidents arevisible and regularly attend functions at theU.S. Interests Section and at EU embassies.Alarcón added, however, that Washingtonand Miami might be surprised at how manyof the “dissidents” are in fact double agents.He warned, “You can never be sure who youare talking to.” The government, he conclud-ed, just tries to control the dissidents, notcrush them.

Alarcón admitted that the dissidentmovement is not simply a creature of theUnited States, but he insisted that the UnitedStates has long been exerting great effort to“create an opposition in Cuba.” The U.S.Agency for International Development hasdistributed 22 grants valued at about $10million. Recipients of government fundinginclude the Center for a Free Cuba inWashington; Freedom House in New York (afavorite target of Cuban leaders); and assort-ed business, university, and labor groups.5 6InMay 2001 a group of U.S. senators led byJesse Helms (R-N.C.), Bob Graham (D-Fla.),and Joe Lieberman (D-Conn.) proposed $100million in cash, food, medicine, telephones,fax machines, and other items to be distrib-uted in Cuba by nongovernmental organiza-tions (NGOs) over the next four years.5 7TheCuban Solidarity Act of 2001, if it is passed,“gives the President a mandate and authorityto increase all forms of U.S. support for pro-democracy and human rights activists as wellas nascent independent groups in Cuba” and“mandates that the President take a series ofemergency measures to hasten the liberationof the Cuban people.” Among the “emer-gency measures” are instructions to get allother “relevant U.S. agencies to increase sup-port to democratic opposition groups.”5 8

Even more than earlier legislation, this actis utterly misguided, except in the eyes of

14

Cuban Americanssend approxi-

mately $800 mil-lion annually to

family andfriends in Cuba.

people in the United States whose goals aremainly vengeance (for which the act won’twork) or votes (for which it may). The onlyother beneficiary of the legislation is FidelCastro.5 9Cuban foreign minister Felipe PérezRoque says the Cuban government supportsthe bill because “it is a move to convert intolaw and publicly recognize what it [theUnited States] has been doing until now,such as interfering in our country’s internalaffairs.”60 (Of course, in the 1950s Castro’s26th of July Movement, when fighting tooverthrow the government of FulgencioBatista, accepted arms and all kinds of otheraid from the United States and elsewhere.)

Many or most Cuban dissidents will notaccept money from foreign governmentsbecause, as dissident leader Héctor Palaciostold one of the writers, it “burns.” Cubangovernment intelligence is sophisticated andtracks and records the activities of CubanNGOs. Assuming an NGO is independentand not a Cuban government front, it mayplay a positive role delivering medicines, forexample. But its independence will be com-promised if it becomes an intermediary inpolitically related matters. For example, twoCzech visitors to Cuba were jailed for amonth in January–February when they deliv-ered a laptop computer and other items toCuban dissidents. They were charged withtrying to “promote internal subversion”because their trip had been paid for byFreedom House with U.S. government funds.At the end of May, some 40 Cuban “indepen-dent,” or dissident, journalists on the islandwho send their materials abroad held a pressconference in Havana to announce the for-mation of the country’s first independentassociation for journalists. Association presi-dent Ricardo González, former Moscow cor-respondent for Cuba’s official Prensa Latinaand now one of the country’s independentjournalists, was asked about the proposedU.S. aid for dissidents. “The government ofthe United States has the right to take suchmeasures as it considers pertinent,” he said,“and so do we, and our decision is not toaccept money from any government.”6 1

Other prominent dissidents have publiclyadopted the same position.6 2 Alarcón askshow Americans would react if Cubans sup-ported dissident groups, even throughNGOs, in the United States. (Indeed, if itmatched the U.S. effort on a per capita basis,Cuba would have to provide about $2.5 bil-lion in aid to American critics of Miami andWashington.)

In February, one of the present authors(and two other members of the AmericanJournalism Federation delegation) spent sev-eral hours in Havana with four dissidents,including Elizardo Sánchez, Héctor Palacios,and Oscar Espinosa. Our conversation rangedwidely over the past, present, and future. Thedissidents stated that there are about 300political prisoners in Cuba today, a figurewidely accepted by the U.S. Interests Sectionand major human rights organizations. Thisis only a small fraction of those held earlier inthe revolution, often under much crueler con-ditions. The government, they said, refers tothe dissidents as just “four cats” yowling in thedarkness. They said there are “several thou-sand” dissidents in the country, most of thempersonally known to each other.

While conditions improved slightly forPope John Paul’s visit to Cuba in January1998, they have declined every year since, andthis downward trajectory is expected to con-tinue during 2001. The harassment is “lowintensity,” the dissidents we spoke to say, andsometimes consists of picking a person upand dumping him off 30 to 50 miles from hishouse, leaving him with the substantial andpotentially expensive problem of gettinghome in a country with little transportation.Huddleston says: “People are imprisoned,but I’m not hearing about torture, I’m nothearing about arbitrary killings. . . . Wherethe oppression exists in Cuba, it is in regardsto freedom to move, freedom to talk, free-dom to invest in your own enterprise, free-dom to do what you want as an individual.”6 3

Education, dissidents say, is up to 40 per-cent propaganda, and those who work in thetourism industry must meet politicalrequirements. Dissidents argue that the gov-

15

Many or mostCuban dissidentswill not acceptmoney from for-eign govern-ments.

ernment’s response to discontent is repres-sion, not modernizing reforms. The embar-go, which all opposed, is a benefit to thehard-liners in the government, and FidelCastro in particular, since U.S. policy is ascapegoat for their own errors and crimes.Since “isolation is oxygen for totalitarians,”foreign visitors are much to be desired.Palacios told of the dissidents from 130–140organizations around the island who gath-ered in Havana in late 1999 for a “summit”that coincided with the Iberoamerican sum-mit being held in the capital at that time. Ina vote, some 90 percent called for a lifting ofthe embargo. It would be far better to beginthe transition while Castro is still around,they said, for there is great frustration andhatred among the people. The Helms-Lieberman legislation takes U.S. support forthe Polish Solidarity movement in the 1980sas its model, but the cases are very different.Poland’s longest border was with the hatedSoviet Union, and a major movement grew inopposition to Soviet imperialism. Castrocame to power as a popular caudillo, notmarching behind Soviet bloc tanks, andthere is no credible popular movement todayagainst him, nor will there be under any fore-seeable future conditions. A significant num-ber of Castro’s most passionate opponentsand critics live in exile, while domesticallyCastro maintains a tight political grip thatprevents any challenges to his power.

That Cuba’s human rights record is inde-fensible is beyond dispute. Cuba’s EU friendsdo not hesitate to condemn Cuba in UNhuman rights forums. And even Mexico, oneof Cuba’s staunchest supporters, hasexpressed concern over Cuba’s human rightsrecord.64 It may also be the case that, inPresident Bush’s words, “progress in thishemisphere requires an explicit commitmentto human freedom.” Bush celebrated the99th anniversary of Cuban independence onMay 20 with several hundred CubanAmericans in the White House. “Our goal,”he said, is “freedom in Cuba.”6 5 The debateover Cuba and some other countries such asChina and Burma revolves around whether

isolation or some form of engagement pro-vides the best means to advance this goal.The dissidents themselves have no doubtabout the answer. The vast majority arguesunambiguously that the embargo plays intothe regime’s hands. It gives the regime an all-purpose excuse for shortages arising frommismanagement and allows the regime torally Cuban public opinion and even signifi-cant support around the world.

Open Questions

Three questions are the subject of vigor-ous debate in the diplomatic and foreignbusiness community in Havana: Who willsucceed Fidel? Where is the revolution head-ed? When will the embargo end?

Cuban officials, with some support fromEuropean observers, assert that in certainrespects the transition has already takenplace. Of course, as a personality and publicorator, Castro still dominates the scene, andall big decisions remain in his hands. In addi-tion, he comes from genetic stock rich inlongevity. But, in a number of practical ways,the next generation is already in place.Alarcón stresses that the average age of mem-bers of the National Assembly is 43 and thata majority of the Central Committee waseither very young or unborn at the time ofthe revolution. American observers view thisanalysis skeptically, arguing that little changehas taken place and that Castro, as asupremely practical man, is doing all he canto maintain his total hold on power. In addi-tion to the well-known names of Raúl Castro,Carlos Lage, and Ricardo Alarcón, othersmentioned for possible post-Castro leader-ship include Francisco Soberón, president ofthe central bank; Ricardo Cabrisas Ruíz, min-ister of government; Marcos J. Portal León,minister of basic industry; and MarthaLomas Morales, minister of foreign invest-ment and economic cooperation.

Does the revolutionary spirit live on?Alarcón says Americans hopelessly “personal-ize” policy and conclude that as soon as Fidel

16

Even Mexico, oneof Cuba’s

staunchest sup-porters, has

expressed concernover Cuba’s

human rightsrecord.

is gone big changes will occur. Not so, he says.It is not uncommon to find younger Cubanofficials who take pride in what they view asCuba’s socialist accomplishments. But theirpassion seems to have more in common withScandinavian egalitarianism than with barri-cade-mounting ardor. Overall, there is a muchgreater sense that Cuba is a postrevolutionarysociety. In private, ordinary Cubans steer theconversation away from politics and towardtheir dreams of a better life. They have a pal-pable sense that the system is shortchangingthem, and, while European diplomats warnagainst ideas of a “Prague Spring,” there is lit-tle doubt that, given a free choice, mostCubans would send the present regime pack-ing. In fact, it is not just Americans who envis-age major changes soon after Castro’sdemise.6 6An analyst from Latin America withdecades of experience with the highest-levelCuban leaders told one of the authors in Maythat what links Castro and many influentialCubans today is not socialism but an interna-tional vision. Cuba has established a majorpolitical presence all over Latin America, andwhen Castro dies the new leadership may seekto advance that vision by merging Cuba’sexisting political ties with Cuban-Americanmoney in order to pursue the country’s eco-nomic interests in the region.

The official Cuban line is that the first pri-ority is the removal of the embargo. Manyforeign observers, however, conclude thatthis is not the case. Along with the dissidents,they believe that the embargo suits Castro’sand some of his supporters’ purposes well bydeflecting attention from their inadequacies.This is not to say that the regime would notwelcome some relaxation of the sanctions,for example as was proposed in mid-2000 forfoodstuffs, but only on terms they considerfavorable to themselves. Cuba would proba-bly much prefer to buy rice from Louisianathan from Thailand. But the regime is notprepared to make any concessions to allowthat to happen. Ironically, the embargo alsosuits Cuba’s trading partners well enough,shielding them from what might be over-whelming U.S. competition and from cur-

rent or future Cuban production of suchproducts as sugar, cigars, and rum. Alarcónjokes that European businessmen have askedhim to go slow on getting rid of the embargo.

Conclusion

The above should be seen as eyewitnessreports supplemented by the reporting andresearch of others. In so complex and con-trolled a society as Cuba, things are often notexactly what they seem. As it is in all commu-nist societies, disinformation is an essentialcomponent of government policy. Falseimpressions cannot be wholly avoided. Theoverall picture is a mixed bag. But no onetoday would return from Cuba exclaiming inthe manner of Lincoln Steffens about theSoviet Union that “I have seen the future andit works.” Cuba has very substantial prob-lems, mostly of its own making. Few if anyoutsiders now look to Cuba as a role model.That having been said, however, Cuba is nota country on its knees, praying for liberation.

Two very different policies are on displayvis-à-vis Cuba. On the basis of a clear intel-lectual construct that it must have no truckwith Castro, the United States follows a uni-lateralist policy of isolation, albeit one with21 single-spaced pages of Treasury-sanc-tioned exceptions.6 7 Some of the UnitedStates’ closest allies, including Canada, theUnited Kingdom, Germany, and Israel, dothe opposite, actively engaging with Cuba.

The core difficulty for those interested indebating U.S.-Cuba policy is that the discus-sion has lost nearly all connection with themerits of the case. U.S. officials argue that theydo not treat Cuba as a special case and thatU.S. policy there adheres to the norms for anycountry with which the United States has fun-damental differences over governance andhuman rights. But officials who find it essen-tial that Cuba be democratic before lifting theembargo have trouble explaining whyWashington lifted its embargo on NorthKorea, by any standards a more repressiveregime than Castro’s, and unapologetically

17

U.S. policytoward Cuba is 80to 90 percentdomestic politics.

justifies engagement with China. With someglee and much irony, Cubans remark on theserealities.68 Whether one supports or opposesU.S. policy toward Cuba, the claim that it isnothing out of the ordinary is clearly a red her-ring. Cuba is in every way a special case.Indeed, that may constitute the essence of theproblem. While the United States is broadlytolerant of a wide range of political and eco-nomic practices elsewhere in the world, inCuba it demands a higher standard. As onetop U.S. official said, U.S. policy toward Cubais 80 to 90 percent domestic politics and hasnothing to do with realities in Cuba orwhether the policy has any realistic prospect ofbringing about the democracy or peacefultransition Washington says it supports. Theembargo not only no longer serves America’sinterests; it has become a serious liability toboth the United States and Cuba.69

The new administration in Washingtonand the initiative for a free trade area of theAmericas (FTAA), launched at the Quebecsummit in April, should provide an idealopportunity to review this uneven approach.To varying degrees all the United States’potential FTAA partners trade with Cuba,some of them, such as Canada and Mexico, invery significant volumes. They do not do sobecause they believe that trade will deliverovernight results or because they oppose theAmerican objective of democratic progress inCuba. Instead, their rationale is based on com-mon foreign policy sense and on Americanmodels elsewhere in the world where econom-ic engagement has achieved some gratifyingresults. At the very least, “engaging” govern-ments are not interfering in the domesticaffairs of other nations.

After four decades of stasis, it is surelytime to accept the logic of this approach. TheReagan view of free trade as a “forward strat-egy for freedom” should be applied to Cuba.These actions should be taken unilaterally sothat Fidel Castro cannot veto our policy, ashe has so often done in the past. The UnitedStates should

• adopt the logic of U.S. policy toward

China that the best way of achievingreform in Cuba is through engagement,including the revocation of all legisla-tion currently constituting the econom-ic embargo in its many ramificationsand the establishment of diplomaticrelations with the Cuban government;

• withdraw existing U.S. governmentfunding, through whatever form ofNGO subterfuge, of activities that areclearly an interference in the domesticaffairs of Cuba and reject the proposed$100 million increase in funding forsuch activities; truly private support forsuch groups would not be a matter ofgovernment policy; and

• remove restrictions on visits byAmericans to Cuba and Cubans to theUnited States.

Those actions would return U.S. policytoward Cuba to reality. Policymakers seem tothink they can operate effectively out ofWashington and Miami, or by speeding in amotorcade from the José Martí InternationalAirport to the bunker that is the U.S.Interests Section. That is no way to graspreality, and a firm grasp on reality is perhapsthe greatest missing element in the debate.

Notes1. David E. Sanger, “Bush Links Trade withDemocracy at Quebec Talks,” New York Times, April22, 2001, p. A1.

2. George W. Bush, “A Distinctly American Inter-nationalism,” Speech at Ronald Reagan PresidentialLibrary, Simi Valley, California, November 19, 1999.

3. George W. Bush, Speech to Los Angeles WorldAffairs Council, May 29, 2001; and “Bush Aims toExtend China Trade Relations,” Washington Post,May 30, 2001, p. A6. Secretary of State Powellmakes very similar arguments in Colin L. Powell,“The Promise of China Trade,” Washington Post,June 1, 2001, p. A31.

4. Karen DeYoung, “President against RelaxingCuban Economic Sanctions: Increase in U.S. Aidto Dissidents Supported,” Washington Post, May19, 2001, p. A5. The continued application ofsanctions comes despite Powell’s own description

18

The embargo notonly no longer

serves America’sinterests; it has

become a seriousliability to both

the United Statesand Cuba.

of them as showing “a degree of American hubrisand arrogance that may not, at the end of the day,serve our interests all that well.” Quoted in RobinWright, “Powell Intends to Curb Use ofSanctions,” Los Angeles Times, January 22, 2001.On the Senate bill, see S. 894, Cuba Solidarity Actof 2001. See also Christopher Marquis, “Helmsand Lieberman Seek to Aid Dissidents in Cuba,”New York Times, May 16, 2001, p. A14.

5. Quoted in Anthony DePalma, “QuebecSummit Gives Bush Forum to Push Free Trade,”New York Times, April 20, 2001, p. A1.

6. Colin L. Powell, Senate Confirmation Hearing,January 17, 2001, http://www.state.gov/secretary/index.cfm?docid=443.

7. Craig Johnstone, January 17, 2001, http://www.uschamber.org/Press+Room/2001+Releases/January+2001/01-11.html.

8. An active discussion is under way elsewhere onthis topic. See a draft UN paper at http://www.globalpolicy.org/security/sanction/gensanc/2001/0202chg.htm. For a useful analysis of U.S. sanc-tions policy, see Richard N. Haass and Meghan L.O’Sullivan, Honey and Vinegar (Washington:Brookings Institution, 2000).

9. See William Ratliff and Roger Fontaine, A StrategicFlip-Flop in the Caribbean: Lift the Embargo on Cuba(Stanford, Calif.: Hoover Institution Press, 2000); andPhilip Peters, “A Policy toward Cuba That Serves U.S.Interests,” Cato Institute Policy Analysis no. 384,November 2, 2000.

10. Hugh Thomas, The Cuban Revolution (NewYork: Harper Torchbooks, 1977), p. 713.

11. Stefan Halper, “Winds of Change acrossCuba,” Washington Times, October 10, 2000, p. A16.

12. “El gran ‘problema,’” editorial, Encuentro en laRed, May 30, 2001. Encuentro en la Red is the Internetarm of Encuentro de la Cultura Cuba, the most presti-gious Cuban exile (Madrid) publication.

13. Vicki Huddleston, “U.S.-Cuba Relations afterElián González,” in Press and Culture Office, U.S.Interest Section, Havana, Cuba Update, April 2001.See also Steven Gutkin, “Castro Praises ColinPowell,” Washington Post, May 12, 2001.

14. On the question of Internet access, see Taylor C.Boas, “The Dictator’s Dilemma: The Internet and U.S.Policy toward Cuba,” Washington Quarterly 23, no. 3(Summer 2000): 57–67. On May 3, 2001, theCommittee to Protect Journalists named Castro oneof the world’s top 10 enemies of a free press, the fifthtime Castro has made that list. See http://www.cpj.org.

15. Human Rights Watch, Cuba’s Repressive Machinery:Human Rights Forty Years after the Revolution (New York:Human Rights Watch, 1999), http://www.hrw. org/hrw/reports/1999/cuba; and Amnesty International,Report 2001, http://web.amnesty.org/web/ar2001.nsf/webamrcountries/CUBA?OpenDocument.

16. American and European officials calculate thatsome one-third of the paladares have been closed byministerial order over the past two years. The own-ers of such establishments to whom we spoke con-firmed that they live in constant apprehension ofbeing taxed out of existence or simply closed downfor some arbitrary violation of the law.

17. Quoted in Ron Howell, “Ordinary CubansFeel the Lure of Capitalist Dollars,” Miami Herald,April 29, 2001.

18. Ibid.

19. Further details on the endless search for waysto make ends meet may be found in DavidGonzalez, “In Castro’s Changing World, ClashingVoices,” New York Times, May 30, 2001, p. A4.

20. J. A. Fornaris, “Censo de población crea temoren La Habana Vieja,” El Nuevo Herald, May 29,2001.

21. “The Economic Impact of U.S. Sanctions withRespect to Cuba,” U.S. International TradeCommission, Publication 3398, February 2001,pp. xiii–xiv. This study, notably chap. 3, also con-tains much useful sectoral data on the Cubaneconomy.

22. Ibid.

23. In diplomatic circles in Cuba there is an activedebate about whether removal of the embargo isreally a priority target of Cuban leaders. Manyobservers believe that, despite lip service toremoval, the top Cuban leadership is content tosee the embargo continue as a convenient scape-goat for its own inadequate policies.

24. On Title III, see Mark Groombridge, “Missingthe Target: The Failure of the Helms-Burton Act,”Cato Trade Briefing Paper no. 12, June 5, 2001,esp. pp. 3–6. See also “Bush Announces TighterLine on Cuba,” Associated Press, July 13, 2001;and Tim Johnson and Nancy San Martin, “Bush:Ban on Cuba Lawsuits Remains,” Miami Herald,July 17, 2001.

25. Ricardo Alarcón, interview with author,February 26, 2001.

26. A recent dramatic example was the March 24,2001, reunion of Bay of Pigs adversaries that was

19

joined by Castro. See Kevin Sullivan, “Vets Returnto Bay of Pigs to Remember, Reconcile,”Washington Post, March 25, 2001, p. A22.

27. Sergio G. Roca, “The Comandante in HisEconomic Labyrinth,” in Conflict and Change inCuba, ed. Enrique Baloyra and James Morris(Albuquerque: University of New Mexico Press,1993), p. 88.

28. Evelio Vilarino Ruíz, Cuba: Socialist EconomicReform and Modernization (Havana: Editorial JoséMartí, 1998), p. 164.

29. The Cuba section of Central IntelligenceAgency, The World Factbook (Washington: CIA,2000) also uses these figures.

30. Raúl Valdés Vivó, foreword to Vilarino Ruíz,Cuba, pp. 14–15.

31. Huddleston.

32. The following sections draw on conversationswith such officials as Maria de la Luz B’Hamel,Ministry of Foreign Trade; Ernesto Sentí Darias,first vice minister, Ministry of Foreign Investmentand Economic Cooperation; and EnriqueMartínez Ovide, vice minister of the economy.

33. See Valdés Vivó, foreword, p. 17. Vilarino Ruíz isone of the few Cuban economists who see (oradmit) that “the Chinese and Vietnamese experi-ences have become references by which to accessour own initiatives” (p. 102). In particular, see hisdescription of the socialist market system beingdeveloped in China, Vietnam, and Cuba, the latter,we would add, in its very earliest stages (pp. 75–78).

34. Comparative figures for Caribbean growth areavailable in International Monetary Fund, WorldEconomic Outlook (Washington: IMF, 2000), pp. 207–8.

35. Foreign technology, especially from Israel, hasbeen particularly helpful in the agricultural sector.

36. Ernesto Sentí Darias, first vice minister, inter-view with author.

37. See Anita Snow, “Cuba Creeping toward EconomicRecovery,” Miami Herald, January 11, 2001; and CarlosBatista, “Mejora la economía de la isla, pero no para elpueblo,” El Nuevo Herald, November 26, 1999.

38. Juan Antonio Rodríguez Menier, Inside theCuban Interior Ministry, ed. William Ratliff (Wash-ington: Jamestown Foundation, 1994), p. 61.

39. These figures are derived from Cuban sourcesbut are confirmed by the State Department andthe U.S.-Cuba Trade and Economic Council, New

York. See http://www. cubatrade.org/foreign.html.

40. Canada, Department of Foreign Trade andInternational Trade, Cuba: A Guide for CanadianBusinesses, Ottawa, June 1999.

41. The full legal framework governing foreigninvestment is set out in Law 77 promulgated onSeptember 5, 1995.

42. U.S. Interests Section, Press and Culture Office,Havana, “Cuba: Country Information,” CubaUpdate, April 2001. For a masterly dissection of theHelms-Burton legislation, see Joaquin Roy, Cuba,the United States and the Helms-Burton Doctrine:International Reactions (Gainesville: University ofFlorida Press, 2000).

43. This section draws on an interview with MiguelAlejandro Figueras, adviser to the minister oftourism. PriceWaterhouseCoopers, the interna-tional consultancy group, has prepared a strategicplan for the development of Cuban tourism.

44. Defense Intelligence Agency, “The CubanThreat to U.S. National Security,” prepared incoordination with the Central IntelligenceAgency, the Department of State’s Bureau ofIntelligence and Research, the National SecurityAgency, and the U.S. Southern Command JointIntelligence Center. There are still occasionalreports of alleged Cuban involvement of somesort with guerrillas abroad. See Gonzalo Guillen,“Apresan a guerrillero cubano en Colombia,” ElNuevo Herald, June 5, 2001.

45. U.S. Department of State, Patterns of GlobalTerrorism 2000, April 2001, http://www.state.gov/s/ct/rls/pgtrpt/2000/index.cfm?docid=2441. Seealso Defense Intelligence Agency, The Cuban Threatto U.S. National Security, May 1998, discussed inRatliff and Fontaine, pp. 30–35.

46. “Conducta heroica en las entrañas del mon-struo,” Digital Granma Internacional, June 20, 2001,pp. 20–21.

47. Anita Snow, “Castro Criticizes Latin Nations,”Washington Post, April 26, 2001; Anita Snow,“Castro Mocks Americas’ Trade Plan,” WashingtonPost, May 1, 2001; and personal observations onMay Day in Cuba.

48. Michele Barry, “Effect of the US Embargo andEconomic Decline on Health Care in Cuba,”Annals of Internal Medicine 132, no. 2 (January 18,2000): 151–54; and Myriam Marquez, “Bad Joke:Health Care in Cuba,” Orlando Sentinel, September29, 2000.

49. This section is based on a visit to the Finlay

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Institute and an interview with its president, Dr.Ricardo Montero Martínez. In answer to a friendlyquestion, officials at the institute said that, no, theinstitute was not engaged in germ warfare prepara-tions. In support of this, it may be noted that theUnited States makes no charges against Cuba inthe chemical and biological warfare arena.

50. Joe Sharkey, “Business Travel; Trips to Cubafor Commercial Reasons Are Increasingly Becom-ing a Reality for Americans,” New York Times,January 10, 2001.

51. Florida International University, Institute forPublic Opinion Research, “2000 FIU/Cuba Poll.”These polls, conducted every three or so years byFIU, give by far the most detailed picture availableof the views of the Cuban-American communityin South Florida. See http://www.fiu.edu/orgs/ipor/cuba2000/index.html.

52. Exact remittances are impossible to calculatesince the amount sent or delivered almost cer-tainly far exceeds the amount that is legally per-missible. The figure of $800 million is fromHuddleston. The $1 billion is estimated inEncuentro en la Red, May 30, 2001.

53. Former citizens of Cuba returning to visit theisland must do so on their Cuban passports. Theyare not counted in the statistics on foreign visi-tors, and they are subject to arbitrary treatmentby the Cuban government.

54. David Gonzales, “Cuban Exiles Mark a PainfulAnniversary in Miami,” New York Times, April 23, 2001,p. A7. See also Florida International University.

55. Carol Rosenberg, “Former Southcom Chiefon Tour in Cuba,” Miami Herald, February 14,2001; and an internal report on the issues coveredat the meetings.

56. Karen DeYoung, “More U.S. Aid Sought forCuban Dissidents,” Washington Post, March 8, 2001.

57. Christopher Marquis, “Helms and LiebermanSeek to Aid Dissidents in Cuba,” New York Times,May 16, 2001.

58. The Cuban Solidarity Act of 2001, http://foreign.senate.gov/solidarity.html.

59. See Andrew Reding, “Playing into Castro’sHands,” Washington Post, May 23, 2001, p. A33.

60. “Washington Has Lost Its War against Cuba,”Granma International, electronic edition, May 25,2001.

61. “Crean la sociedad de periodistas independi-entes ‘Marquez Sterling,’” El Nuevo Herald, June 1,2001.

62. Pedro Pablo Alvarez Ramos and HectorPalacios Ruíz, “Aid We’d Rather Not Receive,”New York Times, June 18, 2001, p. A16.

63. Huddleston.

64. “UN Human Rights Body Faults Iran,” NewYork Times, April 20, 2001.

65. Quoted in Charles Babington, “Bush Calls forOpen Economies in Latin America,” WashingtonPost, April 20, 2001. See also Randall Mikkelsen,“Bush Stands Firm on Cuba Sanctions, SlamsCastro,” Reuters, May 18, 2001.

66. Ratliff and Fontaine, pp. 52–56, suggest thepossibility of a Chinese-style state-guided but seri-ous market-oriented reform program.

67. See Federal Register 64 no. 92 (May 13, 1999):25808-20.

68. George Gedda (Associated Press), “CubaMuses about North Korea’s Power,” WashingtonPost, October 24, 2000.

69. Ratliff and Fontaine, esp. pp. 14–15, 30–35.

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