Obama administration breaks with historic Cuba policy; implements dramatic changes
By Ryan O’Regan
Research Associate for the Council on Hemispheric Affairs:
Just hours ago, the Obama Administration began instituting new policies regarding travel, trade, and commerce between Cuba and the United States. Following over 50 years of staunchly regressive policies regarding the Cuban Republic, these changes are now being widely welcomed on both sides of the Florida Strait.
A Host of New Policies
As posted on the White House website, highlights of the new policies include:
• An expansion of general licenses available to US citizens wishing to travel to Cuba, including: “(1) family visits; (2) official business of the US government, foreign governments, and certain intergovernmental organizations; (3) journalistic activity; (4) professional research and professional meetings; (5) educational activities; (6) religious activities; (7) public performances, clinics, workshops, athletic and other competitions, and exhibitions; (8) support for the Cuban people; (9) humanitarian projects; (10) activities of private foundations or research or educational institutes; (11) exportation, importation, or transmission of information or information materials; and (12) certain export transactions that may be considered for authorization under existing regulations and guidelines.”
• A raise in allowed quarterly remittance levels from $500 to $2,000 for cash sent from Cuban-Americans to relatives across the Strait. Importantly, remittances headed to independent startups will no longer require a specific license, thus easing the way for US residents to aid Cuba’s budding entrepreneurial class.
• Legalization of certain exports to the island, such as building materials, agricultural equipment, and business-related goods.
• Allowance of imports by licensed travelers up to $400 worth of goods from Cuba, “of which no more than $100 can consist of tobacco products and alcohol combined.”
• Financial relaxations allowing the creation of correspondent accounts in Cuba by US institutions, and the use of debit and credit cards on the island.[1]
Moreover, the Obama Administration has also announced a review of Cuba’s often-criticized status as an alleged State Sponsor of Terrorism (SST).[2]
Progress: Present and Future
While these reforms are hardly revolutionary, they represent a step in the right direction, and should the administration overcome steep opposition in the newly elected Republican Congress, continued progress could catalyze genuine transformation for Cuba and its citizenry.
By cutting some of the red tape surrounding US commercial activity with the island, the new policies will grant private enterprise a notable, much-needed boost. Remittances have long served as start-up capital for new businesses on the island. By simplifying the process of sending cash for entrepreneurial purposes, and raising limits on how much cash can be sent every quarter, these new policies could spur continued growth in private-sector enterprise in Cuba, already strong in the wake of reforms on the part of Raúl Castro’s government.[3] New rules on equipment exports should also help to alleviate some of the shortages caused by the ongoing US embargo.
These reforms’ positive impact on Cuba will almost certainly extend beyond the private sphere. US remittances already serve as a vital source of foreign currency for the Castro government, and by raising potential influxes by 300 percent. the new rules should help to secure imports for an island that, as of 2014 imported 80 percent of its food.[4] At a time when Cuba is seeking to increase its reserves (currently at $10 billion) over possible political and economic turmoil in Venezuela, remittances will only become more vital as a source of hard currency for the island.[5]
Of all the new policies announced, however, the review of Cuba’s status on the US list of SSTs provides the greatest portent of change. Since 1982, Cuba has stood accused by the United States of sponsoring left-wing terrorism in Africa and Latin America. Cuba’s place on the list, long criticized as illegitimate and unfair, has been put forward as the motivation for a large portion of US sanctions against it. A review could very likely result in Havana’s removal from the list. This would automatically remove a host of sanctions, grant it access to international institutions such as the IMF, and help open the way for greater rapprochement between the United States and Cuba.
Conclusions
On the whole, the newly-implemented policies, combined with the recent prisoner exchange and Cuba’s subsequent release of 53 political activists, establish the bedrock for progress towards a more just US-Cuba relationship, but fall far short of what is necessary if the United States truly intends to normalize relations with the island.[6] If relations are to move forward, the administration must follow through with its removal of Cuba’s status as an SST, but President Obama can only do so much. The true challenge to normalization lies in the embargo itself, and Republicans in Congress must be cajoled into finally repealing the cluster of laws that make up its core.
References:
[1] “FACT SHEET: Charting a New Course on Cuba.” The White House. December 17, 2014. Accessed January 16, 2015.
[2] Ibid.
[3] Feinberg, Richard. “Middle Classes in Socialist Cuba.” The Brookings Institution. November 8, 2013. Accessed January 16, 2015.
[4] Blue, Sarah A. 2013. Internationalism’s Remittances: The Impact of Temporary Migration on Cuban Society. International Journal of Cuban Studies.
[5] Frank, Marc. “Cuba Inches toward Transparency, Seeking Investment and Credit.” Reuters. December 24, 2014. Accessed January 16, 2015.
[6] Calamur, Krishnadev. ” Prisoner Exchange With Cuba Led To Freedom For Top US Intelligence Agent.” The Two-Way Breaking News from NPR. December 17, 2014. Accessed January 16, 2015.
The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being "one of the nation's most respected bodies of scholars and policy makers." For more information, visit www.coha.org or email coha@coha.org
January 20, 2015
Caribbeannewsnow
