If the U.S. were to end the embargo and lift the travel ban without
major reforms in Cuba, there would be significant implications:
- Money from American tourists would flow into businesses owned by
the Castro government thus strengthening state enterprises. The tourist
industry is controlled by the military and General Raul Castro.
- Tourist dollars would be spent on products, i.e., rum, tobacco,
etc., produced by state enterprises, and tourists would stay in hotels
owned partially or wholly by the Cuban government. The principal airline
shuffling tourists around the island, Gaviota, is owned and operated
by the Cuban military.
- American tourists will have limited contact with Cubans. Most Cuban
resorts are built in isolated areas, are off limits to the average
Cuban, and are controlled by Cuba’s efficient security apparatus.
Most Americans don’t speak Spanish, have but limited contact
with ordinary Cubans, and are not interested in visiting the island
to subvert its regime. Law 88 enacted in 1999 prohibits Cubans from
receiving publications from tourists. Penalties include jail terms.
- While providing the Castro government with much needed dollars,
the economic impact of tourism on the Cuban population would be limited.
Dollars will trickle down to the Cuban poor in only small quantities,
while state and foreign enterprises will benefit most.
- The assumption that the Cuban leadership would allow U.S. tourists
or businesses to subvert the revolution and influence internal developments
is at best naïve. As we have seen in other circumstances, U.S.
travelers to Cuba could be subject to harassment and imprisonment.
- Over the past decades hundred of thousands of Canadian, European
and Latin American tourists have visited the island. Cuba is not more
democratic today. If anything, Cuba is more totalitarian, with the
state and its control apparatus having been strengthened as a result
of the influx of tourist dollars.
- As occurred in the mid-1990s, an infusion of American tourist dollars
will provide the regime with a further disincentive to adopt deeper
economic reforms. Cuba’s limited economic reforms were enacted
in the early 1990s, when the island’s economic contraction was
at its worst. Once the economy began to stabilize by 1996 as a result
of foreign tourism and investments, and exile remittances, the earlier
reforms were halted or rescinded by Castro.
- Lifting the embargo and the travel ban without major concessions
from Cuba would send the wrong message “to the enemies of the
United States”: that a foreign leader can seize U.S. properties
without compensation; allow the use of his territory for the introduction
of nuclear missiles aimed at the United States; espouse terrorism
and anti-U.S. causes throughout the world; and eventually the United
States will “forget and forgive,” and reward him with
tourism, investments and economic aid.
- Since the Ford/Carter era, U.S. policy toward Latin America has
emphasized democracy, human rights and constitutional government.
Under President Reagan the U.S. intervened in Grenada, under President
Bush, Sr. the U.S. intervened in Panama and under President Clinton
the U.S. landed marines in Haiti, all to restore democracy to those
countries. The U.S. has prevented military coups in the region and
supported the will of the people in free elections. U.S. policy has
not been uniformly applied throughout the world, yet it is U.S. policy
in the region. Cuba is part of Latin America. While no one is advocating
military intervention, normalization of relations with a military
dictatorship in Cuba will send the wrong message to the rest of the
- Once American tourists begin to visit Cuba, Castro would probably
restrict travel by Cuban-Americans. For the Castro regime, Cuban-Americans
represent a far more subversive group because of their ability to
speak to friends and relatives on the island, and to influence their
views on the Castro regime and on the United States. Indeed, the return
of Cuban exiles in 1979-80 precipitated the mass exodus of Cubans
from Mariel in 1980.
- A large influx of American tourists into Cuba would have a dislocating
effect on the economies of smaller Caribbean islands such as Jamaica,
the Dominican Republic, the Bahamas, Puerto Rico, and even Florida,
highly dependent on tourism for their well-being. Careful planning
must take place, lest we create significant hardships and social problems
in these countries.
If the embargo is lifted, limited trade with, and investments in Cuba
would develop. Yet there are significant implications.
- All trade with Cuba is done with state owned businesses. Since Cuba
has very little credit and is a major debtor nation, the U.S. and
its businesses would have to provide credits to Cuban enterprises.
There is a long history of Cuba defaulting on loans.
- Cuba is not likely to buy a substantial amount of products in the
U.S. In the past few years, Cuba purchased several hundred million
dollars of food in the U.S. That amount is now down to $170 million
per year. Cuba can buy in any other country and it is not likely to
abandon its relationship with China, Russia, Venezuela, and Iran to
become a major trading partner of the U.S.
- Cuba has very little to sell in the U.S. Nickel, one of Cuba's major
exports, is controlled by the Canadians and exported primarily to
Canada. Cuba has decimated its sugar industry and there is no appetite
in the U.S. for more sugar. Cigars and rum are important Cuban exports.
Yet, cigar production is mostly committed to the European market.
Cuban rum could become an important export, competing with Puerto
Rican and other Caribbean rums.
- In Cuba, foreign investors cannot partner with private Cuban citizens.
They can only invest in the island through minority joint ventures
with the government and its state enterprises.
- The dominant enterprise in the Cuban economy is the Grupo GAESA,
controlled by the Cuban military. Most investments are done through
or with GAESA. Therefore, American companies willing to invest in
Cuba will have to partner mostly with the Cuban military.
- Cuba ranks 176 out of 177 countries in the world in terms of economic
freedom. Outshined only by North Korea. It ranks as one of the most
unattractive investments next to Iran, Zimbabwe, Libya, Mali, etc.
- Foreign investors cannot hire, fire, or pay workers directly. They
must go through the Cuban government employment agency which selects
the workers. Investors pay the government in dollars or euros and
the government pays the workers a meager 10% in Cuban pesos.
- Corruption is pervasive, undermining equity and respect for the
rule of law.
- Cuba does not have an independent/transparent legal system. All
judges are appointed by the State and all lawyers are licensed by
the State. In the last few years, European investors have had over
$1 billion arbitrarily frozen by the government and several investments
have been confiscated. Cuba's Law 77 allows the State to expropriate
foreign-invested assets for reason of "public utility" or
"social interest." In the last year, the CEOs of three companies
with extensive dealings with the Cuban government were arrested without
- If the travel ban is lifted unilaterally now or the embargo is ended
by the U.S., what will the U.S. government have to negotiate with
a future regime in Cuba and to encourage changes in the island? These
policies could be an important bargaining chip with a future regime
willing to provide concessions in the area of political and economic
- The travel ban and the embargo should be lifted as a result of negotiations
between the U.S. and a Cuban government willing to provide meaningful
and irreversible political and economic concessions or when there
is a democratic government in place in the island.
(1) They are Cy Tokmakjian of the Tokmakjian Group, Sarkis Yacoubian
of Tri-Star Caribbean, both from Canada, and Amado Fakhre of Coral Capital,
* Jaime Suchlicki is Emilio Bacardi Moreau Distinguished
Professor and Director, Institute for Cuban and Cuban-American Studies,
University of Miami. He is the author of Cuba: From Columbus to Castro,
now in its fifth edition; Mexico: From Montezuma to the Rise of PAN,
now in its second edition and the recently published Breve Historia
The CTP can be contacted at P.O.
Box 248174, Coral Gables, Florida 33124-3010, Tel: 305-284-CUBA (2822),
Fax: 305-284-4875, and by email at email@example.com.
The CTP Website is accessible at http://ctp.iccas.miami.edu.