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Cuban Economic Policy Changes in the Context of U.S.-Cuba Relations

Explore the deep structural changes in Cuba's economy post-2008, foreign and political policies and an analysis of U.S. relations. Discover the progress, challenges, and future prospects.

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Cuban Economic Policy Changes in the Context of U.S.-Cuba Relations

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  1. The Cuban update and U.S. Cuba Relations Dr. Raúl Rodríguez Rodríguez Center For Hemispheric and United States Studies, University of Havana

  2. The Context • World Economic Crisis 2008 • 2008 Cuba hit by two hurricanes “ back to back” • Demographic Change, low population growth • Low GDP growth rates

  3. Draft Guide for Economic and Social Policy, October, 2010 • Submitted to workplace debate and neighborhood debate • Approved by party congress and national assembly • No definite timetable to implement • Some Implementation through pilot projects

  4. Deep Structural Transformations • Downsizing of state apparatus and payrolls. • Expansion of private individual property and non agricultural cooperatives. (35% of GDP by 2015) • Redistribution of land from big state farms in usufruct. • Reform credit policy for private and individual activity. • Reform State enterprises, eliminating subsidies and granting more autonomy.

  5. Foreign Trade Sector • New Law of foreign investment • All sectors open to FDI ( except health, education and the military ) • A more expedite and less centralized process of approval FDI. • Creation of Special Development Zones. • Assurances against expropriation, tax breaks and other incentives to foreign investors. • Cuban employment agency as facilitator, workers can negotiate contract with foreign employers.

  6. Next Steps • New Credit Policy • Price and monetary reform • Update Cuban tax code • Salary reform ( Doctors and health workers) • Elimination of the dual currency system ( Process started, no timetable defined)

  7. Political Changes • Process of transfer from the old to the new generation. • Constitutional reform. ( limit mandate of government and elected officials) • Removing excessive prohibitions. ( most significantly travel, emigration and relation with Cubans abroad)

  8. Foreign Policy • Cuba has diplomatic relations with 184 states • Continued Internationalist cooperation ( South – South ) • Relations with 34 Western Hemisphere states, except the U.S. • Increased prestige in the LAC region ( guarantor of Colombian peace process) • Diversify trading partners • Renegotiating foreign debt

  9. Obama policy toward Cuba • 2008 expectations ( Obama Administration toned down rhetoric) • Few initial changes “ campaign promises” to Cubans in the U.S. • People to people academic and cultural exchanges (Purposeful travel) • Renewed some level of contact and technical cooperation

  10. Instances of technical cooperation • Drug interdiction ( Coast Guard ) • Alien smuggling interdiction • Aviation Security • Military to Military (Guantanamo “Gate Talks”) • Response to Oil Spills ( Multilateral Mexico, Bahamas, United States, Cuba)

  11. Other contacts • Renewed talks evaluate migration accords ( every six months) • Talks to reestablish direct postal service between Cuba and the U.S. • More talks on aviation safety and security • Frequent “fact finding visits ” of members of the U.S. legislative branch

  12. Core of U.S. Policy remains • The most comprehensive set of U.S. sanction on any country. • Strict economic sanctions with extraterritorial implications ( fines to banks and travel companies) • Efforts to subvert the Cuban internal political order. ( Radio and TV Broadcasts and USAID “democracy promotion” programs) • Unilaterally keeping Cuba on the list countries that sponsor terrorism.

  13. Conditions for Change? • United Nations General Assembly rejects the U.S. embargo of Cuba ( 188-3) • European Union and Cuba have started a political dialogue to normalize relations • U.S. policy is isolated in the region of Latin America and the Caribbean

  14. Internal conditions for Change • Growing consensus in the U.S. Society in favor of modifying the policy ( Polls, Newspaper editorials, statements by political strategist and candidates for office ) • Changes in the Cuban American perceptions of Cuba and Americans perception of the Cuban right wing role. • Increased travel of U.S. and Cuban Americans ( 332 flights June-July 2013)

  15. Cuba Policy • Cuba is changing in search for its own indigenous, prosperous and sustainable socio economic system. • Cuba seeks collective security and is not a threat to the U.S. • Cuba is not Isolated in terms of trade and diplomacy. • Cuban Government has offered to start a dialogue with U.S. at any level, on any topic and any place and time.

  16. U.S. Policy • State policy not a government policy designed for regime change • Dominated by historical and geopolitical considerations • Lacks consistency and legitimacy • Counter productive from a liberal point of view

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