Reforms in Cuba 1959 to Present: Déjà vu all over again
Arguably the biggest surprise of 2013 has been recent negativity in the press regarding the goings on in Cuba. Each New Year (now at fifty-five) reliably brings out the parade of hypocrites calling for an unconditional end to the Cuban embargo, the erstwhile economic sanction for the confiscation of all private property in Cuba, or lauding how Cuba is “changing.” Apparently, the more Cuba changes, the more it remains the same.
The breaking news from Cuba asserts how, despite Raul Castro’s so-called “reforms,” Cuba’s private enterprises are doing poorly and “liberalization” and prosperity has not occurred. In fact, Raul was pulling back, warning entrepreneurs that the ruling oligarchy will not be pushed to change too fast. If this sounds familiar, it should. This has happened every decade in Cuba since 1959.
Nonetheless, as one pundit recently noted, that if one relied solely on the touting by the American press of reforms there since 1959, Cuba should now be a “tropical facsimile of Norway”.
Instead, Cuba is the only remaining dictatorship and totalitarian regime in the West. Two brothers, unelected, have ruled for fifty-five years. Dissent is brutally repressed and hundreds of thousands of Cubans have been killed. There is no independent press or rule of law. Racism is toxic. Cuba is a tropical North Korea.
These reports attribute the lack of cash in Cuba for the failure of these reforms. Cash is certainly problematic; the average Cuban receives about $20 per month in a worthless currency (and legal tender for Cubans). Foreigners and communist party elites exclusively use another currency. Ironically, the Cuban-exile community is a veritable Fed, sending $2.5 billion yearly to Cuba’s mostly white minority.
The significance is that all transactions in Cuba are cash only with no credit. There is no credit because there is no secure collateral and no secure collateral because there is no clear title to any property in Cuba.
Since 1959, all property has been stolen by the Cuban government from a Cuban or foreign entity. Some foreigners were paid as required by international law. However, the largest group of foreign claimants has never been compensated, the US owners.
More importantly, the Cubans have refused to compensate Cuban nationals, despite such provisions in the confiscatory decrees. These are the fortunate million who escaped and the unfortunate millions who remained, unable to leave.
Cubans were only recently permitted to “own” homes (not the land) and obsolete (Soviet) cars. Many homes were “redistributed,” so the threat of a property claim by another Cuban, especially a Cuban-American, remains real. Without clear title, there is no home equity.
Moreover, there are no protections to their so-called property rights: no contract sanctity, no independent judiciary and no transparent enforcement/regulatory agencies. The thriving culture of theft, fraud and corruption also prohibits lending.
Yet, Americans want to trade with this Cuba and traffic in stolen properties, including confiscated brands and trademarks, and the misery of Cubans. This already occurs to a large degree with the bogus “people to people” travel licensed through the US Treasury.
The hypocrisy of condemning theft here, but not Cuba is as obvious as it is disgraceful. We must stand for the rule of law, certainly if we want commerce with Cuba.
In a recent conversation, a Cuban entrepreneur whose car service business is flourishing rightly feared that when it no longer suited the Castros, his activity will be criminalized and assets seized. He’s become a “conservative” and is very concerned.
He should be. He has the same protections today as in 1959. Accurate journalism may help. For now, it’s déjà vu all over again.