Economic Embargo: a Burden for Cuba’s Future / Iván García

The United States embargo is relative. If Cuba had fulfilled its economic duties, it could buy merchandise in any other place without worrying about the shipping freight cost.

In spite of the embargo, Raul Castro can afford the luxury of buying Humvee jeeps – a United States army vehicle – to travel Cayo Saetía’s virgin prairies, in Holguin province, when the top brass goes hunting.

Therefore, who suffers the consequences of the embargo most is the average Cuban, not their rulers. Right now, the Cuban-American political lobbyists are exerting strong pressure in order to enforce the embargo restrictions.

As in any conflict, there are supporters and detractors. There is a phenomenon associated with the embargo of the utmost importance. It is the future compensation or restitution for those affected as a result of the massive nationalizations of American companies and Cuban citizens by Fidel Castro’s “olive green government” in the first years of the Revolution.

According to the Helms-Burton Act, even if there is a future democratic government in Cuba, the embargo would continue until the victims of the expropriation have been compensated. For many, it’s something simple. They naively believe democracy is a magic wand that will turn into gold all the shit accumulated after 52 years of economic disasters.

But it is not like that. See for yourself: Cuba owes money to everybody. We are the most indebted country in the world on a per person basis. To Russia we owe 25 million rubles. To Spain, China and the Paris Club, billions of dollars.

Add a few more billions to the Cubans, now U.S. citizens, who lost their properties. In fact, there are a significant number of legal suits in the United States on the issue of compensation.

It is known that the Castro brothers are not going to pay. Therefore, the huge debt will fall on the shoulders of a future democratic government. The more time it takes, the more money will be accumulated. And the Cuban government will have to pay. Or sit down and negotiate.

The changes in the island can be delayed from ten to fifteen years, but they will come. The design drawn up by the current government is based on military corporations that accumulate large investments. They have been distributing the nation among themselves. A real pinata.

A future administration will be bankrupt. Even with deep cuts in social services, encouraging foreign investment or implementing flexible laws and low taxes, it won’t be able to accumulate enough capital to pay the national debt.

Antonio Rodiles, economist, from one of the think tanks who resides in Havana, has looked deeply into the subject and addresses the issue in an article entitled “Liberalization of vacant land and dilapidated properties, a necessary step to initiate a recovery process”. It’s founded on the experience of the Eastern European communist countries.

According to Mr. Rodiles, a future Cuban democratic government could compensate by selling bonds, businesses, lots and vacant land to foreign companies or citizens affected by expropriation.

In this article, Oscar Espinosa Chepe, dissident economist, rationalizes that “in regard to the refunds, the Cuban reality advises other methods. With regard to housing, we are in favor of a massive granting of these properties, along with all the responsibilities inherent to the current onerous usufructuaries.”

Espinosa Chepe believes that the fairest approach could be the return of these properties to their former owners. “But because of the time elapsed and the transformations of these properties, some of them already destroyed; the best solution would be to pay the original owners, which could be done through bonds”.

To undertake the payment of the debts incurred by the Castro brothers, a future government would have to auction the businesses and draw up a severe adjustments plan. Wilfredo Vallin, attorney at law, believes it’s probable that many countries, the United States among them, will forgive the Cuban national debt.

But a real policy is not articulated on the basis of assumptions. It wouldn’t be a profitable strategy for a new government in Cuba to disburse huge expenses to pay for an inherited debt due to Castro’s economic anarchy.

If the Castro brothers, as it’s supposed, have no intention whatsoever of compensating the property owners, then it would have to be negotiated with a future transitional government. Lifting the embargo now is a good way to save time.

The businesses and economically affected citizens should be financially compensated, without affecting Cuba’s development, and without fiscal adjustments that provoke social unrest. After five decades, plus any extended delay to end Castro’s dynasty, it is not advisable to require more sacrifices from the people.

Now, without another word, Cubans have to make a new holes in their belt. But when they get used to living in freedom, at the first change, outraged, they will throw themselves to protest on the streets. Those are the benefits of a democracy.

Video: Cay Saetia. Located in the Bay of Nipe, north of the province of Holguin. Despite being considered Raul Castro’s “private island,” the town lives off of tourism, which it is controlled by Gaviota S.A, a group run by the military. One of the main attractions are the safaris, where tourists can see camels, deer, antelopes, water buffaloes, boars, horses and parrots among other species.

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Translated by: Adrian Rodriguez

July 27 2011