A new report by the Washington-based think tank, Center for Democracy in the Americas, has urged the United States to do more to encourage market reforms and restructuring now underway in Cuba.
“After 50 years of sanctions, and a generation after the demise of the Cold War, it is incumbent upon U.S. policy makers to understand the changes taking place in Cuba today and respond accordingly,’’ says the report, pointing out that “the success or failure of the reform process will largely be determined in Havana, not Washington.”
Although Cuba’s economy is still largely state-controlled, under President Raúl Castro it has taken steps to reduce the size of government by allowing Cuban citizens to operate their own small businesses and form cooperatives.
Castro has also ended some state subsidies and began phasing out others, such as the ration card.
Other market-oriented reforms, such as allowing Cubans to buy and sell homes and cars, were enacted this fall.
But the report notes advocates for reform of U.S. policy toward Cuba, the big change announced by Castro — laying off more than 1 million workers, about a fifth of the state payroll — was “halted before it ever really got underway.”
The report says that Cuba’s problems “stem from the limited ways in which its economy produces wealth, its heavy reliance on imports to feed its population, growing domestic economic inequality, and the lack of opportunities for citizens to productively use knowledge acquired through advanced education.”
This year, the Cuba government is expecting economic growth of 2.9 percent. That’s an improvement over 2010 when the economy grew by 2.1 percent.
The study notes that many in the United States question the sincerity of Cuba’s reform efforts and whether they are permanent.
Cuba experimented with economic liberalization in the 1990s after the collapse of the Soviet bloc sent its economy into a downward spiral.
It allowed self-employment in 160 occupations, and by 1996 more than 200,000 Cubans had licenses to work for themselves.
But as Cuba emerged from the post-Soviet crisis in the late 1990s, it began to roll back the reforms.
“Despite doubts on both sides of the Florida Straits, the evidence leads us to conclude that Cuba’s reform process is here to stay,” the study says, recommending that U.S. policymakers acknowledge that Cuba’s reforms are real.
For more than 50 years, the centerpiece of U.S. policy on Cuba has been the embargo against the Spanish-speaking Caribbean island in an effort to choke off the government economically.
“In the final analysis, ending the embargo and normalizing relations with Cuba ought to be a foreign policy priority of the United States,” says the report. To lift the embargo would take an act of Congress.
In the interim, the report makes several other recommendations that it says would send a “message of encouragement” to advocates of reform in Cuba.
It urges President Obama, by executive decision, to take measures to “ease the flow of financing to Cuba and to spur demand” for goods and services provided by the emerging private sector.
It says, for example, that Obama could use his executive authority to further expand the categories of Americans allowed to visit Cuba.
The report further urges the executive branch to clarify remittance rules because regulations are vague, and there is currently no mechanism for Americans without family ties who want to send remittances to Cubans.
In addition, the report calls for the removal of Cuba should from the list of state sponsors of terrorism, which subjects it to economic sanctions.
It also urges Washington to stop funding USAID Cuba programs to bring about economic and political transition in Cuba, stating that such programs are a waste of money and increase distrust between the two countries.
Obama has said his administration decided to allow more remittances and travel earlier this year “to create an economic space for [people] to prosper” in Cuba.
He said the United States would be open to a new relationship but only “if the Cuban government starts taking the proper steps to open up its own country, and provide the space and respect for human rights that would allow the Cuban people to determine their own destiny.”