Unless Uncle Sam is content sitting idly as foreign banks shape the future of a nation only 90 miles from American soil, it’s time for the Obama administration to put down the Bacardi and lift the Cuban Embargo.
Since President Raúl Castro took the reins from his brother Fidel in 2008, the Cuban government has gradually loosened its grip on the island’s crumbling economy. The latest move toward reform came at the end of last month, when Cuba’s National Assembly passed a transformative foreign investment law aimed at boosting sluggish GDP growth.
Under the new legislation, the details of which will be officially released sometime in the next 90 days, investors will for the first time be able to fund projects entirely with foreign capital. The state will grant significant tax breaks to joint venture partners and make all sectors of the economy, excluding education and healthcare, open for business.
The law presents a major opportunity for investors to stake their claims in the country of 11 million. Already, Europe and Canada dominate the island’s tourism industry, and major infrastructure projects like the $900 million, Brazilian-financed Mariel port renovation are tempting China to expand its Caribbean influence.
But while the rest of the world prepares for the Western Hemisphere’s largest land grab in recent memory, American investors are stuck peering helplessly from Miami. In 2014, this self-imposed economic isolation is the extent of the Cuban Embargo’s effectiveness.
By failing to end sanctions against the Castro regime because of alleged human rights abuses, the Obama administration is missing the big picture: Capitalism has already won over Havana. The embargo accomplished its goal, and it’s senseless to justify extending the blockade for humanitarian reasons when American troops still occupy Guantanamo Bay and bipartisan fear of losing the Cuban-American community’s trust — and by extension Florida’s 29 electoral college votes — is so transparent.
Washington should use Cuba’s legislative reform as an excuse to slam the door in the face of guayabera-wearing lobbyists and put American businessmen on first-class flights to Havana. Castro’s island, in its most critical state since the collapse of the Soviet Union left it financially crippled in the early 90s, is ripe for their taking.
Today, the average age of the top Communist Party official is 70, GDP growth — projected to decrease from 2.7 to 2.2 percent this year — needs to hit 7 percent to foster stable job creation, and longtime economic crutch Venezuela is currently incapacitated by civil unrest. Out of this desperation, Cuba has thrown a $5-billion chunk of its economy on the open market.
While some major international companies — notably Canada’s mining giant Sherritt International and Spain’s Sol Melía hotel chain — have reaped early benefits from privatization, they’ve only scratched the surface of the island’s resources. Cuba still has so much to offer American investors, including its most valuable, and underutilized, asset: Cubans.
The public sector employs 80 percent of Cuba’s national workforce, comprising world-class doctors and educators responsible for Latin America’s highest life expectancy and literacy rate. Once Castroism completely disintegrates into the Caribbean, nations already invested in the country’s private sector will be first in line to access this invaluable human capital.
The United States simply can’t afford to undervalue such economic potential any longer. If the Obama administration is still so hellbent on uprooting communism, it needs recognize that allowing free trade between Cuba and United States is the best way to do it, and that action needs to be taken now.
The Castro regime will likely expire on its own before the turn of the next decade. The revolution will die, and accompanying its funeral will be a fire sale of all state-controlled assets. Without a foot in the door when that moment inevitably arrives, America will be shut out in the cold, and the likes of China, Brazil and Mexico will rebrand the island in their own image.
It’s crucial that both Republicans and Democrats understand that the pending implementation of Cuba’s new foreign investment law is their last chance to stamp the island’s reversion to capitalism with an American flag. But should they choose to ignore that opportunity and stand by five decades of failed policy, the Cuban Embargo will cement its legacy as the free pass Uncle Sam gave the rest of the world to run wild in his own backyard.