Cuba’s new foreign investor law affords more rights to foreign investors than it does its own people. It is reform in name only. The Communist Party, run by losers, knows well that it must secure embargo-easing concessions from the United States to make it work. Substantive changes to U.S. laws are not going to happen anytime soon. The best the Obama national security team could do is tinker with the regulations, but that will not be enough.
I’ve only read summaries and talking points of the proposed
law decree; however, there is not much there there. There will be no private property rights in Cuba. There is no rule of law or court system capable of dealing with commercial disputes. Factor in the rest of Cuba’s decrepit economic and political system, and no serious foreign investor would risk significant sums of money on what amounts to a fire sale.
This foreign investor decree also presents a few policy issues for the Obama Administration and the U.S. Congress. U.S. companies are not allowed to invest in Cuba – nor should they be under current circumstances. However, you can bet that current exporters of food, medicine, medical supplies, and telecommunications equipment will want to change U.S. law to allow it. Even at a small scale, this must not be allowed unless Cuba complies with Helms-Burton.
Then there are the family remittances, those funds sent by Americans and other U.S. persons to support family members on the island. The meaning of “support to the Cuban people” under the current legal and regulatory system will be challenged. The regime already abuses the remittance system as a way to launder money and “invest” on the island. When does help for the Cuban people become support for the regime? This new Cuban foreign investor decree is going to test the limits and the U.S. should focus cracking down on remittance abuse.
Why this foreign investor decree now? Because the regime is concerned about the U.S. Congressional mid-term elections and the very real prospect that Republicans will win control of the Senate. They keep losing supporters in both parties and what is coming is not good for them. Cuba is not interested in reform or freedom, it is in survival mode. The Communist Party wants a political war, especially with Cuban exiles and other opponents of the regime. Let’s hope the Cuban regime has not found an ally in the Obama Administration.