Foreign Investors Won't Liberate Cuba

Foreign Investors Won't Liberate Cuba
The billions already poured into the island have done nothing to advance
civil society.
By MARY ANASTASIA O'GRADY
June 1, 2014 6:24 p.m. ET

Attitudes toward the 52-year-old—though much-modified—U.S. embargo of
Cuba's military dictatorship have changed a lot in recent years. But not
always in the ways you might expect.

There was a time when it was not hard to find a Cuban dissident willing
to criticize the embargo. Today, a great many of the island's political
activists and human-rights advocates no longer believe that foreign
investment helps them in their struggle for liberation. They are asking
for more economic pressure on the regime from abroad, not less.

As Cuban political activist Antonio Rodiles told journalist Pablo Diaz
Espi for the Spanish website Diario de Cuba last month, "We need, first
and foremost, the re-establishment of basic rights and freedoms. The
international pressure, which includes the American embargo, is very
necessary to at least contain the impunity enjoyed by the totalitarian
regime."

Enlarge Image

U.S. Chamber of Commerce President and Chief Executive Officer Thomas
Donohue addresses the audience during a conference at the University of
Havana May 29, 2014. Reuters
This is worth noting, not the least because of new pressures on
President Obama to allow Americans to do more business in Cuba. Last
month one group—made up largely of lobbyists and former U.S. bureaucrats
and politicians who now make their living as consultants—sent a letter
to Mr. Obama asking him to unilaterally lift some restrictions on U.S.
investment and travel to Cuba.

The letter's signers say a change in U.S. policy "can help the Cuban
people determine their own destiny," strengthen civil society and
improve bilateral relations between the U.S. and the dictatorship. But
as Cubans are not allowed to freely engage in any business transaction
with a foreign entity, any new investment from the U.S. must go through
the Castro brothers and their friends.

The dissident community on the island and in exile responded to the
letter with indignation. "The embargo that must be eliminated is the one
which totalitarianism has imposed on the Cuban people," Cuban poet and
former political prisoner Raúl Rivero wrote in the Spanish daily El
Mundo. As to bilateral relations, once there is a democracy, "the issues
between both governments can be resolved diplomatically in 24 hours."

Cuba's Christian Liberation Movement, founded by the late Oswaldo Payá,
had this to say: "To support and applaud this logic of no-rights is an
act of complicity that infringes, precisely, against the potential birth
of a real 'civil society.' "

Advocates for economic liberty argue that the embargo unjustly restricts
American freedom: Investing abroad is central to free trade whether in
South Africa during apartheid or in Castro's Cuba. That's a defensible
libertarian argument. But it's a bad joke coming from signatories to the
letter like Andres Fanjul, whose family made a fortune from U.S. sugar
quotas or Venezuelan tycoon Gustavo Cisneros.

On a visit to Cuba last week Tom Donohue, the head of the U.S. Chamber
of Commerce, reportedly commended the regime for its recent efforts to
attract investment. That's a howler too.

For more than 20 years Castro has been inviting foreigners to run
hotels, mine for nickel, make cement and otherwise provide capital to
the island. Spaniards, Canadians, Brits, Swiss, Italians and Russians,
among others, have invested billions in partnership with the government.
Some of these investors have made use of confiscated American property.
Millions of Europeans and Latin Americans have made Cuba a tourist
destination. Hundreds of thousands of Americans now travel to the island
every year.

Yet Cubans are still tyrannized. Foreign employers pay the government in
hard currency, but the government pays the workforce slave wages in
nearly worthless local pesos. Foreign capital funneled to the despots
has only made life for ordinary Cubans worse because it has given Castro
an economic lifeline and more resources with which to repress the
population.

Cuban philosopher and former University of Havana Professor Alexis
Jardines argued in Diario de Cuba last week that focusing on Cuba's
economic problems plays into the hands of the thugs: "We shouldn't
forget that in state socialism, misery is artificially provoked."

It's true that Cuba is changing slowly, but that's being driven by
desperation not engagement. The Castros want to end the embargo not
because they are reforming but because they are not reforming. The
economy remains a train wreck. The regime can now buy all the food and
medicine it wants from the U.S., but under the embargo it has to pay
cash. Having defaulted on nearly $75 billion in loans from the rest of
the world, it has run out of willing state creditors.

Cubans now permitted to travel abroad bring merchandise from Miami,
reducing some of the privation on the island. But the regime knows well
that accumulating wealth means accumulating some control of one's own
destiny. That's why a foreigner caught paying an employee hard currency
can end up in jail.

It can be profitable doing business in a Caribbean country with one-man
rule. I get it. But the theory that a wave of foreign investment to Cuba
will swamp the totalitarian boat has been tested and failed. Let's not
pretend that cutting deals with plantation owners is about making Cubans
better off.

Write to O'Grady@wsj.com

Source: Mary O'Grady: Foreign Investors Won't Liberate Cuba - WSJ -
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