The new normal; America and Cuba

The Economist

The loosening of the embargo will pay dividends far beyond Cuba

MARCO RUBIO, a prospective Republican candidate for the White House, called it "a victory for oppressive governments the world over". Only "the heinous Castro brothers, who have oppressed the Cuban people for decades" will benefit, thundered Jeb Bush, a likely rival, who is also based in Florida. The object of their fury: Barack Obama's startling decision to loosen America's 54-year-old embargo on Cuba.

Cuba's Communist government is indeed oppressive, while the Castro brothers can fairly be called heinous and will probably carry out all they can to maintain control. Raul Castro, who took over from Fidel in 2008, has said he will step down in 2018, but that is not a prelude to free elections. Nonetheless, easing the embargo is the right thing to do. The measures that Mr Obama and Mr Castro announced on December 17th--including a deal to restore diplomatic relations and the liberalisation of travel and remittances--will do much to normalise a relationship that has been trapped in the sterile logic of the cold war. But its significance goes beyond that. The embargo warps the United States' relations with other Latin American countries, as well as their relations with one another.

The Economist has long argued that the embargo is self-defeating. Rather than ending the Castros' rule, it has provided an evergreen excuse for their failures and so helped maintain them in power. The embargo kept Cuba out of international bodies such as the Organisation of American States, where other countries could have prodded the island towards greater openness. It put the United States at odds with most of its allies and nearly every other country in its hemisphere. It would be much better if the embargo were got rid of entirely, but its partial lifting is a step towards normality for the whole region.

So far most of the attention has been on Cuba. The Castros agreed to release 53 political prisoners (along with an aid worker and an American spy). Cubans will have more access to the internet, which should loosen the regime's weakening grip on information. As Cuba's relations thicken with the democratic giant next door, its citizens' demands for freedom may grow more insistent. There is no guarantee that such engagement will unseat the Castros, but the embargo has manifestly failed for half a century. It has only remained there because of the political clout of a dwindling number of elderly Cuban exiles in Florida (which also explains the outrage of the normally more sensible Messrs Bush and Rubio).

But the biggest prize should be the advance of democracy and open markets in Latin America. The Castros are not the only ones who will be discomfited by the loss of the American alibi. Venezuela leads a loose coalition of countries that uses defiance of the United States as an excuse for policies that stunt economic growth and democratic rights. It has long supported Cuba (and other Caribbean countries) with sales of oil at heavily subsidised prices. Even for robustly democratic countries like Brazil, the American bogeyman makes it easier to justify resistance to trade deals and to cosy up to uglier regimes.

Now this depressing narrative may change. Venezuela's government, reeling from the drop in oil prices, faces difficult parliamentary elections in 2015. Argentina's next president is likely to be less prickly towards the rest of the world than Cristina Fernandez de Kirchner, who will stand down in 2015. Colombia, an American ally, may end its 50-year war with the leftist FARC guerrillas if peace talks succeed. Dilma Rousseff could be a more pragmatic president in her second term (see page 29).

The scene is set for a new realism in Latin America. As commodity prices tumble and economic growth stalls, the region needs open markets, trade and regional co-operation--including with the yanquis to the north. With his move on Cuba, Mr Obama has opened the way for the sort of diplomatic engagement that Latin America rarely enjoyed during his first six years in office. But Latin America needs to return the compliment. The time for sulking and striking poses is over--in Brasilia and Caracas as well as Havana and Miami.

Source Citation:

"The new normal; America and Cuba."The Economist3 Jan. 2015: 11(US).Business Insights: Essentials. Web. 30 Aug. 2021.

Discussion Questions:

• What impact do the political systems of each country have on their efforts towards globalization?

• Can Cuba effectively become a free market economy?

• Will you US benefit from the recent lifting of embargoes on Cuba What impact did the embargo have on Cuba?

• What are Cuba's comparative advantages relative to US? and what are their comparative disadvantages?.