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Economics

PODCAST: C U B A

Bellarmine on Business Podcast

Episode 11:  Host Jim Ray interviews Dr. Frank Raymond Professor of Economics and Chris Cloonan who is Cuba Policy Fellow for Just Foreign Policy, an NGO actively working with members of the US Congress on Cuba policy.  The protests in Cuba are receiving a lot of media coverage, so we thought it would be interesting to share some perspectives on root causes and possible objectives. 

 Please note, this topic can be both politically and emotionally charged.  It’s our goal to provide perspectives on this multi-faceted issue. 

 Dr. Raymond has a background in international economic development.  The Rubel School of Business has an international experience requirement, as part of the MBA program.  Several years ago, an excursion to Havana and some surrounding areas was developed as an option for this international experience.

 

 

Chris Cloonan completed part of his Master’s program at the University of Havana.  His Master’s thesis focused on a proposed normalization between the US and Cuba. Chris spent 2013 and 2014 in Cuba.  Later in 2014, President Obama began taking steps toward that normalization.  Chris published a normalization proposal with the help of Just Foreign Policy.  They published his proposal and hired him to assist with legislative efforts.

 From a purely economic perspective, the US has had a long-term economic embargo on Cuba.  There have been some brief thaws, leading to a somewhat inconsistent posture.  Dr. Raymond explains that over the centuries, long-term embargoes never work.  Locals end up digging in their heels and the country responsible for the embargo ends up being viewed as the bad guy.

 Obviously, short-term embargoes (e.g. during a state of war) can work to some effect.  The issue is the failure of long-term embargoes used to nation-build.

 

 Foreign Policy Influence by Domestic Policy

Chris’ perspective is that the US foreign policy toward Cuba is actually a reflection of US domestic policy.  He goes on to explain that Florida’s swing state status strongly influences the stance of our foreign policy, by way of the Cuban-American voters.  This has left us fairly isolated on this topic, internationally.

 Dr. Raymond explains the wide-reaching impact of the US embargo.  It prohibits countries which decide to trade with Cuba from doing business with the United States. The attractiveness of the US domestic market provides leverage against engaging with Cuba.  There are some countries not currently doing business in the US and thus engaging in the Cuban economy.  Then there’s China. 

Economically, we still engage with China on an economic level.  While China does conduct business with Cuba, we tend to look the other way, based on our own interests.  The risk is having China heavily investing in a country with such a close proximity.

Chris goes on to explain how the goals of the Cuban-American voters, and those of the former Trump administration policies, actually bring about the exact opposite results.  He states the sanctions, continued with little change under the Biden administration, have invited Chinese and Russian investment into Cuba.

During the period of opening under former President Obama, there was an easing of internet restrictions, cell phone ownership grew (including phones with internet capabilities), access to tourism facilities increased and licenses to open small businesses exploded.  The Cuban government showed a greater tolerance for independent media and freedom of the press. 

Once the Cuban population began protesting for food, medicine and better economic conditions, the Cuban government shut down the internet access.  Chris states the impact is counter-intuitive, but the Cuban people fair better when sanctions are eased.

Interestingly, direct change to a democratic republic, might actually be dangerous.  This would be a significant shock to the Cuban economy and infrastructure, which could derail its success.  Cubans have experienced 400 years of Spanish colonial rule.  The US later supported the Batista regime, which Castro overthrew.  While the US helped to build much of the existing infrastructure in Cuba, it’s aged.  The Cuban people are wary of perceived colonial powers seeking influence in Cuba.

 

What Sparked the Cuban Protests?

Chris explains that this isn’t really a move toward democracy.  It’s important to put into perspective the Cuban experience with democracy.  After the Spanish-American war, there was a lot of racial tensions surrounding the elections.  The government was later overthrown 3 times in 26 years.  During the last 60+ years, despite the problems of the Cuban government, it’s been stable. 

 

The protests, in Chris’ view, are actually a reaction to the US sanctions.  They are forcing the people into the streets.  However, the food shortages, blackouts, lack of access to medicine and the lack of COVID vaccinations, among other issues are coming to a head.  The most common word used in these protests is Libertad (“freedom” not “democracy”).  It’s actually a vague term.  He feels it’s a quality of life issue, not so much an issue of politics.

 

Dr. Raymond discusses the issues related to a command and control economy.  It’s an inefficient market resulting in shortages and surpluses.  It’s not a good system for the distribution of goods and services.  It’s restrictive in terms of the ability for an individual to pursue his/her type of job or profession.  There are many ongoing distortions.  This underscores the people focusing on their immediate needs over some sort of regime change. 

 

Different Opinions, but not Misinformed

The Cuban population is very well-educated and also well-informed about domestic and global issues.  Millions of Cubans live abroad and are able to maintain connections with people still living on the island.  There’s a constant exchange of information, that gets around the state-controlled media.  Living under the current system, people form their own opinions. 

 

Dr. Raymond reminds us that even in the US, a person’s political affiliation generally follow that of their parents/friends and where they grew up.  We have common aspirations for the education of our children, good jobs and to provide for our families.

Americans tend to view issues as either black or white, but in life there is a tremendous amount of gray in between.  This may in fact explain part of what we’re seeing in Cuba, right now. 

To Contact Dr. Raymond:      https://www.bellarmine.edu/rubel-school-of-business/faculty

To Contact Chris Cloonan:     Chris@JustForeignPolicy.org

 

 

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