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THE US EMBARGO ON CUBA: THE OTHER SIDE OF THE COIN

By Ricardo E. Calvo MD PhD
Revista Guaracabuya
Colaboración:
Paul Echaniz
E.U.
La Nueva Cuba
Agosto 2, 2002

In the last few years there has been a persistent demand by US political and financial figures to lift the embargo of the US on Cuba.

They claim that the termination of such embargo is necessary for the American and Cuban people to interact and thus bring “democracy” to Cuba since American visitors and businessmen with dollars, with “democratic” ideas and notions of “liberty and enterprise” will become a formidable influence on the transformation of Cuba out of Marxism. They also claim that the end of economic sanctions will help American farmers to obtain access to the Cuban markets and sell their products to new customers.

1.7 million visitors from all over the world (including around 200,000 americans) went to Cuba in 2001 bringing with them $ 2.2 billion dollars. It is logical to wonder how a population of tourists in a ratio 8:1 with respect to the Americans and spending almost 10% of the GDP of Cuba was not able to make inroads into “democracy”. What special characteristics whether worldly or divine will posses the new American visitors who supposedly will convert the rigid communist system still under the original Marxist leadership after 43years?

How will the Cuban government pay for the traded goods? What will the Cubans offer the U.S. merchants in exchange for their articles? What could represent to the U.S. markets the initiation of trade with Cuba?

In 1993 the dollar was legalized in Cuba and its influx has produced a two tier society in the Island: those with dollars who can acquire goods in the official and only authorized State shops and those without them who are condemned to obtain products through the official rationing books. The real consequence: “economic apartheid”.

There is absolutely no private property in Cuba and the distribution of future U.S. products will be directed exclusively by the Party. There is no law of supply and demand in Cuba and the trade of U.S. goods will have no relation to the needs of its citizens but rather follows the dictates of the ruling class. Under communism there are no independent labor unions and Cubans workers in foreign joint adventures are contracted by the State which pays them in devalued Pesos corresponding to only a small fraction of the “original dollar salary”.

Today the sugar cane industry is in shambles with a dismal production 50% of the pre revolutionary epoch and there are strong rumors the government is planning to dismantle 40% of the existing sugar mills. The production of nickel is in the hands of the Canadians and its price is quite low, the production of copper has been closed for a while and the unpaid principal external debt with several countries and the Paris Club is believed to exceed $39 billions dollars and climbing. (553).

The Cuban government had its credit frozen by Spain, France, Italy and Japan for now due to lack of payments to their banks and the shipping of oil from Venezuela has been suspended since April as a consequence of outstanding receipts for $127.7 million. These shipments represent 33% of Cuba’s daily energy requirements and consequently the Marxist government is utilizing its cash reserves to buy oil from international traders on the spot market at a much higher price.

If the Cuban government is pressed to pay cash for merchandise from the U.S. agricultural markets it will buy only food products if given the “necessary financial means” by the U.S. as expressed by Cuban officials to (D-Cal) Representative Farr during his recent visit to Havana (2/02 AP). This can be easily interpreted to result in further agricultural subsides paid by the American taxpayer.

The official annualized income per capita in Cuba is barely $1500 (less than every Western Hemisphere nation except Haiti). If the embargo were lifted the U.S. could only export around $1 billion in foodstuff to the Island representing barely 1 to 2% of the U.S. overall food exports (IBD 5/22/02).

There is no need of American business or tourists to bring “notions of liberty” – ask the Cubans about their reasons to escape from the Island on dangerous flimsy rafts: to gain freedom. There is no need of U.S. citizens appearing in Cuba carrying “notions of enterprises” – ask the Cubans who trade goods illegally daily in the “black market” to ensure their subsistence.

Why is it that the advocates to terminate the embargo expend more efforts denouncing it than calling for the end of the existing totalitarian regime in Havana? Liberalizing trade with Cuba will produce a windfall for the Communist Party to support repressive forces at home and international guerrilla activities overseas.

What really motivates the anti embargo lobby? Liberty or the perpetuation of socialism while obtaining profits?

The existence of the Soviet block in Europe benefited greatly from the material support it received from the West mainly from the US until an american President decided to strangle it economically and then the “evil empire” came to a quick and decisive end. Let us replicate the successful experiment.

If the embargo is lifted we all shall be responsible for the continuation of communism in the Caribbean Island: some for hailing it and others for remaining silent.

I find it outrageous that many of those leaders who are asking for reparations for the descendants of black slavery are fervently supporting the greatest slave owner in history, Fidel Castro, who keeps 11 million people, black, whites, and every other race and religious creed, under bondage in Cuba.

"On Trade, Cuba is Not China"

Senator Jesse Helms
The New York Times
June 24, 2000

Some lawmakers, including a number of Republicans, have argued in recent weeks that if Congress believes trade will promote democratic change in China, then why not adopt the same policy for Cuba? Here is why: Cuba is not China.

The argument that American investment will democratize China has itself been wildly oversold. Beijing is doing everything in its power to dampen the impact of private investment: placing stringent control on the Internet (all users must register with the Public Security Bureau), and most recently declaring that it will insert "party cells" into every private business that operates in China.

But regardless of how one feels about permanent normalized trade with China, there is simply no case to be made that investment would democratize Cuba.

Cuba has undertaken none of the market reforms that China has in recent years; there is no private property, and there are no entrepreneurs with whom to do business. The Fidel Castro regime maintains power by controlling every single aspect of Cuban life: access to food, access to education, access to health care, access to work.

This permits Castro to stifle any and all dissent. Any Cuban daring to say the wrong thing, by Castro's standards, loses his or her job. Anyone refusing to spy on a neighbor is denied a university education. Anyone daring to organize an opposition group goes to jail.

American investment cannot and will not change any of this. It cannot empower individual Cubans, or give them independence from the regime, because foreign investors in Cuba cannot do business with private citizens. They can do business only with Fidel Castro.

It is illegal in Cuba for anyone except the regime to employ workers. That means that foreign investors cannot hire or pay workers directly. They must go to the Cuban government employment agency, which picks the workers. The investors then pay Castro in hard currency for the workers, and Castro pays the workers in worthless pesos.

Here is a real-life example: Sherritt International of Canada, the largest foreign investor in Cuba, operates a nickel mine in Moa Bay (a mine, incidentally, which Cuba stole from an American company). Roughly 1,500 Cubans work there as virtual slave laborers. Sherritt pays Castro approximately $10,000 a year for each of these Cuban workers. Castro gives the workers about $18 a month in pesos, then pockets the difference.

The net result is a subsidy of nearly $15 million in hard currency each year that Castro then uses to pay for the security apparatus that keeps the Cubans enslaved.

Those who advocate lifting the embargo speak in broad terms about using investment to promote democracy in Cuba. But I challenge them to explain exactly how, under this system, investment can do anything to help the Cuban people.

The anti-embargo crowd should drop its rhetoric about promoting democracy and be honest: the one reason for their push to lift sanctions on Cuba is to pander to well-intentioned American farmers, who have been misled by the agribusiness giants into believing that going into business with a bankrupt Communist island is a solution to the farm crisis in America.

Whoever has convinced farmers that their salvation lies in trade with Cuba has sold them a bill of goods. Cuba is desperately poor, barely able to feed its own people, much less save the American farmer.

Castro wants the American embargo lifted because he is desperate for hard currency. After the Soviet Union collapsed and Moscow's subsidies ended, Castro turned to European and Canadian investors to keep his Communist system afloat. Now he wants American investors to do the same. We must not allow that to happen.

Unfortunately, some in Washington are all too willing to give Castro what he wants. At the least they should stop pretending that they are doing this to promote Cuban democracy and American