Free Republic
Browse · Search
Topics · Post Article

Skip to comments.

Outide View: Castro on the Skids
United Press International ^ | 9-28-02 | Frank Calzon

Posted on 09/28/2002 5:10:37 AM PDT by Oldeconomybuyer

WASHINGTON, Sept. 28 (UPI) -- A longtime thorn in America's side is wilting, and fast. Fidel Castro's government is broke. Foreign investment in Cuba is down an almost unbelievable 92 percent over the last year. Castro can't pay his bills, and several of his most important trading partners have suspended credits and export insurance to his government.

Yet, like the second-to-last scene of a banal Hollywood western, some are out trying to muster a cavalry to save his desperate regime. This time, the cavalry is American tourist and special farming interests who seek U.S. taxpayers as infantry, but their objectives will only strengthen the Western Hemisphere's most enduring dictatorship.

At the end of July, the House of Representatives voted on two amendments, each approved by 95 vote margins, to end restrictions on travel and lift restrictions on financing exports to Cuba. The Senate will consider the legislation soon.

President George W. Bush has threatened to veto any legislation that would "bolster the Cuban dictatorship," but the anti-embargo lobby has argued successfully that trade with Havana means American profits and Cuban prosperity.

Since last year, U.S. companies have been allowed to trade with Castro's government on a cash-and-carry basis; that is, Cuba must pay for American products, generally agricultural items, with cash only, but not with credit. But the new legislation will extend American export credit and export insurance to Castro's government --- both of which are funded by American taxpayers. Under the proposed policy, when Castro defaults on his purchases American taxpayers will have the burden of picking up his tab. And like the wretched farm bill that passed last spring, this legislation is good for the green triangle, but a raw deal for American taxpayers.

In a July 11 letter to the House Appropriations Committee, Secretary of State Colin Powell and Treasury Secretary Paul O'Neill wrote: "Trade by other nations with Cuba has brought no change to Cuba's despotic practices, and it has frequently proved to be an unprofitable enterprise."

Unprofitable, indeed. France, Spain, Italy and Venezuela have suspended official credits to Cuba because Castro has failed to make payments on its debt, including debt incurred on agricultural purchases. In fact, according to Powell and O'Neill's letter, two foreign governments have approached the United States to complain that Cuba's payments of cash for U.S. agricultural products have meant that they are not getting paid at all.

In international capital markets, reputation is everything. So it was little surprise when Reuters reported on July 8 that, "Direct foreign investment in Cuba plummeted to $38.9 million in 2001 from $488 million the year before." And earlier in the year, despite Castro's tantrum, Russia closed its spy facility near Havana, which will cost the Cuban government $200 million per year in foregone rent payments.

Castro's current creditors are far from happy with these circumstances, as many have not received payment on interest of principal credit since 1986. Without even counting Castro's debt to Russia, which he will not pay because he declares his debt is to a country that "no longer exists," Havana owes billions of dollars to western banks and former socialist countries.

If this is not enough evidence, the cavalry lobbying for American credits and imminent subsidies should ask the Canadians for their advice. On Aug. 7, 2002, the Montreal Gazette reported that a 15,000 ton Cuban-owned ship has been held in the port of Conakry, the Guinean capital, for the past month "while an Ontario company, armed with legal judgments, pursues Cuba for more than $3 million U.S." Guinea's Court of Appeals upheld the ship's detention, pending the payment of more than $275,000 in debt to the Ontario company.

Imagine U.S. companies chasing down Cuban cargo ships in international waters to collect payment, while American taxpayers sit on the sidelines knowing that they will pick up the bill when the debtor doesn't pay. Castro pricks America's side again.

Critics of current policy claim that Cuba is purely a matter of Florida's electoral politics, but the facts show otherwise. While announcing his "U.S. Initiative for a New Free Cuba" in May, President Bush declared that, "Cuban purchases of U.S. agricultural goods ... would be a foreign aid program in disguise." Current policy toward Cuba has saved taxpayers millions in export insurance, subsidies, and de facto foreign aid.

All, because trade with Cuba does not represent trade with Cuban business owners, entrepreneurs or consumers; Trade with Cuba is trade with the Castro government itself, which monopolizes virtually all enterprises and exploits Cuban workers as their sole employer. National Security Advisor Condoleezza Rice, recently wrote that, "In Cuba, Fidel Castro is still the one man through whom everything has to go. Any trade that goes through Cuba is going to strengthen Cuba's regime."

Capital markets lie only when con artists run the show. And forcing taxpayers to subsidize Cuba, which has seen a 92 percent decrease in foreign investment over the last year is a leap from a precipice trumping Enron and WorldCom combined.

But American taxpayers did not have to bail out those companies. Why should we be forced to bail out the head of an openly hostile government -- one of seven nations listed by the State Department as state supporters of international terrorism?

A Castro bailout under the proposed policy is more a question of "when" than "if." And policymakers should seek to protect the interest of taxpayers before propping up a regime that is openly hostile to the United States.

(Frank Calzon is executive director of the Center for a Free Cuba. "Outside View" commentaries are written for UPI by outside writers who specialize in a variety of important global issues.)

TOPICS: Editorial; Foreign Affairs; News/Current Events; Politics/Elections; US: Florida; US: New York
KEYWORDS: castro; cuba

1 posted on 09/28/2002 5:10:38 AM PDT by Oldeconomybuyer
[ Post Reply | Private Reply | View Replies]

To: Oldeconomybuyer
Yes... the recent "trade" show in Havana was more propaganda than fact. There is no market for American companies to sell to in a Cuba in which the state owns the economy and as for tourism there's little precious to see there that can be gotten in other Carribean countries. Bottom line: Cuba's an Enron-style investment for American business; the returns look great on paper but will be unrealized in practice. Just ask Cuba's other trading partners how they've been left holding the bag.
2 posted on 09/28/2002 5:17:21 AM PDT by goldstategop
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer
"..A longtime thorn in America's side is wilting, and fast...."

What's he, 90 or something? Just wait a few weeks....


3 posted on 09/28/2002 5:19:26 AM PDT by Deep_6
[ Post Reply | Private Reply | To 1 | View Replies]

To: Deep_6
Actually he's 76. We may wait a long time for Fidel to go. He's outlasted nine American Presidents so far...
4 posted on 09/28/2002 5:21:07 AM PDT by goldstategop
[ Post Reply | Private Reply | To 3 | View Replies]

To: Oldeconomybuyer
This boggles the mind. What in the hell is wrong with the Republicans in Congress? Why would they want to save Castro's government?

I know, let's turn it into another demanding, ungrateful, corrupt, welfare regime like Puerto Rico.
5 posted on 09/28/2002 5:22:08 AM PDT by 4Freedom
[ Post Reply | Private Reply | To 1 | View Replies]

To: 4Freedom
Let's just annex Cuba and grant them American citizenship. Fidel's Communist Party can apply to be annexed by the Democrats and every one will live happily ever after.
6 posted on 09/28/2002 5:23:50 AM PDT by goldstategop
[ Post Reply | Private Reply | To 5 | View Replies]

To: 4Freedom
As soon as relations between Cuba and the US are normalized, about 20 Cubans in Miami will return to Cuba — and countless thousands of Cubans will "immigrate" to the US.
7 posted on 09/28/2002 5:27:27 AM PDT by Consort
[ Post Reply | Private Reply | To 5 | View Replies]

To: Jimer
The sad legacy of Cuba is that it could have been one of the great economic superpowers in all of Latin America had it been a representative republic.

They have several things that everyone else in the Caribbean lack, namely lots of arable land for tropical plant agriculture, mineral resources, and miles and miles of beaches for vacation resorts. A representative republic taking advantage of all that natural resource could have made a major financial killing just from the long list of tropical fruits that could have been grown in Cuba alone. As such, Cuba is one of the poorest countries per capita in all of Latin America, hamstrung by its Communist government.
8 posted on 09/28/2002 6:27:52 AM PDT by RayChuang88
[ Post Reply | Private Reply | To 7 | View Replies]

To: Oldeconomybuyer
I can't believe our government would be stupid enough to loan Castro money. Even I know better than that.

I have a gringo friend who's just dying to go to Cuba to try and make his fortune when the economy opens up. His reason: Cuban women, who are apparently legendary. Oh, and the economic opportunities, of course.

He doesn't fool me.

It's the women.

9 posted on 09/28/2002 6:57:07 AM PDT by daviddennis
[ Post Reply | Private Reply | To 1 | View Replies]

To: daviddennis

10 posted on 09/28/2002 7:02:00 AM PDT by Oldeconomybuyer
[ Post Reply | Private Reply | To 9 | View Replies]

To: Oldeconomybuyer
11 posted on 09/28/2002 7:20:56 AM PDT by RippleFire
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer
I posted this May 26th on a similar thread:

What am I missing here?

The entire rest of the world trades with Cuba. The US alone, does not trade with Cuba. Yet, the media hype tells us that by not trading with Cuba, we (the US) are somehow complicit in the level of poverty that exists in that country and that by trading with them, we will somehow bring about social change.

England, Canada, France, Germany, Mexico, Venezuela, Japan, China, etc, etc all trade with Cuba and their trade has had no effect on Cuban society. To say that only US trade could affect Cuban social change is ludicrous.

The fact is, communist dictator Fidel Castro's Cuba has nothing to trade... His dictatorship has completely destroyed the producing capacity of Cuba.

What the leftist in the US are really looking for is aid. That's right! They want US taxpayers to prop up one of the last murdering dictators in the world. I suppose with enough US taxpayer aid, they would then rewrite the history books and say that Cuba was one of the success stories for socialism.

Now might be a good time to find a copy of the book "A Thorn In The Side." It was written by a man who lived through Castro's takeover and eventurally escaped to the US. Excellent read. Out of print for a long time.

12 posted on 09/28/2002 7:57:30 AM PDT by Texas Jack
[ Post Reply | Private Reply | To 1 | View Replies]

To: Oldeconomybuyer
If anybody (especially countrys) with investments in Cuba is defalted upon....
Excellent, course the IMF(leading ones) don't care it's not their money anyway, its OURS.
13 posted on 09/28/2002 7:57:40 AM PDT by hosepipe
[ Post Reply | Private Reply | To 1 | View Replies]

To: Thud
14 posted on 09/28/2002 8:39:31 AM PDT by Dark Wing
[ Post Reply | Private Reply | To 2 | View Replies]

To: Oldeconomybuyer
15 posted on 09/29/2002 2:47:02 AM PDT by Cincinatus' Wife
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794 is powered by software copyright 2000-2008 John Robinson