The Cuban Revolution and its Impact on Latin America
Edward Wilson IB Paper (1)
1. OUTDATED & UNTAPPED
An analysis of the Cuban economy and it’s how it will
operate it the future, given a restored diplomatic
relationship with the United States
By
Edward Wilson
Ewilso58@uncc.edu | 800830266
International Business Capstone Project
MGMT3275-001 | Conboy
University of North Carolina at Charlotte
Spring 2016
2. 2OUTDATED&UNTAPPED
TABLE OF CONTENTS
CHAPTER PAGE
I. INTRODUCTION & A HISTORY OF CUBA……………………..……3
II. BACKGROUND OF US-CUBA RELATIONS……………………...…..9
a. PostSpan-Am War……………………………………………..….9
b. The Rise of Fidel Castro & the Cuban Revolution……..………...11
III. RESTOREDTIES……………………………………………………….17
IV. THE FUTURE OF CUBA AND ITS ECONOMY…………………..…19
V. CONCLUSION………………………………………………..….….….20
VI. BIBLIOGRAPHY…………………………………..……………....…23
3. 3OUTDATED&UNTAPPED
CHAPTER1
INTRODUCTION AND A HISTORY OF CUBA
Introduction
Cuba, today, is sitting at a significant crossroads in their history. For the past 55 years,
modernization has been at a complete standstill and Cuban citizens have been subject to little
to no freedom. The hope for change in their broken system has been the driving force of the
Cuban people’s resilient and nationalistic character. Over the past few years, the inevitable
change that has been yearned for in Cuba is slowly beginning to evolve into reality. The
tarnished relationship between Cuba and the United States, finally, is in the process of being
eased. The eventual resolution of this powerful and complex relationship with the United States
will have a tremendous impact on both the state of Cuba’s economy and the political landscape
in the future.
A country that has been plundered by a succession of foreign powers, homegrown
dictators, and mobsters imported from America now languishes in a bizarre time warp where
little has changed in more than half a century (Chandler). Since the country’s discovery by the
Spanish in 1492, Cuba and its inhabitants have been subject to continuous oppression and
political instability. As a result of various conflicts and sanctions, the country has resided in a
stagnant state of isolation from the global trade community for nearly 60 years. In turn, Cuba
lacks the modern infrastructure needed to prevail as a thriving economy that can both participate
in and benefit from international trade relationships.
The purpose of this International Business Capstone paper is to explore the historic
events that contributed to Cuba’s present day economic depression and to evaluate how easing
their tensions with the United States will aid in their return to economic prosperity in the eyes
of the global economy. Chapter 1 – “Introduction and a History of Cuba” – provides an
4. 4OUTDATED&UNTAPPED
overview of Cuba’s History by illustrating the successive historical events that molded the
image of Cuba that exists today. It is apparent that the country’s unfortunate history can be
attributed to the selfish dictators who have assumed power over Cuba since its establishment in
the late 19th century.. I will provide a timeline of the significant events that preceded Cuba’s
independence in 1902. The information presented in this chapter will serve as the foundation
for understanding how and why the country has been led to such a fragile condition. The
following chapter - “Background of US-Cuba Relations” - builds off of Chapter 1 by analyzing
the origin and significant past events, of the International trade relationship between the United
States and their Caribbean neighbor to the South. Being the most powerful country in the world,
the US has tremendous influence on who certain countries will and will not trade with. I will
explain, in-depth, how the US-Cuba trade embargo not only restricted trade with the US, but
also negatively affected Cuba’s trading relationships with other countries.
In Chapter 3 - “Restored ties” - I will explain how the current status of the tension
between the two countries has come to be. Although the embargo is still in effect, certain
modifications have been set to lessen the restrictions imposed on Cuba with the intentions of
ultimately abolishing the embargo in the near future. The next chapter - “The Future of Cuba
and it’s Economy” - will begin with a brief background on what the economy in Cuba has
traditionally been comprised of. I will follow up with an outline of the nature of their economy
and the major exports that the market is currently composed of. The expected outcomes of the
eased trade embargo will also be illustrated in this chapter.
After reading this paper, the reader should exhibit knowledge of the origins of Cuba’s
current economic state and be able to visualize the benefits that will come from lifting the trade
embargo. Both the US and Cuba will benefit differently from the improved relations. This paper
will provide both facts and insight on what is expected and what will most likely result from
the expulsion of the trade embargo.
5. 5OUTDATED&UNTAPPED
Historyof Cuba
In order to understand the current state of Cuba and the importance of strengthening its
ties with the US, one must be well informed about the history of the Caribbean country which
resides only 90 miles from the Southeastern corner of the United States. Cuba was claimed by
Spain in 1492, shortly after Christopher Columbus discovered the island on his maiden voyage.
Original inhabitants included Taino, Guanahatabey, and Ciboney tribes. These native peoples
lived off of the island’s extremely fertile land and tropical climate which allowed them to grow
yucca, corn, peanuts, squash, peppers, fruit and tobacco (To this day, the agricultural potential
in Cuba is one of its crowned traits). The cultural values and traditions of these indigenous
groups, however, were not able to survive Spain’s colonization of the island in the early 16th
century. Subsequently, Spanish culture, institutions, language, and religion serve as the
foundation for Cuban society today.
This society of this small island nation was developed slowly but gradually over an
extensive period of time. In the following three centuries after colonization, Cuba was used
primarily as a pit stop for Spanish voyages to the new world, poorly utilizing the Island’s
agricultural potential. Pastoral pursuits and agriculture served as the basis of the economy
(Library of Congress) as tobacco and kurtrice were established as Cuba’s primary goods.
Although growth was slow during this time, it was still beneficial and labor was vital for
continual progression. The invasion and colonization by Spain left very few native peoples
alive so the availability of laborers was extremely scarce. In turn, African slaves were then
imported to work the plantations as field laborers. However, Spanish trade laws made it very
difficult to keep up with the advances for processing sugar cane that were being developed by
British occupied Barbados and French occupied Haiti during the 17th and 18th centuries.
Additionally, Spain had restricted Cuba’s access to the slave trade during this period of time
(Henken).
6. 6OUTDATED&UNTAPPED
Not until the early 19th century was Cuban industry really able to establish an
International presence. A simultaneous turn of events provided Cuba with the opportunity to
finally establish some sort of infrastructure and enter the global trade arena. The growth of the
United States as an independent nation, the collapse of Haiti as a sugar-producing colony,
Spanish protective policies, and the ingenuity of Cuba’s Creole business class all converged
to produce a sugar revolution on the island (Library of Congress). The Haitian
revolution(1791-1804) proved to be one of the most significant events in Cuba’s early, post-
colonization, history. Thousands of French refugees, fleeing the slave rebellion in Saint
Domingue, brought slaves and expertise in sugar refining and coffee growing into eastern
Cuba in the 1790s and early 19th century (SlaveryInCuba). In only a few short years, Cuba
was transformed from just a neglected Spanish island into the world’s leading producer and
supplier of sugar. Slaves were imported by the masses, plantations were erected throughout
the countryside, and the sugarcane industry supplanted the country's previous leading
industry, tobacco.
Toward the end of the nineteenth century, Cuban loyalty began to change as a result of
Creole rivalry with Spaniards for the governing of the island, increased Spanish despotism
and taxation, and the growth of Cuban nationalism (LibraryOfCongress). These developments
initiated a succession of three wars fought by Cuban rebels for their independence from Spain.
The first of these wars was the Ten Years War (1868-78). This rebellion was led by sugar
planter Carlos Manuel de Céspedes, who corralled thousands of slaves and cuban nationals to
fight for the cause. This conflict was put to an end as a result of the 1878 Pact of Zanjón.
Although Spain did not grant full freedom to Cuba, the agreement promised greater autonomy
to the country. In 1879–1880, Cuban patriot Calixto García attempted to start another war
known as “The Little War”, but did not receive enough support to have any significant impact
on Spain’s position on the matter (SpanAmWar).
Supplemental to this dense period of conflict, the years following “The Ten Years
War” were filled with crucial societal changes for Cuba. With the abolition of slavery in
7. 7OUTDATED&UNTAPPED
October 1886, freed slaves entered the ranks of farmers and the urban working class. Many
wealthy Cubans lost their property, and joined the urban middle class. The number of sugar
mills plummeted and efficiency skyrocketed: only companies, and the most powerful
plantation owners, remained in business (WIKI). It was during this time that the US began
investing heavily into Cuba (predominantly into the sugar, tobacco, and mining industry’s).
US businessmen began monopolizing the devalued sugar markets in Cuba. By 1894, US
investments in Cuba reached US$50 million and 90% of Cuba’s total exports went to the
United States.. Although Cuba remained Spanish territory politically, it started to be more
intertwined economically with the US (Britannica). Afraid that the US was on the verge of
gaining financial control in Cuba, Spain cancelled a trade pact between the two countries that
same year. This, alongside the imposition of more taxes and trade restrictions, prodded the
economically distressed Cubans to launch the Cuban War of Independence in February of
1895 (Britannica).
Led by Jose Marti, the Cuban rebel force that was assembled to fight the Spanish (known as
the Mambasi) clearly the odds stacked against them. After the Ten Years' War, Spain had
forbidden possession of weapons by private individuals (SpanAmWar). They compensated by
using guerrilla-style fighting, based in quick raids and fades to the environment, the element
of surprise, mounting their forces on fast horses, and using machetes against regular troops on
the march (WIKI). They acquired most of their weapons and ammunition in raids on the
Spaniards. By June 1895, the six or eight thousand rebels rallied by Marti faced fifty-two
thousand Spanish soldiers and nineteen warships. However, due to the Mambasi’s perfected
combat strategy and a “home-field advantage”, the rebel forces controlled most of the island
by January 1896. The success of the rebel troops can be directly attributed to their impeccable
execution of guerilla warfare. They operated mostly in the elevated countrysides of eastern
Cuba. The Spanish, without mobility to bring needed reinforcements, stayed on the roads and
in towns to avoid the rebel’s wrath. Unfortunately, for them, this was not enough to defeat the
rebels militarily.
8. 8OUTDATED&UNTAPPED
The Cubans had nearly won the war by February when the United States battleship
Maine - in Havana harbor to protect U.S. property and to signal the Cuban rebels that the
United States was worried about the course the revolution would take - exploded (Brittanica).
To this day, it is still a topic of debate as to whether the Spanish or the Cubans are to blame
for the bombing of the USS Maine. However, Newspaper's with high public influence
reported the story as an attack on the United States by Spain. This propelled the United States
Government to take immediate action which has come to be known as the beginning of The
Spanish-American War. America had additional intentions for intervening. And although the
US already had heavily invested in the country and even showed interest in annexing it as a
US territory, US involvement in the Cuban War for Independence from Spain marked the
definitive event in the complicated relationship between the United States and Cuba that is in
question today.
9. 9OUTDATED&UNTAPPED
CHAPTER 2
BACKGROUND OF US-CUBA RELATIONS
a.Post Span-Am War
The U.S. had important economic interests that were being harmed by the prolonged
conflict and deepening uncertainty about the future of Cuba (Wiki). Declaration of war with
the Spanish was actively suspended by US President William Mckinly, who vigorously tried
to reach a peaceful agreement with Spain. However, Spain repeatedly promised specific
reforms that would pacify Cuba and repeatedly failed to deliver on those promise. It was only
a matter of time until American patience finally ran out. Already concerned about its
economic interests on the island and its strategic interest in a future Panama Canal, the United
States was aroused by heavy press following the sinking of USS Maine in Havana Harbor on
February 15 as the result of an explosion of undetermined origin (SpanAmWar). As a result
of the increasingly strained relations between Spain and the United States, the Americans
entered the conflict in 1898 (Library of Congress).
Arguably the most significant driving force behind America's decision to intervene on
Cuba’s fight for independence was the media coverage. US newspapers had a tremendous
impact on the United States public. For example, while on the verge of defeat by the Cuban
rebels, Spain implemented a reconcentration policy. In order to deprive the revolutionaries of
the rural support on which they depended, this policy forced hundreds of thousands of Cubans
into camps in the towns and cities, where they died of starvation and disease by the tens of
thousands (Britannica). Newspaper publications New York Journal and New York World
began printing sensational stories portraying the Spanish atrocities, igniting “War fever”
among the United States public. Not only did the media coverage of the war derive sympathy
and support for the Island nation, but it also sparked the American fascination with Cuban
culture.
10. 10OUTDATED&UNTAPPED
When the Spanish-American War broke out in 1898, Cuban rebels achieved little
success because the United States Army employed them as labor troops. This signaled the role
that Cuba would adopt under American control for the decades to come (SpanAmWar). With
superior numbers and technology, the US military limited this war to only 10 weeks. In
December 1898, with the Treaty of Paris, the United States emerged as the victorious power
in the Spanish-American War, thereby ensuring the expulsion of Spain and U.S. tutelage over
Cuban affairs (Britannica). The end of European colonialism, however, did not result in the
creation of a free country as was intended by the Cuban revolutionary’s.
In return for aiding the Cubans in the War, the U.S. Congress had passed the Teller
Amendment prior to the war, promising Cuban independence. However, the Senate approved
the Platt Amendment, forcing a peace treaty on Cuba which prohibited it from signing treaties
with other nations or contracting a public debt. The Platt Amendment was pushed by
imperialists who wanted to project U.S. power abroad (in contrast to the Teller Amendment
which was pushed by anti-imperialists who called for a restraint on U.S. rule) (WIKI). A U.S.
occupation force remained for more than three years, leaving only after the constitution of the
new Republic of Cuba had incorporated the provisions of the Platt Amendment (1901), a rider
to a U.S. appropriations bill, which specified the conditions for American withdrawal. Among
those conditions were (1) the guarantee that Cuba would not transfer any of its land to any
foreign power but the United States, (2) limitations on Cuba’s negotiations with other
countries, (3) the establishment of a U.S. naval base in Cuba, and (4) the U.S. right to
intervene in Cuba to preserve Cuban independence (SpanAmWar).
The United States viewed Cuba in the Nineteenth century as a country needing
American control that can be economically exploited (SpanAmWar). The end to of the
Spanish-American War prompted the creation of the Republic of Cuba, which was effected on
May 20, 1902. As you can see, despite the fact that Cuba technically gained its independence
after the war ended, the United States government ensured that it had some form of power and
control over Cuban affairs. This irritated a large portion of the Cuban population, who viewed
11. 11OUTDATED&UNTAPPED
America’s tactics as an insult to their Independence. For example, at the signing of the Treaty
of Paris (1783), while the United States and Spanish forces were represented, the Cuban
rebels were not even invited (Henken). Additionally, upon the war’s conclusion, it was the
American flag that was raised in the Cuban capital, and not their own. Subsequently, tensions
between Cuba and the United States were born.
b.The Rise of Castro / The Cuban Revolution
By 1926 U.S companies owned 60% of the Cuban sugar industry and imported 95%
of the total Cuban crop, and Washington was generally supportive of successive Cuban
Governments (WIKI). The rise of General Fulgencio Batista in the 1930s to de facto leader
and President of Cuba for two terms (1940–44 and 1952–59) led to an era of close co-
operation between the governments of Cuba and the United States. Another Treaty of
relations between the two countries was even signed in 1934. The Batista era witnessed the
almost complete domination of Cuba's economy by the United States, as the number of
American corporations continued to swell, though corruption was rife and Havana also
became a popular sanctuary for American organized crime figures (Nations).
In the 1950’s, during Batista’s second term, the Cuban President’s leadership style
appeared to have transformed from progressive to dictatorial and indifferent to popular
concerns. During the 1952 elections, with the strong possibility of not being re-elected, he
seized power before the elections, which were cancelled. This was what the islands origins of
Communism became. Many people in Cuba were disgusted by his power grab, preferring
Cuba’s democracy, as flawed as it was (Coltman). Among these people was future dictator of
Cuba, Fidel Castro. At the time, Castro was a young lawyer and activist who would have,
allegedly, won a seat in Congress had the 1952 elections taken place. As a response to
Batista’s seizure of power, Castro petitioned to have Batista recalled from power on the
grounds of tyranny and corruption. However, Castro's constitutional arguments were rejected
12. 12OUTDATED&UNTAPPED
by the Cuban courts (WIKI). After deciding that the Cuban regime could not be replaced
through legal means, Castro resolved to launch an armed revolution. To this end, he and his
brother Raúl founded a paramilitary organization known as "The Movement", stockpiling
weapons and recruiting around 1,200 followers from Havana's disgruntled working class by
the end of 1952 (WIKI).
Castro’s initial revolutionary efforts against the Batista government were met with
defeat. Fidel and his brother Raul organized a squadron of 123 Movement fighters with the
objective of overrunning multiple military bases and seizing the necessary artillery needed for
their revolution. The attacks were meticulously planned and, due to the limited number of
fighters and equipment, strategy relied heavily on the isolation of the compound and the
element of surprise. The first target was the Moncada barracks. Castro believed that
successful completion of this mission would lead to the support of many more Cuban
nationals willing to join in the fight against Batista.
On July 26, 1953, Fidel launched his surprise raid on the barracks. Outnumbered, out-
trained, and out-gunned, the Movement fighters were defeated by the soldiers who resided in
the barracks. Some rebels were able to retreat and escape (Fidel and Raul managed to escape,
but were later arrested and tried), however, many were captured and mercilessly murdered.
The Castro’s and surviving rebels were put on public trial. The brutality displayed by the
soldiers proved to be a critical reason why the verdicts of Fidel and Raul were imprisonment
and not execution. During the trials, Fidel, a trained lawyer, turned the tables on the Batista
dictatorship by making the trial about the power grab. Basically, his argument was that as a
loyal Cuban, he had taken up arms against the dictatorship because it was his civic duty. Once
again, his arguments were rejected by the court system and he was sentenced to fifteen years
in prison. However, his effort to overthrow a broken political system earned himself notoriety
as a nationally recognized figure and a hero to many poor Cubans.
13. 13OUTDATED&UNTAPPED
In a shocking turn of events, after only two years of imprisonment, the Castro brothers
were released. Under broad political pressure, the Batista government freed all political
prisoners in Cuba in 1955; including the Moncada attackers (WIKI). The newly-freed
Castro’s went to Mexico, where he made contact with other Cuban exiles eager to overthrow
Batista. He founded the 26th of July Movement and began making plans for a return to Cuba.
While in Mexico, he met Ernesto “Ché” Guevara and Camilo Cienfuegos, who were destined
to play important roles in the Cuban Revolution. The rebels acquired weapons and trained and
coordinated their return with fellow insurgents in Cuban cities. On November 25, 1956, 82
members of the movement boarded the yacht Granma and set sail for Cuba, arriving on
December 2 (About).
Upon arrival, the small fleet of rebels were ambushed and only approximately 20 of
the original 82 were able to survive and escape into the Sierra Maestra mountains. Of the
survivors were the Castro’s, Guevara, and Cienfuegos. Over the course of the next two years,
these mountains are where the 26th of July Movement builds their revolutionary army and
develops their political philosophy and strategy (History). The combat style used by Castro
and his rebels was the same as was implemented in the independence wars in the previous
century, Guerilla Warfare. The movement slowly but surely gained in strength, especially as
the dictatorship cracked down further on the populace.
Though guerrilla fighters at the time remained fewer than 200, they continuously
forced the Cuban army, comprised of over 35,000 soldiers, to retreat. By March 1958, U.S.-
Cuban relations were changing drastically, contributing significantly to the unrelenting defeat
of Batista’s forces. On March 14 of that year, U.S. President Dwight D. Eisenhower imposed
an arms embargo on the island (MSNBC). In a way, this embargo aided the rebels in the sense
that the army was not able to access weapons and the rebels operated on unregistered weapons
that the US had no control over. American support was swiftly shifting away from Batista
and, without being able to get American parts for repairs, the Cuban air force started to break
down (MSNBC). Finally, seeing that Castro’s victory was inevitable, Batista and his inner
14. 14OUTDATED&UNTAPPED
circle took what loot they could gather up and fled. The people of Cuba took to the streets,
joyfully greeting the rebels (MSNBC). Cienfuegos and Guevara and their men entered
Havana on January 2nd and disarmed the remaining military installations. Castro made his
way into Havana slowly, pausing in every town, city and village along the way to give
speeches to the cheering crowds, finally entering Havana on January 9 (WIKI).
The Cuban Revolution was a crucial turning point in U.S.-Cuban relations (Nations).
Bilateral relations deteriorated substantially. Although the American government was initially
willing to recognize Castro's new government, it soon came to fear that Communist
insurgencies would spread through the nations of Latin America, as they had in Southeast
Asia. Castro, meanwhile, resented the Americans for providing aid to Batista's government
during the revolution. After the revolutionary government nationalized all U.S. property in
Cuba in August 1960, the American Eisenhower administration froze all Cuban assets on
American soil, severed diplomatic ties and tightened its embargo of Cuba.In 1961, the U.S.
government backed an armed counter revolutionary assault on the Bay of Pigs with the aim of
ousting Castro, but the counterrevolutionaries were swiftly defeated by the Cuban military.
The American embargo against Cuba – the longest-lasting single foreign policy in American
history– is still in force as of 2016, although it has undergone a partial loosening in recent
years (Nations).
In 1961 the United States severed diplomatic ties with Cuba and began pursuing
covert operations to overthrow the Castro regime. The 1961 Bay of Pigs invasion, a botched
CIA-backed attempt to topple the government, fueled Cuban mistrust and nationalism, leading
to a secret agreement allowing the Soviet Union to build a missile base on the island (Cuba’s
relationship with the USSR intensified the tensions with the US). The United States
discovered those plans in October of 1962, setting off a fourteen-day standoff (CFR). U.S.
ships imposed a naval quarantine around the island, and Kennedy demanded the destruction
of the missile sites. The Cuban Missile Crisis ended with an agreement that the sites would be
15. 15OUTDATED&UNTAPPED
dismantled if the United States pledged not to invade Cuba; the United States also secretly
agreed to remove nuclear missiles from Turkey (CFR).
Following the events of 1961–62, economic and diplomatic isolation became the
major prongs of U.S. policy toward Cuba. This continued even after the Soviet Union's
collapse. Washington strengthened the embargo with the 1992 Cuba Democracy Act and 1996
Helms-Burton Act (PDF), which state that the embargo may not be lifted until Cuba holds
free and fair elections and transitions to a democratic government that excludes the Castro’s.
(Raúl has said he will leave office in 2018.) Some adjustments have been made to the trade
embargo to allow for the export of some U.S. medical supplies and agricultural products to
the island. But the Cuban government estimates that more than fifty years of stringent trade
restrictions has amounted to a loss of $1.126 trillion (Nations).
Another cause for conflict, human rights in Cuba continue to be a concern for U.S.
policymakers. In a 2014 report, Human Rights Watch said Cuba "continues to repress
individuals and groups who criticize the government or call for basic human rights" through
detentions, travel restrictions, beatings, and forced exile. In 2015, according to the Cuban
Commission for Human Rights and National Reconciliation (CCDHRN), the Cuban
government carried out more than 8,600 detentions of political activists (Amnesty).
It is also important to add that the rise of Castro supplemented the rise of the socialist party
in Cuba. The most powerful countries in the world are driven by the principles of Capitalism;
which is an economic system based on private ownership of the means of production and their
operation for profit (Investopedia). Capitalist economies thrive on wage labor, private
property, capital accumulation, a price system, voluntary exchange, and competitive markets.
Decision-making and investment is determined by the owners of the means of production in
financial and capital markets, and prices and the distribution of goods are mainly determined
by competition in the market (Investopedia). Socialists view this commoditization of labor as
an inhuman practice. Socialism advocates that the means of production be owned by the
16. 16OUTDATED&UNTAPPED
people, either directly or through government agencies. Socialist ideals also revolve around
the belief that wealth and income should be shared more equally among people.
Cuba is one of the most prominent socialist nations, having a mostly state-run economy, a
national health-care program, free education at all levels, subsidized housing, utilities,
entertainment and even subsidized food programs. These subsidies compensate for the low
salaries of Cuban workers, making them better off than their international counterparts in
many other countries (Investopedia). Cuba does not have a stock exchange – a crucial
indicator of a capital-free economy. Around 80% of Cuba's workforce is in state-owned
facilities. Introducing better reforms through new laws aimed to bring in higher foreign
investment, the changes to the closed “socialist economy” are already on their way to mixing
with the market-based open economy (Investopedia).
17. 17OUTDATED&UNTAPPED
CHAPTER 3
RESTORED TIES
There is an extensive list of events that have attributed to the long history of dispute
between the 2 nations. From the unjust detaining of alleged spies, to the threatening of a
nuclear war. But recent years have seen efforts, on both sides, to abandon old tactics in order
to reach a more beneficial position for both parties. Spurred by a burgeoning interest in the
assumed untapped product demand in Cuba, a growing number of free-marketers in Congress,
backed by Western and Great Plains lawmakers who represent agribusiness, have tried each
year since 2000 to water down or lift regulations preventing Americans from traveling to
Cuba (WIKI). Over the last decade, depending on the political climate, the United States has
tightened and relaxed restrictions on multiple occasions. While revisions of the embargo were
usually to tighten restrictions, one of the few times that the restrictions were relaxed came in
2001, following Southwestern Cuba’s Hurricane Michelle. The two countries came to an
agreement that allowed the US to sell food to Cuba in the aftermath of the storm (this was
forbidden under the previous implications of the embargo). To this day, the agreement has
stayed intact and the US is now Cuba’s main supplier of food (TIME).
Another attempt to ease relations came in 1999, when U.S. President Bill Clinton
eased travel restrictions to Cuba in an effort to increase cultural exchanges between the two
nations. . Most revisions of the embargo, however, have not been this positive. Relations
deteriorated again following the election of George W. Bush. During his campaign Bush
appealed for the support of Cuban-Americans by emphasizing his opposition to the
government of Fidel Castro and supporting tighter embargo restrictions (Wiki). Relations
between Cuba and the United States remain tenuous, but since Fidel Castro stepped down
from official leadership of the Cuban state and Barack Obama became president of the United
States, they have improved (Investopedia).
18. 18OUTDATED&UNTAPPED
U.S. President Barack Obama came into office seeking greater engagement with Cuba,
and in 2009 reversed some of the restrictions on remittances and travel set by his predecessor,
George W. Bush. During his first term, Obama also permitted U.S. telecommunications
companies to provide more cellular and satellite service in Cuba and allowed U.S. citizens to
send remittances to non–family members in Cuba and to travel there under license for
educational or religious purposes (CFR).
On December 17, 2014, Barack Obama and Raúl Castro announced that the United
States and Cuba would restore full diplomatic ties for the first time in more than fifty years.
The announcement followed a prisoner swap: The three still-jailed members of the Cuban
Five (one had been released in 2011 and another earlier in 2014) were released in exchange
for a U.S. intelligence asset, Rolando Sarraff Trujillo, who had been imprisoned in Havana for
nearly twenty years. Gross was also released that morning on humanitarian grounds. The
agreement came after eighteen months of secret talks between U.S. and Cuban officials that
were encouraged and brokered by Pope Francis (CFR).
19. 19OUTDATED&UNTAPPED
CHAPTER 4
THE FUTURE OF CUBA & ITS ECONOMY
During the days prior to the revolution, Cuba was a “hotbed for American tourism, a
place where well-heeled East Coasters came to enjoy plentiful sunshine, opulent beaches and
a nightlife scene that bustled year round (Forbes). In many ways, parts of Cuba were “Las
Vegas before Las Vegas”. With the United States and Cuba having taken small steps to
normalize relations in recent months, the primary subject in question is whether the island can
once again become a prominent destination for American tourists and, more broadly, a haven
for outside business investment.
Another thing to take into careful consideration is that Cuba’s crumbling infrastructure
is in no position to support Western-style tourist activity. The country generally lacks many of
the amenities needed to attract an influx of regular visitors, including a wide selection of
luxury hotels, golf courses and high-quality restaurants. Regardless, Raul Castro has
addressed this by having renovations done in the major cities, specifically Havana, in order to
accommodate the expected influx of tourists. For example, for the past 6 decades, Cuba has
allowed only only 5% of the country internet access. However, announced during Obama’s
historic visit this past month, Google has a current deal in Cuba to start setting up more wifi
and broadband access. Also, cruise ships have also been approved to travel from the US to
Cuba, and the first direct flight to Cuba recently took place.
Clearly, new investment will come slowly, and economic progress will be measured in
years, not months, but just as Las Vegas emerged from the shadow of the mob to become a
hub of tourism and legitimate business, so, too, can Cuba, even in the face of considerable
structural and political obstacles (Forbes). Among the most pressing problems that will shape
the relationship this year are migration, with thousands of Cubans intent on reaching the
United States stranded in Central America, and Cuba’s economic future, now that its
20. 20OUTDATED&UNTAPPED
preferential oil deal with Venezuela appears to be in jeopardy after the country’s opposition
won control of congress.
Business interests are hopeful that there could be a breakthrough and that major deals
resulting from the United States’ commercial opening toward Cuba might come to fruition.
For the Cubans, the most important thing is getting the embargo lifted — a difficult
proposition in an election year — and they don’t hesitate to preface most talks with U.S.
executives and politicians about the need to get rid of it. Nonetheless, President Obama is
making it a priority to get the reconfigured tensions underway before the next President of the
United States takes office.When asked about the reason behind his recent visit, Obama replied
“Although we still have significant differences around human rights and individual liberties
inside of Cuba, we felt that coming now would maximize our ability to prompt more change.”
CHAPTER 5
CONCLUSION
If 2015 was a watershed year in U.S.-Cuba relations with the resumption of diplomatic
ties and the opening of embassies, then 2016 is expected to be a year of definition as the two
former adversaries move past ceremony and tackle the hard issues that still separate them
(TIME). The embargo has proven , time and time again, to be an ineffective strategy that
negatively benefits both sides. With Cuba located only 90 miles away, a positive relationship
would be an indisposible asset both militarily and economically. The major failure of the
restrictions is that it has not harmed the Cuban government as much as it has the people of
Cuba. Cubans are denied access to technology, medicine, affordable food, and other goods
that could be available to them if the United States lifted the embargo (ProCon).
21. 21OUTDATED&UNTAPPED
The primary goal of the US has been to dethrone the Castro regime. While tensions
are easing, the priority remains to put an end to the socialism and communism that still
controls the country. Traditionally, the US Government have used the strategy of tightening
restrictions against trade in Cuba in order to achieve this goal. However, researchers are led to
believe that it is Free trade, NOT the isolation of an embargo that will promote democracy in
Cuba. An influx of US tourists and businesses would expose the sheltered island to American
culture and freedoms, and weaken the Castro regime's control over information coming into
the country. For example, trading with China led to economic reforms that brought 100
million people above the poverty line and improved access to health care and education across
the country (ProCon). Additionally, lifting the embargo would force the Cuban government to
address problems that it had previously blamed on US sanctions. Cuban officials have not
been forced to take responsibility for problems such as a failing healthcare system, lack of
access to medicine, the decline of the sugar industry, decrepit plumbing systems, and water
pollution because they use the embargo as a scapegoat. The Cuban Minister of Foreign
Affairs reportedly blamed the embargo for a total of $1.66 billion in damage to the Cuban
economy (ProCon).
It can be argued that the Cuban trade embargo was unnecessary and the 60 year old
conflict was completely avoidable. My opinion, I definitely think it should be lifted. However,
I think that making revisions at a slower rate. Ending the embargo too quickly can be
catastrophic for Cuba’s economy if they are not prepared for the influx of tourists and
currency. I think that the new policies should be implemented at a rate of, say 1 or 2 per year.
I predict that the the US will re tighten the travel ban, temporarily, in the near future. The
simultaneous lifting of this travel ban, alongside other policy revisions opening trade in the
country, has not given Cuba enough time to prepare for the amount of capital that will soon
flood the country. Their infrastructure is not yet strong enough to withhold a shock of those
proportions.
22. 22OUTDATED&UNTAPPED
Repeatedly in the US, we have seen urban cities and communities undergo a sudden
interest and modernization which involves an inflow of investment and leads to renovations, a
higher cost of living, and higher property values. This forces the urban and lower-income
individuals, families, and small businesses; who previously occupied the area, to leave, which
causes overpopulation and other problems for their next destination.
In conclusion, I believe that the most successful way for the US to enter Cuba is
through joint ventures. Recently, US hotel chains have been approved to expand to Cuba.
This, alongside the allowance of cruises and flights might just be too much for the county to
handle all at once. Joint ventures will allow local companies to build up their dwindling
revenues and establish a stronger presence in the market. Eventually, when the large
corporations do enter the country, there will be competition, which prevents the
monopolization of Cuban Industry by the US. Thus, reserving Cuban pride and independence,
the foundation of the Cuban image today.
23. 23OUTDATED&UNTAPPED
BIBLIOGRAPHY
Whitfield, Mimi. U.S.-Cuba relations: Plenty to work on in 2016 (Whitfield)
http://www.miamiherald.com/news/nation-
world/world/americas/cuba/article53901410.html#storylink=cpy
http://cuba-embargo.procon.org/ (ProCon)
NPR. Obama Eases Limits On Cuba Travel, Remittances
http://www.npr.org/templates/story/story.php?storyId=103030021 (NPR)
Council on Foreign Relations
http://www.cfr.org/cuba/us-cuba-relations/p11113 (CFR)
Video. Castro and the Cuban Revolution
http://www.history.com/topics/cold-war/fidel-castro/videos/castro-and-the-
cuban-revolution (History)
Coltman, Leycester. The Real Fidel Castro. New Haven and London: the Yale
University Press, 2003. (Coltman)
Print. Latin America in focus; CUBA. Ted A.Henken (Henken)
http://www.britannica.com/event/Cuban-Independence-Movement (Britannica)
http://www.investopedia.com/articles/investing/081514/socialist-economies-how-
china-cuba-and-north-korea-work.asp (Investopedia)
Library of Congress. A history of Cuba
http://www.nationsonline.org/oneworld/History/Cuba-history.htm (Nations)
