Cuba: With Hard Currency the Embargo is a Joke / Ivan Garcia

divisas ivan Tienda-de-tenis-Nike-en-La-Habana-_ab-620x330Ivan Garcia, 22 October 2015 — The Commodore Center Mall, to the west of Havana, is one of the preferred shopping sites for the official intellectual jet set, who from their newsletter launch poison darts against “Yankee imperialism and its cruel economic blockade against Cuba.” But in their private lives they dazzle themselves with products Made in the USA.

In this chain of stores flanking the Commodore Hotel, the showcases display Nike, New Balance, Levi denims, Colgate toothpaste, Palmolive soap and Head & Shoulders shampoo, among more than fifty other American brands.

In an open air cafe, you can drink Coca-Cola and enjoy German sausages flavored with Del Monte tomato sauce. On the other side of Avenida Tercera, in the Business Center, appliances such as Black & Decker electric skillets, RCA blenders and Hamilton rice cookers are sold, all patented in the USA.

I invite you to tour the twenty international pharmacies tucked away in Havana. There you can buy products made by Johnson & Johnson, antihistamines and antibiotics and other products from US labs.

At any Havana store you show up at with hard currency you can buy California apples and Kentucky chicken thighs. Since 1993, all this merchandise, produced by the “Revolution’s number one enemy” is sold legally on the Island to those Cubans who, in one way or another, come to possess dollars, euros, or convertible pesos.

In the offices of national institutions, some 90% of the computers use Windows software. And in those areas, where one might think that cheap nationalism, the registered brand of Casa Castro, generates guys allergic to Yankee paraphernalia, you can calmly observe a police official wearing RayBans, taking statements from a regime opponent accused of being a “mercenary and lackey of the American government” on an HP computer.

How rigorously and to what extent does the US economic and financial embargo affect Cuba, I asked a university professor, a specialist in economic matters.

The man cleared his throat and responded, “There is plenty of political propaganda. The story is simple. Fidel Castro nationalized dozens of American companies and in the give and take of foreign policy, Eisenhower stopped buying Cuban sugar, our main export product and then the legislature decreed a partial economic and financial embargo and then Kennedy strengthened it and in 1996, after Cuba shot down the four Brothers to the Rescue planes, Clinton codified it.” He drinks some mineral water from a bottle and continues:

“From whatever side you look at it, the Palace of the Revolution or White House, the embargo is the product of a political dispute that brought the dirty war and subversion on both sides. Fidel Castro believed he was licensed to export guerrillas to Latin America, support with arms and instructors the Colombian and El Salvadoran guerrillas, and offer political asylum to people from the United States who were terrorists and criminals,” he explains in a neutral voice.

He continues, “Of course in economic terms, Cuba has taken the brunt of that dirty war. Before 1959, 95% of our economic structure depended on trade with the United States. But in the 38 years we were subsidized by the Kremlin (1961-1989), the effects of the embargo were hardly noticed. If the Cuban government had been proactive and established a nationalist and sovereign strategy — without participating in the African wars which is one of the causes of the current extensive economic crisis, and had placed an emphasis on saving resources, economic expansion and a free market and doing business with the West — the current effects of the embargo would be minor.

“It is a heavy burden, especially financially, because transactions can’t be made in dollars and that increases the costs of freight and exports. The US Office of Foreign Assets Control’s closing of foreign banks to commerce with Cuba has been a hard blow to credit and businesses. But since December 17th [the day Cuba and the US announced a reestablishment of relations], Obama has partially dismantled the embargo.”

“Still, it remains. And it is complicated to buy medicines or food paying cash, because due to the economic disaster the Cuban central bank has no liquidity. In addition, there is a marked government emphasis on favoring military companies and groups under the harmful control of the family capitalism which is in control in Cuba.

“There is also a harmful Cuban State embargo that affects private entrepreneurs and ordinary citizens. Look at the abusive customs tariffs and you can see that the State is not interested in making things easier for people to get ahead by their own efforts,” concludes the Havana professor.

The olive-green autocracy cites economic losses of more than 121 billion dollars. The US executive demands 7 billion in compensation for nationalizations carried out by Fidel Castro against American properties.

The reestablishment of relations between the two countries who experienced their own Cold War would allow the development of a strategy that would satisfy the two parties.

But for now, General Castro’s government simply makes demands without giving anything in return. It considers itself a victim of the embargo. And asks for redress with a volume of capital that is more than nine times the 13 billion dollars of the Marshall Plan for post-war Europe in 1947.

Silverio, a banker, believes that the White House must repair the economic damage, “but not this monstrous amount of money that Raul Castro is asking for. An exit may be that the United States invests in public works and housing for poor people, which is the majority in Cuba. And not by giving those resources to the Cuban State which, through lack of transparency, corruption and inefficiency, would result in some of the money fattening the pockets of a few,” he says.

Litigation and negotiations on damages from the embargo and compensation from the Castro government to US businesses have only begun.

Meanwhile, in Cuba, with enough hard currency, the rigors of the embargo are a joke.

Photo: Store where Nikes are sold in Havana. Taken from “What embargo: Top U.S. brands sell in Cuba,” AP dispatch published in May 2007 by NBC News.