Communists. Trump. B&Bs: Richard Feinberg On Where Cuba And U.S. Ties Headed

Nov 21, 2016

Next month marks the second anniversary of normalized relations between the U.S. and Cuba – and things couldn’t look more uncertain. President-elect Donald Trump has pledged to cancel normalization unless Cuba delivers more democratic reform. But even before Trump’s election, Cuba seemed to be closing rather than opening the door to U.S. business.

Richard Feinberg’s new book is “Open For Business: Building the New Cuban Economy ” (Brookings Institution Press, 2016), and it brings some clarity to that murky Cuba picture.

Feinberg is an economics professor at the University of California-San Diego and a former White House director of inter-American affairs, as well as a Brookings Institution fellow. He presented “Open For Business” at the Miami Book Fair International last weekend. (The fair ended Sunday). And he spoke with WLRN’s Tim Padgett about where he thinks Cuba – and U.S.-Cuba economic ties – are headed.

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Excerpts:

The book opens with you in Havana on December 17, 2014, the day President Obama and Cuban President Raúl Castro re-established relations. You describe stunned Cubans acting almost euphorically.

I happened to be at a large conference, sponsored by the Foreign Ministry of Cuba, watching the announcements on a big screen. And the Cubans were so spontaneously excited. Tears were streaming down the cheeks of many of them. They saw hostile relations with the U.S. as a roadblock for them to move ahead economically. And some of the young diplomats turned to me and said, “Now we see for the first time some sunlight.”

If you could have been in Havana on November 9, when Trump was elected President, what kind of mood would you have seen then?

I think, actually, some people in the [Cuban] Communist Party are pleased. They hope that the U.S. will revert back to the old tough Cuba policy so that they have an excuse to clamp down and reassert, “We the Communist Party must remain in charge because there’s an external threat from the U.S. On the other hand, people involved in private sector activities, and people who are hoping to open things up on the island, I think are now anxious.

Cuba's private bed-and-breakfast sector now accounts for at least one quarter of all beds available for international tourists in Cuba. So to cut back on U.S. travel to Cuba would be a very serious blow. –Richard Feinberg

One thing I really liked about this book is how well it explains why Cuba so often seems to act against its own economic interests. You say in the past quarter century Cuba has let in only a few billion dollars of foreign investment – while another socialist country, Vietnam, has raked in more than $80 billion. Why is that so important for Americans to understand?

Well, what you see is a government that puts national security over and above economic progress. Some of them still think dealing with foreign firms is an infringement on Cuban sovereignty. They’re also afraid this is a wedge the U.S. will use to undermine the regime. And then there’s simply bureaucratic obstacles. The Cuban regime has really tied itself in knots. Decision-making is extraordinarily slow.

In the long run there is no doubt in mind that Cuba will open up to foreign investment. They desperately need it; it’s their only way to move forward.

Raúl Castro has announced he will step down from the presidency in early 2018. Much of the government will be inherited by the next generation. One reason for thinking they might accelerate reform is [that] they have to produce economic growth if they’re going to generate legitimacy. And where’s the economic growth going to come from? From the emerging domestic private sector – and from definitively welcoming foreign investment.

MILLENNIALS MATTER

So do you feel it would be counter-productive to U.S. interests for the Trump administration to pull back on Cuba’s new independent entrepreneurs, or cuentapropistas?

One of the major reforms by the Obama Administration was to allow more Americans to travel to Cuba under various categories. That is a major source of an expanded consumer base for the Cuban private sector. The private bed-and-breakfast sector now accounts for at least one quarter of all beds available for international tourists in Cuba, and that ratio will rise. So to cut back on travel to Cuba would be a very serious blow.

The book ends by profiling a dozen young millennial Cubans. They all back U.S.-Cuba normalization. So how profoundly do you see them changing Cuba?

I was impressed by a lot of them, actually. [In particular] two journalists, two women, one of whom, [news anchor Cristina Escobar], works for state TV. Everybody in Havana knows her. When I was walking with her in a restaurant she was totally famous. But also a blogger, [Elaine Diaz, who just finished a fellowship at Harvard], someone who would define herself as independent.

I see both of them as interested in seeing journalism functioning as a way to give voices to the people – and be a watchdog over government activity as well.