7 surprises from a visit to CubaJanuary 23, 2023
Rick Newman, Senior Columnist for Yahoo! Finance, joined GIC’s Delegation to Cuba from January 8 – January 12, 2023 and published a recap of the Delegation on Yahoo! Finance. Read an excerpt below and click here to read his writings in full.
HAVANA—We huffed up several flights of stairs at the Lizt Alfonso Dance Company studio wondering if it was worth breaking a sweat. Turns out, it was. A group of captivating dancers wowed us with several flamenco routines and sat on the floor afterward as we asked them questions. On the way back down, a few of us stopped to look out a barred, open-air window onto the rooftops below, or what would be rooftops if the roofs hadn’t collapsed. Gangly weeds sprouted inside the shells of neighboring buildings, which looked like bombed-out remnants of Russian attacks in Ukraine. Except it’s neglect and deprivation, not bombs, that have etched deep scars across Havana’s cityscape.
This type of contrast is everywhere in Havana: Beauty amid blight, grit competing with futility, ambition battling obstruction. I went to Cuba in early January with a group of 20 curious Americans on a trip sponsored by the Global Interdependence Center, a Philadelphia nonprofit focused on economic cooperation among nations. Most of us had never been to Cuba. We wanted to learn what America’s communist neighbor is really like and better understand why the United States has shackled the nation with ruinous sanctions for 60 years. The itinerary included several meetings with senior government officials, briefings by civic experts, and introductions to local businesspeople.
It was a timely trip. Cuba is in the news again as thousands flee for the United States, either through Latin America toward the southwest border with Mexico or on rickety boats across the Caribbean toward Florida. It’s the largest exodus from Cuba since Fidel Castro seized power in the 1959 revolution. The COVID pandemic crushed the island’s tourism business, which has barely returned. New sanctions imposed during the final days of the Trump administration sucked more oxygen out of the reeling Cuban economy. Many of those fleeing now are young, educated Cubans who see no opportunity in their home country.
President Biden said he would reverse Trump’s Cuba policies, but little has changed during his first two years in office. Pressure to address the migrant surge at the southwest border could be one catalyst for change. Cubans are now the second-largest group of migrants to the United States by nationality, after Mexicans. In January, the Biden administration began issuing visas at the U.S. embassy in Havana for the first time in four years, a possible sign of thawing relations between the two countries.
Passions run deep on the question of whether the United States should normalize relations with Cuba. Many Cuban Americans lost family property, or worse, when Castro took power, and strongly oppose any opening to Cuba as long as Castro’s Cuban Communist Party remains in power. Younger generations tend to favor normalization, but they lack the political clout of their elders. I went to Cuba feeling ambivalent and returned feeling more enlightened about possible ways forward. Here are some of the things I learned:
- Russia’s influence is fading. The Soviet Union backed Cuba from the 1960s until the USSR fell apart in 1991. That began a long period of economic isolation for Cuba, manifest now in thousands of Havana buildings that are falling down simply because nobody has the money or ownership interest to repair and maintain them. Nor has China recruited Cuba as an ally, as it has other nations in Africa and Latin America.
- Cuba sure doesn’t feel like a terrorist state. The United States designated Cuba a state sponsor of terrorism in 1982, when it was a close ally of America’s archrival, the Soviet Union. In 2015, President Obama removed that designation as part of a broad rapprochement with Cuba. Trump undid the Obama reopening and put Cuba back on the terrorism list nine days before leaving office in 2021, claiming Cuba harbors fugitives hostile to US interests. The designation automatically triggers sanctions meant to sever the target nation from the global financial system and strangle its economy.
- There’s a burgeoning private sector. Cubans are allowed to start businesses, earn a profit and accumulate wealth, within limits. “It used to be that talking about the private sector was like talking about the devil, capitalism,” consultant Oniel Díaz Castellanos of the firm Auge Havana told us. “Now, there are more private companies than state-owned. It’s a huge change for a country like Cuba.”
- U.S. sanctions are a huge barrier for private-sector businesses. Cuba may have the world’s heartiest entrepreneurs, because they overcome hurdles many American business owners would find ruinous. There’s a severe shortage of raw materials needed to make stuff inside Cuba, because U.S. sanctions block many imports. A clothing entrepreneur told us the best way to get plain T-shirts for local artists to design is to buy them in bulk out of the country and pack them in luggage on the return flight. An art gallery curator said photographic equipment is so scarce that some shooters leave the country to print their photos. Sometimes there’s no paper to make shopping bags for visitors who patronize gift shops.
- Cubans really want to buy American stuff. Virtually everybody told us this, from the private sector, the government, and big state-owned companies. One government official griped about a fivefold increase in the cost of rice shipped from Asia since 2019, and said, “The normal thing would be for us to buy rice from the U.S., because it’s 90 miles away. But we can’t because of the blockade.” If trade opened up, Cubans would undoubtedly clamor for U.S. food, fuel, medical supplies, industrial equipment, and all kinds of other things.
- You can criticize the government. Many Cubans we met openly criticized the communist government for a variety of things: ubiquitous lines for food and gasoline, routine power outages, the dial-up quality of Internet service, clumsy policies that fail over and over to raise already low living standards. I asked one business owner what’s allowed, exactly. Apparently it’s okay to bash policies but riskier to criticize government individuals by name, which can garner a jail sentence. Still, to be safe, you’ll notice that I’m quoting many people anonymously, so I’m not the one who tests their freedom of speech.
- There’s a model for what Cuba might become. It’s Vietnam. The United States suffered nearly 60,000 fatalities during the brutal war in Vietnam in the 1960s and ’70s. Yet it restored trade relations with Vietnam in 1994, when it was still led by the communist government that effectively drove U.S. forces out. U.S. trade with Vietnam now includes $10 billion of exports per year and $80 billion of imports. If the United States can do business with a former military foe on the other side of the world, it can certainly improve ties with a recovering Soviet sidekick just 90 nautical miles away.