Saturday, October 10, 2015

United States Cuba Relations: Getting Beyond Tantalization

The definition of tantalize means to “arouse expectations that are repeatedly disappointed”.   The current state of U.S. Cuba relations at this moment can best be summed up that way, “tantalizing.”  It is a precarious situation for both nations as expectations need to be managed instead of aroused.  Right now the U.S. Cuba arousal is high.  Prepare for reality. Many Americans believe Cuba is wide open for business when still it is not.  The business bandwidth and deal flow for Americans are still too narrow.  Americans want to sell to Cuba.  Cuba wants Americans to invest in Cuba.  Therein lies the crux of the challenge.  On the American side, the Embargo still hobbles and blocks this proposition.  On the Cuban side, Cuban economic and investment policies still must be modernized to attract the kind of investment that will eventually come to Cuba and rebuild and restore it.   Selling and investing are functionally co-dependent economic fundamentals. Before we are going to be able to sell anything to Cuba, they have to be able to have the resources to buy the goods and services we want to sell them.  That is why until the obstacles are completely removed, the maximum potential of the relationship is only mesmerizing at the moment.  There are six obstacles remaining to fully normalized and trade relations:

1) The Cuban Trade Embargo

2) Radio TV Marti and Democracy Program Funding

3) Regime Change Foreign Policy

4) Resolution of Claims

5) Guantanamo Naval Base

6) U.S. Travel Restrictions

Beyond the immediate sectors of travel, food/agricultural, health and some telecommunications, the opportunities for business are still limited.   The private sector openings in Cuba are real but also very limited.  They are limited by the Obama Administration who has not expanded the opening even further while they still can.  They are also limited by Cuba’s response of trying to maintain a cautious methodical approach to the new relationship in the face of overwhelming enthusiasm by both the American and Cuban people. While President Obama’s initiatives and regulatory openings are significant, there are still neither substantial nor transcendent.   Transformation requires boldness and risk taking.  With the time remaining in the Obama Administration, there should be more proactive steps taken to expand the opening and facilitate the opening.  For example, while Cuba was removed from the Terror List, the regulatory impediments that make it possible for them to use U.S. Dollars in the international banking system remain in place.  This means the rationale for the infuriating 10 percent surcharge on U.S. dollar exchanges imposed in 2003 remain in place.  Who is paying that?  Americans and anyone who wants to give up the first ten cents of every U.S. dollar they have when it comes to spending in Cuba.  It is disingenuous that we have a real meaningful travel opening when we still put up an onerous cost that easily could be removed by our side.  We have also not divorced ourselves from the notion that we are going to somehow decide or how to conduct Cuba’s political future for the Cubans.  We are not.  That does not mean that Cuba will change.  It will.  On its own timetable however, not ours. That is the root of the distrust between our two countries and the guarantee for our ultimate disappointment.  The best we can accomplish is being a good neighbor and engage in a respectful debate and dialogue.

Similarly Cuba faces its own tantalization by America.  They want our goods, our services, and our people to visit and collaborate with them.  They need us if they are going to meet their economic growth targets.  However, Cuba faces its own existential challenges with 10 percent of its people and their descendants living 90 miles away from the island and another 10 percent living elsewhere abroad.  This alters the notion of Cuban identity.  How will they keep the values they cherish in the face of a reconciliation with their neighbor to the north?  How do they perfect their socialism with capitalism?  The Cuba before normalization will not be the same Cuba after normalization completes.   What is each side afraid of?  Those are the elephants in the room.

The road ahead for businessmen and corporations to do real business will require authentic relationship building with visits in both countries;  establishing  a  meaningful presence;  and negotiating deals that create mutually beneficial business transactions that focus on profit and social benefit.  If you want to do business in Cuba, you need to get in the business of getting rid of the travel restrictions and trade embargo.  That means lobbying at home.  With the plethora of consultants and lawyers with Havana dealing on their minds,  also remember something a Cuban official stated, “There are those who have come here after December 17, 2014 and those who have come here before. We know them.”  Create your Cuba business map and plan beyond tantalization to discover the real opportunities.
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Sunday, July 26, 2015

United States Cuba Relations: Restoration Day

So it began. On that historic day of July 20, 2015, the United States and Cuba formally restored diplomatic relations and reopened embassies.  It was an honor and privilege to be a witness and guest at that ceremony.  On a personal note, this was one more step in the fulfillment of a dream I had on my first trip to Havana in 1999.  With the United States and Cuba finally engaged in a diplomatic dialogue,  the many challenges and issues left from more than five decades will begin to be addressed in a mutually beneficial manner.  It’s time to end the embargo, travel restrictions, and engage Cuba fully and respectfully.

For those opposed to the normalization, this was a bitter pill for the anti-normalization hardliners to swallow.  However, there comes a moment when common sense and logical reasoning must prevail over delusion, intransigence, and hatred.  There also must come a point when those elected representatives must respect the will of the majority who want normal and full relations with Cuba.  The past five decades of our delusional policies with Cuba demonstrate that we cannot impose democracy, regime change, or anything constructive through a hostile and unilateral sanctions policy. 

While we will continue to have serious differences with Cuba, we have to ask ourselves if and how we really can improve human rights in Cuba or anywhere for that matter, especially through a sanctions regime?  It all sounds good to be for human rights though the truth is actually different.  How are we going to get Cuba to change when we cannot achieve for example;

1) Stop Saudi Arabia from prohibiting its women to drive cars or gruesome beheadings there;

2) Stop China from harvesting organs for transplantation from its own prison population;

3) Stop U.S. police brutality and violence upon people of color;

4) Stop the mass incarceration of our people making the U.S. the highest prison population nation in the world at an annual cost of more than 80 billion dollars for a for-profit prison industry!

By the way, we have normal travel and trade with the People's Republic of China and the Kingdom of Saudi Arabia, both one party authoritarian states.  We allow for-profit prison industries to exist and thrive in our country.  The State of Florida, where most of the anti-normalization representatives are from, is in the top ten list of states with the highest crime rate in the U.S.  Florida is also in the top ten of states with the highest prison population. 

America’s stand for democracy and human rights must not be by imposition but by our own example and congruency of action.  So that means we still have a lot of work to do at home before we instruct other countries on how to treat their people.   Influence could be actually more powerful and constructive if we try it.  Interference does not work and makes us hypocrites in the world community.

The U.S. Senate ended last week with the good sense to lift the travel, shipping, and agricultural trade bans on Cuba in the GOP majority Appropriations committee. No Cuban cigars yet though for those cheering this effort. Appropriation bills wind up going to a House Senate Conference Committee where the final compromise between what each house of Congress passed gets worked out.   Then the Conference Report has to be agreed upon by each house of Congress.   It is possible that the pro-Cuba travel and trade amendments survive the conference (then the ban really gets lifted) or the anti-normalization hardliners try to get that section pulled out.  Former Reps. Lincoln Diaz Balart and Tom DeLay did this when the first House passed Flake Amendment lifting the travel ban was pulled out from a House Senate Conference Report in 2003.  So stay tuned and informed.  Be vigilant.
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Tuesday, July 14, 2015

United States Cuba Relations: Normalization and the Guantanamo Imperative

With less than a week away from Restoration Day for the United States and Cuba on July 20th, the long journey of normalization begins in earnest.   Those in Congress who continue to block normalization efforts have relegated themselves to a triple S strategy; spoil, spite, and sabotage.  Not much else for one to do when they choose to be on the wrong side of history.  The United States and Cuba will restore, normalize, and finally reconcile their relations putting more than 50 years of animosity in the past and focusing on a future of mutual respect and cooperation, albeit in the midst of some serious differences that both sides will have.

Politically, Congress will continue to reflect the pro-embargo forces though its days are numbered as these interests do not represent either the majority of Americans or even Cuban Americans.  The challenge and goal of normalization forces must be to unite to speak with one voice and become a deciding factor in electoral politics.  As soon as one Member of Congress loses his or her seat in part to his or her intransigent position on maintaining our failed policies of embargo and restrictions, the pro-embargo firewall in Congress will finally collapse.

All Normalization Roads Will Lead to Guantanamo

The ongoing dialogue and negotiations will evolve to the next and higher levels.  How will Cuba satisfy the outstanding United States claims against it for expropriation?  How will the United States satisfy the outstanding Cuban claims against it?  Therein lies the Guantanamo imperative.  Anyone with a claim against the government of Cuba for expropriated property has a real problem ahead.  Cuba does not have the capital to satisfy those claims after a combination of more than 50 years of economic isolation and Cuban economics.   Similarly, if you have a claim against the government of Cuba what kind of bargaining power will you really have to get your claim settled when it’s a foreign government on the other side you are negotiating with as a private citizen or entity?  Enter Guantanamo.

The United States has operated the Guantanamo Naval Base since 1903 when it obtained the  $4,085.00 annual lease after we made Cuba “an offer they could not refuse” – which was give us the naval base or if you do not, we’ll invade the entire island.  That was essentially the choice.  As an island nation that struggled for its independence and total sovereignty under principles established by Jose Marti, it was indeed an offer they could not refuse accepting our hubris instead of accepting another military invasion.   Lets be honest about Guantanamo Naval Base.  Nowhere else in the world could we have gotten such a deal.  Who pays $4085.00 in annual rent for 45 square miles of land?  Are we paying fair market value for the land we rent from Cuba?  Did we ever?    When you consider what we do pay to maintain our military in foreign installations, currently exceeding 265 Billion dollars, you do have to wonder what is Guantanamo Naval Base really worth in terms of rent?  The answer is billions.  Similarly even if you believe for one second the treaty upon which it was written is legitimate and moral, then you have to ask what happens when you violate a term or condition of your lease?  Usually it means the lease is cancelled.  Our treaty with Cuba specifies that the land is to be used as a “coaling or naval” station.  What happened when we placed Enemy Combatants and made Guantanamo a prison holding terrorists during George W. Bush’s administration?  Did we violate the terms of our lease?  These are perplexing issues because we will have to eventually address this quagmire in the context of normalization.  This is a matter that even transcends the political differences between us and Cuba.  It is a matter of international law and diplomacy and what kind of relationship we are going to define in this hemisphere between the United States and our neighbors in the 21st century.  Are we going to be a fair negotiator, lead by example, or does the Monroe doctrine still extend over into the 21st century?  The world and especially our neighbors in Latin America are watching.

The solution?  Why not satisfy the claims of both the United States and Cuba through a Guantanamo based resolution?  This would look like the United States buying out and paying all the claims against Cuba for expropriated properties in exchange for Cuba dropping all of its claims against the United States for the Guantanamo leasehold and setting a date certain in the future, ie. 10 years for the formal return of the base back to the Government and people of Cuba at that time.   The value of those claims in the range of $6-8 billion, more than rectifies what we would have paid out to Cuba in fair market rent over five decades. When you consider the U.S. spends $265 billion plus for our military installations in foreign countries,  a one time 8 billion charge is a relatively nominal 3 percent.  The U.S. claims can be paid out from the U.S. Treasury or in the form of a Federal Income Tax credit which claimants could use to offset their annual tax bills.  Both nations could opt to impose a two cent fee on every U.S. Cuba related transaction to recover their costs over a one or two decade period.  Any remaining prisoners on Guantanamo can be relocated to a military installation much farther away from American soil.  President Obama would also get to keep a promise he made in his campaign, that he would close Guantanamo.  This is one way how he could achieve that as well as transform the U.S. Cuba and U.S. Latin America relationship in one broad swoop.
- Antonio C. Martinez II. - Editor

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