At least once a week I receive a phone call about the future of Cuba. Usually prompted by a news story, most callers are folks interested in visiting or investing in Cuba someday. When will it open up? Can we invest there today? Does it matter if Fidel or Raul are out of the picture? It goes on and on. Most of these inquiries can be answered with a simple, who knows. I do not think that the Cuban government has any idea either.
Cuba has been a communist country for fifty four years and it has been under the control of the same two people. Fidel and Raul, as well as those who support them, are focused on political survival as well as preservation of socialist system. Why? Because to these people there is no turning back. Read your Karl Marx, Lenin, or Mao. Socialism is an evolution away from capitalism. After socialism, well, comes communism.
The regime and its supporters are in it for the long haul. They have no interest in free markets because it would be viewed as a failure, several steps backwards. I’m going to say something here that may upset fellow Cuban-Americans, however, Cuba has been struggling with this issue of the role of the state in society since at least before the start of World War II.
The 1940 Cuban Constitution, much touted by certain sectors of the diaspora, may have served its purpose then, but it laid the seeds for people like the Castro brothers by introducing the principle of “collective rights” in Cuban society. This document contained many left of center ideas such as the creation of a national health care system. One of the reasons Castro literally walked into Havana in 1959 was because he promised to reinstate the 1940 constitution. Collectivism has been part of the Cuban mindset for some time and it is not going to be easy to break, at least not in my lifetime.
So what does this all mean for the U.S. and future investors?
CNBC’s Michelle Caruso-Cabrera was in Cuba earlier this month and filed a series of interesting stories that are well worth a look. Caruso-Cabrera has been in Cuba numerous times during the past few years and has filed some fascinating stories most, in a way only she knows how to do, critical of the regime. And she was invited back recently to focus on the so called economic reforms that Raul Castro has been implementing. Here is one of the reports:
There is no way the Cuba will emerge from their self-imposed economic crisis without foreign investment. Yet this is not Vietnam or China. Cuba does not have, and will not have in the future, enough of a manufacturing base that will allow the regime to exploit its people the type of foreign investment the national needs to get out of this economic morass. Cuba will have no choice to someday liberalize economically and politically than a lot more than its current leaders are willing to go. They have no idea what they are doing and the U.S. has no business teaching them. Let them trip over themselves. It will help rank and file Cubans over the long term.
Ordinary Cubans want U.S. investment and commerce because they think it will help alleviate the tough times; however, this will never happen so long as central planning and socialism remain the aims of the government. And this can never be Vietnam or China — ordinary Cubans are too smart for that. They are tired of being treated like chattel by the state. Moreover, pro-freedom, wealthy, and entrepreneur-minded exile community will see to it that Cuba’s “collectivist” past is slowly replaced by free market ideas.
An island just 90 miles from U.S. shores, I’ve been saying for years that the regime will lose control of this piecemeal reform process. And while this may sounds somewhat illogical, now more than ever, the U.S. should clamp down and enforce economic sanctions. The pro-regime supporters are dwindling. They are stealing money and treasures from Cuba. They are the past and must be held to account, no matter where they may be, for the crimes on the Cuban people. Send a message to the new generation of leaders, whoever they may be, and empower folks who want to break with Cuba’s collectivist past