Cuba's Transitional Economic Policy

Cuba: it’s the mystical island where Hemingway developed his passion for mojitos, classic Chevrolets roll along the palm tree lined streets, and old men sporting thick mustaches and leathery tans sit on bar stools smoking finely crafted cigars. It’s no wonder that this time capsule, for so long insulated from the modernizing Western world, has become an especially hot topic as our nation and theirs begin to discuss lifting economic and political sanctions.

It was in 1959, amidst the cold war, that Fidel Castro and a group of revolutionaries seized power in Havana and imposed a communist regime. The United States at first recognized this government despite their rejection of communism as a valid political or economic theory. However, as Castro began to trade more with the Soviet Union and also increase taxes on American imports, the US instituted a ban on nearly all exports to Cuba that eventually led to JFK’s economic embargo and strict travel restrictions. As covert operations geared towards overthrowing the Castro regime like the 1961 Bay of Pigs invasion engendered Cuban mistrust and Soviet collaboration, the America’s embargo policy and political isolation was only strengthened.

But on December 17, 2014, Barack Obama and Raúl Castro agreed to restore full diplomatic ties for the first time in more than fifty years. The two nations reopened their embassies in each other’s capitals, paving the road for the restoration of lenient remittance, travel, and banking policies. So why, after 50 years of political estrangement, did Obama decide it was time for the US and Cuba to kiss and make up? Perhaps because decades of isolationism had failed both economically and politically.

Since Fidel’s brother Raúl Castro took the throne in 2008, he has brought forth significant domestic reform, relaxing restrictions on small businesses and expanding access to consumer goods. While Raúl embraces communism as a feature of Cuba’s national identity and does not endorse democracy or a free-market, his policy changes have in fact enabled the private sector to grow. Lifting the U.S. embargo would stimulate economic developments and perhaps the island’s shift towards a free market. Regardless of the economic policy in place, alleviating travel restrictions would certainly benefit the tourism industry: almost twice as many Americans travelled to Cuba in 2015 than in 2013 and those numbers would only increase with a more relaxed policy.

Lifting the embargo could also benefit the United States’ economy. Agricultural producers, for instance, would no longer face burdensome restrictions on exports and Cuba is in fact the biggest importer of wheat. This grain market is projected at a $150 million net worth and would also boost Cuban food security.

However, the steps that the United States has taken towards restoring trade and alleviating travel restrictions with Cuba are primarily based upon Obama’s executive orders that could be repealed by our new president. During the presidential race, Trump’s approach to Cuban politics wavered. He at first claimed to support government efforts to restore relationships with the island but at a Miami rally two weeks preceding the election spoke against Obama’s lenient negotiations with the Castro Regime and suggested backtracking. Whether these claims reflected Trump’s actual intentions or were rather an attempt to appease the population of Cubans who had escaped the brutal Castro regime and were in favor of the embargo is unclear. And if he approaches the issue as a hotel businessman, more lenient economic and trade policies between the two nations would actually be in his favor.

Regardless, that Cuba and the U.S. have begun so seriously discuss radically changing the political and economic policies that govern the two nation’s relationship has greater cultural implications. Cuba is agreeing to expose its communist policy rooted in nationalist tradition to the free market forces that have in many ways shaped the rest of the world over the course of the past half century. Are we digging up a time capsule and exposing it to the elements of modernization? Or would Cuba maintain its unique identity and simultaneous reap the benefits of exposure to a more democratic economic platform?