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Obama’s Cuba Opportunity

After 50 years of perfect policy failure, the U.S. has a political opening to help a reforming Cuba prosper.
Cuba capitol car

George Washington’s farewell address did more than warn against permanent alliances that could “entangle” our young Republic in the “ambition” and “rivalship” of others in ways that do not serve our national interest.

He warned equally against America making enemies. “Observe good faith and justice towards all nations; cultivate peace and harmony with all,” was his first principle. To engage in “permanent, inveterate antipathy” toward other powers would make us “subservient to projects of hostility instigated by pride, ambition, and other sinister and pernicious motives.”

If ever there was a case of “permanent, inveterate antipathy” in U.S. foreign policy, it is found in American policy toward Cuba. During the Cold War it was justified by a circumstance well beyond the first president’s 18th-century imagination: a close neighbor allied with a nuclear-armed Moscow dedicated to our demise.

But the policy lives on two decades after the Soviet Union’s own demise, serving no constructive purpose toward Cuba and harming U.S. relations in the hemisphere. With two years left to serve, President Obama has an opportunity to score a victory for his legacy and the national interest by putting U.S.-Cuba relations on a new course, beginning with an overhaul of the U.S. embargo.

For six years President Obama has shown little interest in Cuba, but at a fundraiser one year ago in Miami, he seemed to be searching for new options.

“We’ve started to see changes on the island,” the President said, and “we have to continue to update our policies” with a “creative” and “thoughtful” approach. “Keep in mind,” he added, “that when Castro came to power, I was just born. So the notion that the same policies that we put in place in 1961 would somehow still be as effective as they are today in the age of the Internet and Google and world travel doesn’t make sense.”

Indeed. Nor does it make sense to imagine that U.S. sanctions exert meaningful political pressure on the government comfortably in power in Havana for 55 years—or that those sanctions don’t in some measure hurt the Cuban people who cannot be held responsible for a revolution that rocked the Eisenhower Administration.

Barack Obama is the 11th U.S. president to face socialist Cuba. But he is the first who can see the next generation of Cuban leadership on the horizon, with Raul Castro committed to end his presidency in 2018. And he is the first to see a Cuba embarked on a wrenching process of internal change that is opening the economy, expanding personal autonomy, and even increasing some civil and economic liberties. Obama has a strategic opportunity afforded to none of his predecessors: to change U.S. policy in ways that complement positive changes in Cuba, enhancing the impact of Cuba’s reforms and encouraging further change ahead.

Ten years ago, Cuban citizens could not travel abroad without a government exit permit. Cell phones were available to officials, foreign businessmen, and tourists, but not average Cubans. Hotels and resorts were reserved for foreigners only. Computers were not for sale, only components. Cubans could only sell cars of 1959 or earlier vintage. Home sales were illegal even though 85 percent of Cuban families hold title to their homes. And an unannounced policy capped the number of licenses to engage in private business at about 150,000.

All those prohibitions are gone today.

Cubans are traveling wherever they can get a visa, and the United States granted 19,500 visitor visas in the first half of this year. Cuban dissidents now visit Washington, Miami, and European capitals regularly—then they return home and travel again. Private brokers and online listing services are sorting out supply and demand in a new residential real estate market. Internet connectivity remains limited and expensive, but it is improving and 1.9 million Cubans—more than one-fifth of the adult population—now have cell phones, some now with access to e-mail.

New economic policies have led to an explosion of small enterprise, where nearly half a million Cubans—triple the number of four years ago—are working in service businesses of all kinds. Larger private businesses, legally organized as cooperatives, are emerging; some of the 600 in operation are state enterprises that have been turned over to their workers, while others are start-ups that began with citizen applications. Market-based agriculture has expanded with land grants to 170,000 private farmers and cooperatives, and the agriculture bureaucracy is being pared back gradually. The government has trimmed its payroll by 650,000 workers, and ultimately expects 45 percent of the workforce to be occupied in the private sector. A new foreign investment law was approved last March, and the courtship of potential investors is under way.

All this is due to reforms led by Raul Castro, who took office after 47 years of his brother’s governance, declaring that he is “tired of excuses” and that if the economy is not fixed, “we will go under.” If the reform program, now at its mid-point, does not succeed and deeper actions are needed, this 83-year-old leader will have made the job easier for the next generation by making it the official position of the Communist Party that the economy is not “sustainable,” the state is too big, the private sector needs to grow, and the party must drop the “stigmas and prejudices” that it has held toward private entrepreneurs. Among Cubans, it does not go unnoticed that he has upended three Fidel Castro decisions that mark the socialist state’s economic history: the stigmatization of foreign investment in the early 1960s, the “revolutionary offensive” that wiped out remaining small businesses in 1968, and a 1986 “rectification” campaign that ended an experiment in free-market sales of farm produce.

In contrast to the clear new direction in economic policy, there is no reform of Cuba’s political system. But there is ferment. There is more open debate about economic policy, including criticism of the government from left and right. Stodgy state media, under fire even from top officials, are improving glacially in response to the access to information provided by the Internet and other sources. Catholic journals push for deeper and faster reform, including in the political sphere. Long-term political prisoners were released in 2010, as were thousands of common criminals. The government still disrupts dissident activities—but it now uses short-term detention rather than the old practice of 20-year prison terms, so that last May, a U.S. official counted “six or seven” political prisoners in Cuban jails. Alongside a dissident movement that, even with longstanding U.S. support, has not ventured into retail politics, blogger Yoani Sanchez stands out for her recent innovation: she started a lively online newspaper whose site was blocked during its first days of publication, but is now available to Cubans on the Internet and on memory sticks passed from hand to hand.

The Cuba that President Obama faces, then, is far from fully transformed—but it is changing in positive ways. While the one-party state persists, the newfound abilities of Cubans to travel, communicate, transact property, and start businesses count objectively as human rights improvements. The security threats that once emanated from Havana—support for revolutionary movements, Soviet ties—are no more.

If any country but Cuba were at issue, we would jettison a policy of non-recognition, limited official contacts, and economic punishment that has yielded nothing. We would stick to our guns regarding human rights and political differences, but would express those differences in a context of mutually beneficial diplomatic and trade relations.

But in that Cuba is involved, electoral politics creates paralysis in Congress, and hesitation in the executive branch. But the political equation surrounding Cuba has changed dramatically, and no one knows that better than Obama himself.

As recently as 2000, Cuban Americans broke three-to-one for Republicans in Presidential elections, but no more. In 2012, exit polls showed them splitting 50-50 between President Obama and Gov. Mitt Romney. Considering that the president had mildly liberalized Cuba policies in his first term and Governor Romney was calling for a return to President Bush’s hardline policies, this was a shocking result.

But it was not a fluke: it reflects changing policy preferences in a Cuban-American community increasingly populated by younger generations and more recent immigrants. A 2014 Florida International University (FIU) poll showed that for the first time since its surveys began in 1991, a majority of Cuban Americans, 52 percent, wants to end the embargo. (During the 1990s, five FIU polls showed average 85 percent support for the embargo.) Among those under age 30, 62 percent want to end the embargo and 88 percent want to re-establish full diplomatic relations with Havana.

Elites are changing too. Last February, sugar magnate Alfonso Fanjul, a long-time supporter of Cuba sanctions, told the Washington Post about his visits to Cuba, and expressed a desire to invest there. Facundo Bacardi, scion of another family that lost a fortune in Cuba and has been instrumental in key sanctions legislation, told Cigar Aficionado that his family is now divided on the embargo question. The Cuba Study Group, led by businessman Carlos Saladrigas, has become a forum where many long-time hardliners search for new approaches. Many of its members have visited Cuba and support entrepreneurial education programs offered by the Archdiocese of Havana.

It is no wonder that politicians—so far, only Democrats—see that the pro-embargo voting bloc has been neutralized. Charlie Crist, the first major Florida gubernatorial candidate to call for ending the embargo, lost the November 4 election by one point. Hillary Clinton has called for normalized relations and an end to sanctions, and is poised to be the first major presidential candidate to hold that view. A nationwide poll released last February by pollsters Glen Bolger and Paul Maslin showed 56 percent support for normalization of relations with Cuba; the same poll included a Florida sample that showed 63 percent support for normalization.

In response to change in Cuba and in the U.S. electorate, Cuban-American hardliners have adopted the simple tactic of denial.

Rep. Mario Diaz-Balart calls the Bolger-Maslin survey a “push poll” and Rep. Ileana Ros-Lehtinen says the FIU poll is “misguided.” They, Sen. Marco Rubio, and many others describe the changes in Cuba with the same word: “cosmetic.” This puts them at odds with reality in Cuba and with the views of many of their own constituents as revealed by their behavior.

During his first term, President Obama allowed Cuban Americans to travel to Cuba and send money to their relatives without restriction. Given that freedom, Cuban Americans have become champions of engagement: 300,000 traveled to Cuba last year and estimates of their current annual remittances range as high as $3.5 billion. Many are investing in family businesses and in real estate purchased in the name of their relatives on the island. To them, the changes in Cuba are hardly “cosmetic.” In his interview, Facundo Bacardi surely spoke for many of these Cuban Americans in assessing Cuba’s changes: “The society is slowly opening up a bit, and there are reforms. So long as the reforms continue, the people who benefit the most are the Cuban people … they’re implementing these changes in piecemeal fashion over a period of time. The question is, will Raul [Castro] go all the way, or will he not?”

Another question is how far President Obama will go.

If, as he suggested in his Miami remarks, he takes a long look back to 1961, he will discern a paradox in U.S. policy toward Cuba, one hard for a superpower to admit—that the harder we have tried to bring down the socialist government, the grander our failures have been.

The embargo was originally conceived in a 1960 State Department memorandum as a way to deny “money and supplies to Cuba, to decrease monetary and real wages, to bring about hunger, desperation and overthrow of government.” It failed. So did an amphibious invasion by exiles in 1961 at the Bay of Pigs; President Kennedy’s Operation Mongoose, a campaign of propaganda and sabotage; and the CIA’s attempts to assassinate Fidel Castro.

With Cuba in economic crisis after the fall of the Soviet Union, we tightened the embargo in 1992 and 1996 in the hope that new, targeted pressures would push Havana over the brink. A decade later, based on the same hope, President George W. Bush tried more systematically than any President to stem flows of hard currency to Cuba, even strictly limiting family visits and remittances. He named a “Cuba Transition Coordinator” in the State Department for a transition that his policies failed to produce, and the post has since been abolished.

President Obama has continued most of the Bush policies, including amateur-hour covert operations run by the U.S. Agency for International Development (USAID). One resulted in the 2009 jailing of U.S. contractor Alan Gross as he set up satellite Internet systems with WiFi hotspots in Havana and beyond. Another established a short-lived Twitter-like service for Cuban cell phone users, using polls to collect data on their political views for later use in political mobilization.

In this perfect record of failure, U.S. tactics have changed but the supposition is the same: we envision Cuba to be one spark short of a political uprising, and we seek to provide that spark. Time and again, the U.S. government miscalculates politics inside Cuba and blithely assumes that its operatives will outwit Cuban intelligence services on their own turf.

Taking a fresh look, President Obama could expand his first-term policies with new travel measures, but the opportunity seems greater than that, and this moment calls for more.

If he is really examining fundamentals, he will ask: If the embargo didn’t exist, would we invent it in 2014?

Probably not. Most likely, the President views Cuba as Senator Rubio views communist China. “I’ve never accepted the idea that we wanted to contain China,” he told CNN during an Asia tour last January. “We welcome a China that’s richer and more prosperous, because that’s a potential trading partner, customers for our products and services.” The rest of Rubio’s approach is to be vigilant on human rights and to ensure that China doesn’t interfere with its neighbors.

That’s not a bad approach to apply to the communist country in our own neighborhood. And it would begin by declaring, as Rubio does regarding China, that the U.S. national interest is served not by weakening the Cuban economy, but by helping Cubans to prosper.

Using his executive authority, President Obama could permit Americans to build economic relationships with Cuba’s expanding private sector. He could open up two-way trade in goods and services, excepting only those with security or military application.

Instead of wasting more money on blundering USAID projects, he could permit U.S. communications and technology companies to do business in Cuba. Indeed, he should turn U.S. policies in communications, health care, and many other sectors upside down, replacing the embargo’s restrictions with the presumption that links in these areas will serve both nations’ interests.

President Obama should stop designating Cuba as a “state sponsor of terrorism”—a label that his own annual reports no longer even attempt to justify, that devalues America’s word on international terrorism issues, and that triggers special Treasury Department sanctions against Cuba’s international financial transactions.

A broad liberalization of trade and travel would, for the first time in 50 years, remove the clunky U.S. bureaucracy from center stage and replace it with the free exercise of citizen contacts. A wave of visits, information, ideas, citizen projects, and commerce would result.

The two governments should use stronger diplomacy to address law enforcement, migration, health, environmental, and security issues that affect us as neighbors. In that diplomacy, there should be discussions of releasing prisoners and rendering fugitives, and President Obama should live up to his responsibility to negotiate for the release of Alan Gross, who was sent to Cuba on his watch.

President Obama could even take a page from President Reagan’s policy toward the Soviet Union by promoting exchanges between students, scientists, artists, and local officials.

This new policy, neither liberal nor conservative, would be in the mainstream of American foreign policy. Nearly all Democrats, many Republicans, the U.S. business community, American farmers, half the Cuban American community, and all of Latin America and the Caribbean would applaud. In short order, the policy would be as unremarkable as our full diplomatic and trading relationships with communist China and Vietnam.

Our nation would gain a stronger, more productive relationship with an estranged neighbor that is setting a new course for itself. And we might end the biggest embargo of all—our self-imposed embargo on American influence in Cuba.

Philip Peters is President of the Cuba Research Center in Alexandria, Virginia.