There was a real aha moment for our group of agricultural journalists last week as we checked in to the Hotel National de Cuba in Havana, Cuba. “That’s the president of Iran,” someone said. Sure enough, President Hassan Rouhani was there to meet with Cuban counterparts and 'reaffirm friendships,' as the Reuters story put it. We later learned that the Cubans threw quite a party for visiting Chinese Prime Minister Li Keqiang the day after we left to return to the United States.
In a week full of surprise and revelations, this may be the most profound. As we learned the hard way in the Middle East these past eight years, when you snub an important corner of the world, expect rivals and enemies to fill the void. Cuba, a nation the size of Virginia with 11 million residents, is just 90 miles from Key West. The lack of ties to this nation has cost us – not just in lost trade but in valuable geostrategic alliances. The U.S. embargo has created a friendly environment for unsavory characters to influence this communist nation.
I was fortunate enough to spend the week in Cuba in a trade mission of agricultural journalists, sponsored in part by the American Agricultural Editors' Association Professional Improvement Foundation. Our mission came just as the doors between our nations seem to be creeping open ever slightly. It also came at a desperate time for Cuba, as its main source of oil, Venezuela, has cut back supplies amidst its own economic meltdown. The power went off during our meetings, a sign that the country may be putting in austerity measures to weather the storm.
Of course, in a country where free speech is forbidden, we’ll never know if those were simple power grid issues or a directive from the central government.
Nation of contrasts
To no one’s surprise, Cuba’s centrally planned economy is stuck in the ‘50s. Officially, average income is $30 a month, so Cubans find other ways to make ends meet; a trucker siphons off a portion of fuel from the company truck, or a bartender skims some pesos by substituting his own whiskey. They find ways to make ends meet. Think China, before China discovered and developed its own version of capitalism.
Yet, there are advantages. The socialist regime focuses on free education and, perhaps surprisingly, has developed a world class health care system. Even so, being healthy and well-educated doesn’t translate into a high standard of living. Think, first-world population in a third world economy. Taxi drivers make more income than doctors. The old cars on Havana’s dusty streets seem quaint, but they are there out of necessity thanks to a ban on foreign car imports and parts. Many buildings are in disrepair, and billboard advertising is not allowed. You won’t see any McDonald’s or other franchises. Havana’s moldering mansions, relics of the sugar industry’s long-gone glory days, sit in silence along the Caribbean coastline, despite their million-dollar views.
Yet, we saw signs of encouragement. Tourism is a growing business and more Americans show up every day. France has agreed to renovate Havana’s outmoded international airport. Recent economic reforms now allow Cubans to start and run their own businesses. People can buy and sell homes. Several in-home restaurants now offer tantalizing dishes for tourists and locals alike.
“Everything will be changing for the better now,” says Alejandro Robaina, who uses his grandmother’s recipes and has hosted the likes of Jimmy Page, Jude Law, Matt Dillon and Madonna, all memories captured in autographed photos adorning his hallway.
“There’s lots of competition now in the restaurant business,” he says. “When Obama came, everything changed, but it’s not enough. Maybe Hillary can do it.”
Robaina pays the government about 40% each year in taxes – a strange concept for most Cubans who have grown up expecting the government to run their lives.
“The problem they face is moving all these people off the government dole and turning them into tax payers,” says Paul Johnson, president of Chicago Foods International and co-chair of the United States coalition for Cuba. Johnson has made 50 trips to Cuba, mostly bringing U.S. businessmen to see Cuban opportunities for themselves. “They want to create prosperity but also keep socialist programs like free health care and education. That’s going to be very difficult, but not impossible.”
What’s the holdup?
While the Obama administration relaxed Cuba embargo restrictions in March this year, allowing easier travel to Cuba and more commerce between the countries, most other embargo restrictions remain in effect. Why? The American people see Cuba in a positive light. According to Gallup, just 21% viewed Cuba as ‘favorable’ 10 years ago; today that figure is up to 54%. A 2016 survey by Florida International University reveals that 63% of Cuban-American residents of Miami-Dade County oppose continuing the embargo. American companies are itching to invest here. Every farm group that comes back from Havana is convinced we need to drop the embargo.
So, who does want the embargo? A very vocal group of seven Cuban American congressmen (including U.S. Senators Marco Rubio and Ted Cruz) have led a steadfast fight against opening U.S. doors to Cuba. Of these, only one has actually been to Cuba, says Johnson. There are plenty of anti-Castro political leaders, both Democrat and Republican.
"Relations with the Castro regime should not be revisited, let alone normalized, until Cubans enjoy freedom," said former House speaker John Boehner last year.
“It’s a potent lobby group,” says Johnson. “One freshman Congressman was pulled aside and told, ‘If you don’t support the embargo, you’re un-American.’ They grew up hearing stories of their property being nationalized and families persecuted.”
After seeing Cuba firsthand and talking to Cubans, this position is nonsense. The embargo is a cold war relic. If it was intended to punish the Castro regime, it’s not working. It only punishes the Cuban people.
Further, it has gotten us nowhere while other countries establish ties there.
Stamping our feet and insisting our neighbor changes its form of government hasn’t worked yet, and it’s been, what, 55 years? Is being stubborn really the mark of a world leader?
The way to begin meaningful change is to work with the Cubans so they can see firsthand the advantages of capitalism – and let them create their own version of democracy, in their own time.
There are deeper issues that must be resolved and frankly, it will take a long time to resolve them. For starters, if Cuba chooses to transition to a free market economy – and that’s a big if - it will need to reconcile issues over land seizures it made against its people in the early years of the revolution. Other political and legal issues will need to be addressed.
Technically, we are still enemies.
“This is a different socio-economic environment,” says Jorge Mario Sanchez Egozcue, a University of Havana professor who has lectured often in Cuba and the United States. “For the two countries, for different reasons, it’s very important to have a proper, trustable environment to find a stable solution. It’s building a trusting environment for business that goes beyond any administration in the long term perspective. It’s about national interests.”
What Cuba wants is to be treated like any other trading partner – specifically to be able to do business on credit, with U.S. currency. Right now our laws only allow sales marked cash upfront or finance transactions through third party banking institutions, and Cuba is a country with a major cash flow problem. Congress is discussing ways to allow ag trade with Cuba on credit. Every government official we met with recognizes the timing advantages of getting fertilizer or other ag supplies from ships loaded out from New Orleans and not current trading partners in China. This is a $1.1 billion market for U.S. ag goods, according to USDA.
Yet, if we think we will have success with Cuba simply by telling them to do things our way, or expect them to feel lucky just to trade with us, forget it. This is a proud nation. Their goal is to boost their own food security. Their agriculture system is extremely inefficient. Right now they must purchase over 70% of their food from other nations, and they want to cut that number by half.
So yes, let’s sell to Cuba, but let’s also help them grow their own agriculture and economy.
If we don’t have the Cubans’ best interests at heart, we will not play in this market. But someone else will.