Turning a blind eye to Castro’s Cuba – the hypocrisy of the Latin American left

10 Apr

Honduras' President Zelaya poses with his Cuban counterpart Castro and Venezuelan counterpart Chavez in Managua
“Birds of a feather flock together.”

– Arab proverb

A curious thing is happening in Panama in the Summit of the Americas. Before the announcement of the restoration of ties between Cuba and the United States the 7th Summit of the Americas was supposed to be just another annual meeting of leaders from the Western Hemisphere. But what sets this Summit apart from the others is the recent political rapprochement between the United States and Cuba. Talk of a historic face-to-face meeting between General Raul Castro and President Barack Obama have dominated the news surrounding the event.

Attending the event however, are also a number of Cuban democrats who seek to voice their wishes for democracy in Cuba. Most prominent among them are Eliécer Ávila and Rosa Maria Payá – two outspoken and passionate young Cuban democrats who are fighting to bring change to the island. Rosa Maria Payá is the daughter of Oswaldo Payá – the famous Cuban democratic opposition leader who was assassinated by agents of Cuba’s secret police. The late Oswaldo Paya is best known for starting the Varela Project – a movement that sought to request a plebiscite allowing for free elections in Cuba. Rosa Maria Payá was in attendance at the Summit to present her new project Cuba Decide (Cuba Decides, hashtag #CubaDecide) – a plan that also calls for a plebescite that will allow Cubans to freely elect their leaders.

But on their arrival to Panama Cuban democrats (including Payá and other prominent leaders) were repeatedly questioned, detained and harassed by Panamanian authorities. Outside of the Summit, Cuban democrats have also been repeatedly attacked by mobs of Cuban agents disguised in plain clothes. Many of these agents in disguise have been sent from the Cuban embassy on orders to disrupt any demonstrations or activities organized by Cuban democrats attending the Summit. Their goal is to silence and disrupt any conversations regarding the issue of human rights and democracy in the island. And the worse thing about it? The Panamanian authorities have responded, not by arresting the regime’s paid thugs – but by arresting peaceful Cuban activists. The same ones who were attacked.

A number of these incidents have been documented by the local and international press in Panama but the agents of the regime have gone unpunished.

What explains the impunity with which the Cuban regime is allowed to operate with in Panama? A simple change of administrations in Panama seems to be the answer. After the end of President Ricardo Martinelli’s term in Panama, a new presidential administration came to power in Panama. The new administration apparently is content with keeping a low profile. Panama, which under the previous centrist and moderate Martinelli administration, was a staunch advocate of human rights and an opponent of dictatorship in Latin America, now seems content to turn a blind eye to abuses perpetuated by the Cuban regime.

Which brings to light one of the major hypocrisies of the Latin American Left – a topic I addressed in my first post in Aristocracia – the refusal of leftist democratic governments to recognize abuses by authoritarian leftist regimes like Castro’s in Cuba or Nicolas Maduro in Venezuela. In 2009, when the Honduran military deposed President Manuel Zelaya, most of these Latin American governments were quick to respond and denounced the coup as an affront to democracy. Similarly, when leftist leader Fernando Lugo was impeached and removed from power by the Paraguayan Congress in 2008 – leftist Latin American governments responded with outrage and labeled the impeachment and removal a “parliamentary coup” – even though the impeachment proceedings were completely legal under the Constitution.

Yet these same governments are happy to idly by when abuses are carried out by leftist regimes in Cuba and Venezuela. They remain silent when the Cuban regime imprisons and murders opposition leaders in the island and harass democratic activists abroad. And they remain silent when the chavista government in Venezuela blatantly abuses the Constitution and imprisons major opposition leaders like Leopoldo Lopez and Antonio Ledezma. The truth is that the Latin American left is morally bankrupt. Because when it comes to abuses perpetrated by their friends on the Left – leftist governments hear no evil and see no evil.

Latin American governments need to stop their anti-American rhetoric when they are not even willing to stand up for their own. If you are going to advocate for democracy – you must do so consistently.

Predicting what will happen in Venezuela

24 Feb

Venezuela 2015

The recent arrest of Caracas mayor Antonio Ledezma without judicial warrant on orders of President Nicolas Maduro has thrown into question the whole idea that Venezuela might even hold elections this coming December. As Nicolas Maduro’s popularity drops further and further (it is currently somewhere in the low 20s) and the country’s economy sinks to ever-lower depths, the regime is becoming increasingly desperate to hold on to power. The jailing of Ledezma can be seen as a shift in the government’s tactics to hold on to power. Whereas Chavismo was previously content with winning elections, the current deadly mixture of high inflation, low gas prices and severe shortages of goods has brought the country to its knees and forced the regime to rethink how it intends to keep the PSUV (the populist-socialist party founded by Chavez) in power.

Given the regime’s proven track record of resorting to arrest of major opposition figures, like Leopoldo Lopez and Antonio Ledezma, as well as its willingness to use violence force to suppress street demonstrations by unarmed citizens (like it did February 2014) – many are beginning to believe that Maduro and the chavistas intend to hold on to power by any means. Furthermore, given the regime’s ideological proximity and alliance with Cuba’s totalitarian Castro brothers, some are beginning to question whether the chavistas are going to finally “cross the Rubicon” and do the unthinkable.

With Maduro’s popularity at record lows and faced with the prospect of a catastrophic defeat in the December elections (it would also be Chavismo’s first electoral defeat ever) it seems that Chavismo has only a few alternatives for holding on to power. Holding a fair election in which opposition parties are allowed to participate without harassment is unthinkable, as it would open the possibility that the coalition of opposition parties (known as the “Mesa de la Unidad Democrática” or “MUD”) will sweep the elections. An electoral defeat in the legislative elections would open Maduro to a vote of no confidence, which would then trigger an early referendum election. Given his extremely low approval ratings he would likely then be routed in a recall election.

Worse still is that a large defeat would mean that the PSUV would lose a disproportionate amount of seats and possibly be relegated to irrelevancy. After the PSUV won an almost absolute majority in 2005 (an election boycotted by the opposition), it moved to rework the electoral rules to reward winners of legislative elections with disproportionate majorities. This explains why after in the 2010 election the opposition was only awarded 64 seats out of 165, even though the opposition won 47% of the vote. For comparison the PSUV was awarded 98 seats – a disproportionate amount that did not reflect the closeness of the election.

But now the shoe is on the other foot and the the electoral rules passed by the PSUV look more and more like a double-edged sword. With the way things currently stand, it looks like Maduro’s party stands to lose… and lose big. According to some estimates, if the election were held today, the regime would stand to lose its majority and be relegated to controlling somewhere between 35 and 55 seats out of 165 – a potentially humbling and embarrassing result for the chavistas – who have never lost an election.

Faced with these prospects, there are only a handful of possible major scenarios that could unfold.

Scenario One: A somewhat fair election is held with some vote rigging (15% chance of occurring)

As mentioned earlier, this scenario would be political suicide for the chavistas. In this scenario, the chavistas allow the opposition’s major leaders (like Maria Corina Machado, Henrique Capriles, and others) to campaign and lead the efforts to defeat the PSUV. But as things currently stand, an election in December would lead to a major rout of the PSUV on election day. The PSUV’s majority would likely be slashed to an insignificant 35-55 seats – a scenario that would leave Maduro open to impeachment and a vote of no confidence. This vote would then trigger a snap election which is likely to end poorly for the chavistas. Even if the government engages in large scale vote rigging, it will likely be impossible to reverse the tide of votes against the PSUV.

A lot is at stake for many in the PSUV – as many high ranking officials in the government have been accused of corruption and drug trafficking. Losing the elections in December would mean that the hour of reckoning has finally arrived. Don’t expect the heirs of Chavez to concede defeat so easily.

Scenario two: Maduro will declare a state of emergency and cancel the elections (50% chance of occurring)

Given Maduro’s rhetoric about the supposed “economic warfare” being waged against Venezuela by the United States, and the recently announced foiling of an alleged coup attempt (all claims which have been widely questioned and poorly supported) it wouldn’t be at all surprising if the regime simply opts for cancelling elections altogether. There would be precedent for this given that Chavez already once called on the National Assembly for emergency powers and that the chavistas have been known to bend the rules or simply ignore the constitution when they see fit.

Scenario three: Allow the election, but jail the opposition’s main leaders before the election (35% chance of occurring)

This scenario is likely given the regime’s willingness to use jail to intimidate and neutralize opposition figures. Leopoldo Lopez, one of the opposition’s main figures, just recently completed one year in jail after leading street protests calling for Maduro’s resignation last February. Caracas mayor Antonio Ledezma was recently jailed and other major opposition figures like Maria Corina Machado and former presidential candidate Henrique Capriles have been threatened with arrest. By jailing major opposition figures on trumped-up charges of corruption or alleged plans to carry out a coup d’etat – Maduro will try to eliminate major figures in the opposition as a way of weakening it before the election and, at the same time, give him the save some face before the international community. The chavistas have been known to make wild accusations of treason and corruption to eliminate political opponents and this would not be anything out of the ordinary.

What is most likely to happen is that the regime will likely resort to a mixture of strategies. As the election draws closer, the regime will probably attempt to land some of its major opponents in jail in a desperate bid to cripple the opposition. If the situation does not improve, it will then move to the second option, which will be to simply cancel the elections by declaring a state of emergency. Holding a fair election is simply political suicide for the PSUV and its leaders.

Both strategies are risky… But then again, things aren’t looking very good for Chavez’s party overall. Resorting to either one would destroy the chavistas carefully-crafted mythos of being a truly democratic people’s movement and would quickly delegitimize Maduro’s already unpopular government.

Is Maduro willing to cross the Rubicon and go where Chavez did not?

Start placing your bets…

Capitalism or death

31 Dec

NGS Picture ID:740785

The recent news of Barack Obama’s decision to re-open diplomatic relations with Cuba came as a shock to many across the world. And while observers and experts celebrated the reestablishment of relations as a positive change from the half-century-old policy of isolating Cuba, it was less clear what the Cuban government’s intentions were in suddenly embracing its old adversary.

It’s no secret that the Castro brothers’ government has used the economic embargo as a scapegoat for everything that goes wrong in Cuba. From the denial of personal liberties, to the shortage of basic goods, the Cuban government has made it a de facto official state policy to blame all of its problems on the United States and its embargo.

Every totalitarian state needs an enemy to underpin its ideology of constant warfare. Totalitarianism thrives off of conflict and division. After all, there can be no David if there is no Goliath. And the United States had been the ever-present “Goliath” that had justified all of the Castro brothers’ repression. Having a constant enemy allowed the Cuban government to run the island like a military camp – constantly under siege.

So why would the Cuban regime voluntarily choose to begin a process of rapprochement with the United States?

The answer is simple.

Ever since the Fidel Castro nationalized the Cuban economy in the 1960s and established a centrally planned economy, Cuba has been dependent on foreign benefactors to keep it afloat. Cuba, once the world’s largest exporter of sugar, became an economically impoverished country almost overnight when Castro’s government began to exercise its control over the economy in the 1960s.

Cuba survived throughout most of the Cold War thanks to the beneficence of the USSR, which subsidized Cuba to the tune of millions of dollars every year in economic and military aid. Although Castro established a firm iron grip on power in the island, he never truly managed to make Cuba self-sufficient economically. When the USSR finally collapsed under its own weight in 1991, the end of economic subsidies to the island precipitated a crisis known in Cuba as the “Special Period,” which lasted for roughly a decade. The country’s estimated Gross Domestic Product per capita came down by 36% between 1989 and 1993.

cuba-gdp-per-capita-constant-2005-us-value_chartbuilder

Cuba GDP per capita (Source: Quartz and World Bank)

Cuba was at the brink of collapse when suddenly in 1998, Hugo Chavez came to power in Venezuela. Chavez, a fellow socialist and self-proclaimed follower of Fidel Castro and his ideology, came to the rescue by providing Cuba with an economic lifeline. The precise amount that Venezuela transferred to Cuba through the years is not currently known. According to Carmelo Mesa, a distinguished professor at the University of Pittsburgh, during the oil booming years Venezuela provided up to US $9.4 billion per year to close the gap in Cuba’s accounts.

But as the years passed and Chavez’ socialist revolution strengthened its grip on the Venezuelan economy, Venezuela fell into its own economic crisis. As Chavez squeezed the Venezuelan private sector, its economy became more and more dependent on oil exports, as other sectors disappeared or where squeezed out by draconian regulations. By the time Nicolas Maduro came to power after Chavez’ death, Venezuela’s economy was nearly completely dependent on oil exports – oil accounting for 96% of the country’s exports.

And that’s when the oil-boom ended. The combination of Chavez and Maduro’s mismanagement of the Venezuelan economy, the astronomical inflation pushing 63%, and the sudden and precipitous drop in oil prices caused the Chavistas’ socialist government’s bottom to be pulled out from under it.

The first to be affected was Cuba – the largest benefactor of Venezuela’s oil largesse. Cuba’s leaders, realizing that Venezuela was well on its way to an economic disaster, and aware that they could no longer survive embraced the inevitable and humiliating proposition of selling out to the United States. And end to Venezuela’s economic aid would precipitate another economic crisis in Cuba and once again push the regime to the brink.

With no new USSR or Hugo Chavez to save them, the Castro brothers had to do the unthinkable – reconcile with the United States or face the imminent collapse of their government. The Cuban regime is in a precarious situation. For the first time in its entire history it no longer has a reliant benefactor from which to survive from. And don’t expect the Americans to take over that role.

Capitalism or death.

Una pelea cubana contra los demonios (A Cuban Fight Against Demons)

15 Oct
Francisco de Goya, The Inquisition Tribunal

Francisco de Goya, The Inquisition Tribunal

“I worry that, especially as the Millennium edges nearer, pseudoscience and superstition will seem year by year more tempting, the siren song of unreason more sonorous and attractive. Where have we heard it before? Whenever our ethnic or national prejudices are aroused, in times of scarcity, during challenges to national self-esteem or nerve, when we agonize about our diminished cosmic place and purpose, or when fanaticism is bubbling up around us – then, habits of thought familiar from ages past reach for the controls.

The candle flame gutters. Its little pool of light trembles. Darkness gathers. The demons begin to stir.”

– Carl Sagan

Set against the backdrop of 17th-century colonial Cuba, the dark and riveting film Una pelea cubana contra los demonios or “A Cuban Fight Against Demons” (1972), tells the story of the inhabitants of San Juan de Los Remedios, one of the original Spanish settlements established on the island. The film, which is directed by one of Cuba’s most revered filmmakers, Tomás Gutiérrez Alea, deals with one of the most interesting and schizophrenic events in Cuba’s history. Plagued by pirate attacks and a local priest who is convinced that the town of Remedios is possessed by demons, a number of families pack up and abandon the seaside town for less favorable and isolated location in the interior of the island.

The events portrayed in the film take place in the village of San Juan del Cayo de los Remedios, located on the coast of Cuba’s north central region. Due to its location, the town of Remedios was a center for illegal trade with foreigners. At the time, the Spanish crown had a restrictive and backward mercantilist policy forbidding its colonies from trading with non-Catholic Europeans. French Huguenots and Englishmen were considered heretics by the Roman Catholic Church and engaging in commerce with them was considered a sin. But ignoring the directives of the Spanish crown and the Catholic Church, the inhabitants of the town disregarded the prohibitions on trade with foreigners and carried on anyways. Although the illicit and clandestine trade was an affront to the doctrine of the Church, the inhabitants of Remedios didn’t seem to mind – they were growing rich. Occasionally, due to the illicit nature of the commercial activity and the inability of resorting to local courts, disputes often escalated to violence and the town was repeatedly attacked by pirates when differences arose between local smugglers centered in the town and their illicit French and English business partners.

It was in this context that Catholic priest and Commissioner of the Holy Office of the Inquisition, José González de la Cruz (portrayed as Father Manuel in the film) arrived in Remedios from Havana sometime around 1657. Fearful of the spread of heretical ideas from exposure to outsiders, Father González almost immediately began a spirited and messianic campaign against locals suspected of dealing with heretics and even advocated for the relocation of the town and its inhabitants to another location closer to the interior of the island. In a report to the Spanish authorities in Havana, Father González even claimed that he had exorcised 800,000 demons in the small town of 613 inhabitants between 1657 and 1659. Father González was convinced that contact with heretics was slowly degrading the moral and spiritual fiber of the inhabitants of Remedios.

In the film, the town leaders are skeptical of abandoning the seaside location of the town with its access to the sea in exchange for the isolated and barren inland location suggested by Father González. But ultimately, through a mixture of fear-mongering and messianic determination, Father González was successful in convincing the inhabitants of Remedios of their impending existential and spiritual doom if they did not immediately abandon the demon-haunted town and the illicit trade with heretics that had made them so prosperous. Gripped by religious hysteria and trapped in an atmosphere of guilt and religious ignorance, a large contingent of the town’s inhabitants finally decided to abandon the demon-haunted town for another location in the interior of the island and began an exodus in 1689.

They would go on to found the village of Santa Clara, today Cuba’s fifth largest city.

Although the film was intended to tell the true story of the events that led to the abandonment of the town of Remedios in 1689, it also serves as a wider metaphor for the demons that have haunted Cuban society since the founding of the first colonial settlements by Europeans in the 16th century. Similar in nature to the craze that gripped the town of Salem in New England – the story of what occurred in the town of Remedios in late 17th century serves as a metaphor for the demons that plague modern Cuba – messianic ideology, totalitarianism, isolationist economic policies and an atmosphere of fear.

Although Cuba gained its independence from Spain in 1898 and experience a long and prosperous revival from 1902 to 1952 during the years of its democracy, the island is once again under the grip of a religious-totalitarian ideology, a mercantilist-Stalinist economic policy, and a culture of fear that has served to isolate Cuba from the world. Where Cuba had Catholicism in the 17th century to inspire guilt and feelings of spiritual doom, today it has Communism and a state-directed war against individuals who seek individual personal achievement and the creation of wealth. Where illicit trade with foreigners in the 17th century was prohibited by mercantilist Spanish policies, today it is curtailed by a Stalinist-style centralized economy and its prohibitions against almost all forms of independent and private commercial activity. Where 17th century Cuba had a Catholic doctrine that created an all-encompassing everyday reality that revolved around the theme of God against Satan, today it has Communism – with its all-encompassing ideology that frames everything around the duality of Communism versus Capitalism, of Rich versus Poor, America (Satan) against Cuba (Good).

Cuba remains an island gripped by fear of demons. It remains an island gripped by an obsession with the memory of its paranoid and fearful past. In the end, we have replaced one set of demons for another. One type of religious fundamentalism and ignorance with another. One false savior for another.

13 Points: A Socio-Economic Plan for Reform in Cuba

21 Sep
Havana at night.

Havana at night.

One of the hottest topics of conversation about Cuba seems to be the series of “reforms” implemented in the last couple of years by Fidel Castro’s younger brother Raul Castro. From allowing Cubans to finally buy and sell cars, to allowing them to work independent of the state in one of 181 different occupations allowed by the government, there is a general sense that things are “changing” on the island. But just how far have these reforms gone? Is Cuba really making an effort to liberalize its economy and allow for greater freedoms?

It wasn’t long ago that Cuba’s government recently approved its new Foreign Investment Law, but already the verdict seems to be out: Cuba has struggled to attract investment despite reforms. And despite bold predictions of growth by the government – the island managed only a mere 0.6% growth in the first half of 2014 – far below official estimates. The Heritage Foundation, alongside The Wall Street Journal recently released its Index of Economic Freedom, which ranks countries around the world based on a series of factors. Despite recent reforms, Cuba ranks 177th out of 178 countries. Only North Korea had more restrictions on economic activity.

So why exactly is Cuba struggling so mightily to stimulate its economy and spur growth?

Aside from the realities of the American embargo on trade with the island, Cubans refer to something known colloquially in Cuba as the internal embargo. The internal embargo refers to the government’s draconian control of its own economy and its stringent Soviet-style restrictions on personal freedom. Interestingly enough, despite the embargo the United States is still Cuba’s fifth largest trading partner. The truth is that the Communist government’s restrictions on economic and business activity would work to hinder economic activity even if the embargo didn’t exist.

So aside from the embargo, what can Cuba do if it was serious about reform? In a recent article, Cuban economist Pedro Campos listed a number of economic reforms that the state could undertake to truly put Cuba squarely on the path to prosperity. But I believe that we can go even farther.

Here, a socio-economic program for true reform in Cuba:

Economic Reforms

1. Removal of internal restrictions on the movement of people and goods within Cuba. As things currently stand, people within Cuba are not allowed to freely trade goods and products from one province to another. These restrictions distort prices and increase costs for average citizens. A coffee grower in the mountains of Eastern Cuba should be able to sell his product in the streets of Havana.

2. Removal of draconian import and export restrictions and tariffs. The state currently holds a monopoly on foreign trade in the island and Cubans who want to start their own businesses are prohibited from freely buying and selling goods with buyers and sellers outside the country. This increases costs, contributes to scarcity of goods, and restricts economic growth.

3. Removal of all restrictions on Cubans’ ability to work privately and to form their own businesses independent of the state. As it stands, the Cuban government has a very limited list of 181 professions of which Cubans are allowed to work in. This list includes such antiquated (and almost 18th-century-like) and limited professions as “shoe cleaner” and “plumber.” Doctors, lawyers, architects, engineers, technicians and other ordinary citizens should be able to freely contract their work and services.

4. Allow for the creation of business associations such as corporations and sociedades anonimas by ordinary Cubans. These entities would have the power to raise capital, form contracts, begin projects, own property, and have limited liability for their owners and associates. As things currently stand, ordinary Cubans are only allowed to work independent of the state if they obtain “licenses.” Only the state is allowed to own and operate business enterprises. Cubans with licenses to work independently are not independent private sole-proprietorships in the true sense of the word – they are legally merely independent contractors working for the state. These licenses do not grant their owners the same rights that they would have as owners and managers of independent business associations such as would be the case with a corporations or other privately-owned business associations.

5. Removal of restrictions on foreign investment. Cuba’s new Foreign Investment Law released a few months ago, although a step in the right direction, does nothing to help capital reach the hands of ordinary Cubans. Foreign investment is only allowed in state-owned enterprises. Investment, loans, and capital transfers to ordinary Cuban citizens is not allowed. A ordinary Cuban launching his own business is not allowed a business loan from his relatives in Madrid or Miami.

6. Removal of restrictions on the accumulation of wealth and property and an easement of restrictions on the sale and alienation of property. Stringent and rigid rules prohibit the accumulation of wealth and property by ordinary Cubans on the island. These artificial and unnecessary restrictions limit the participation of ordinary citizens in any sort of meaningful economic activity. Cubans before 1959 could freely sell and transfer property. Why can’t Cubans in 2014? The free transferability of property is one of the basic tenets of a truly free economy and should be a basic right open to all Cubans.

7. A reduction of the extremely high tax rate on individual business activity. One of the least spoken about aspects of the government’s recent reforms has been how the high tax burden (sometimes as high as 50% for some businesses) has led many independent businesses to close down. With such a high tax burden, barriers to entry into the economy remain high for the ordinary Cuban citizen. Those with access to remittances (and thus dollars) from abroad have an unequal advantage.

8. Elimination of the double currency. Cuba is one of the few (if not the only) countries in the world with a double currency. Tourists, travelers, and foreigners who do business in Cuba all do business with the Convertible peso, a currency that is pegged to the dollar. Ordinary Cubans are paid in the National Peso, a currency that is on average twenty five times less valuable than the convertible peso. As things currently stand, the double currency creates a country of haves and have-nots – those (such as those who work in the tourism business, prostitutes, and those who receive remittances) who have access to dollars and convertible pesos – and everyone else.

Socio-Civic Reforms

1. Freedom of expression. It is no secret that economic and personal freedoms go hand-in-hand. Cubans who wish to conduct business, or advertise their business, or criticize government inefficiency, corruption or policy should be able to voice their opinion freely without being subject to police harassment, arbitrary detention, jail time, or exile (or worse).

2. Freedom of the press. The facilitation of communication between citizens should not be a monopoly of the state. Currently, all forms of media – television, newspapers and radio are in the hands of the state. Cubans should be able to form their own independent newspapers and mediums of communication. This facilitates commercial advertising, national dialogue, and promotes the creation of a healthy and well-informed body politic.

3. Separation of powers. The devolution of powers from the highly centralized government to municipalities and provinces and the separation of powers between the executive, legislative and judicial branches of government are essential if Cuba ever hopes to truly create a society that is based on the rule of law. Cuba’s Communist 1976 Constitution concentrates most of its power in the hands of a few decision-makers at the very top.

4. The removal of the ban against political parties that are not the Communist Party of Cuba. The motto of the Cuban Revolution is “Everything within the Revolution, nothing outside of it.” A truly free and plural society has many voices. These voices are sometimes directly at odds with each other. There are workers, there are peasants, there are capitalists, there are merchants, there are entrepreneurs, there are social activists, there are communists, there are anarchists, there are conservatives and there are liberals – free societies are a complex agglomeration of different people – all trying to speak at once. Our government should be a reflection of the will of an entire nation – not of one single political party.

5. The removal of restrictions on access to the Internet. The Cuban government currently restricts its citizens’ access to the internet. The Internet, perhaps one of the greatest tools for communication, commerce, and dialogue in the history of humankind, is something that only 2% of Cubans have access to. Access is generally limited to those with connections in the government or those who have familial or outside connections with friends or relatives abroad. Even then, access is restricted to a limited state-controlled intranet. It’s about time that Cuba join the modern world.

These and a whole series of other reforms are just some examples of basic reforms that the Cuban government could undertake if it were truly interested in starting the path towards increased prosperity. The path to economic growth and increased personal freedoms is not a secret one.

Until then, the “reforms” were are seeing in Cuba are only cosmetic half-hearted attempts to appease and maintain control. If Raul Castro and his Politburo really want change to arrive in Cuba, they know where to begin.

Until then, you should remain skeptical about talk of “reform” in the island.

Dollars, dollars and more dollars

26 Jul

Havana Then and Now

[On the left, Cuba during its capitalist years, and on the right, under communism]

 “If you ask me to name the proudest distinction of Americans, I would choose–because it contains all the others–the fact that they were the people who created the phrase ‘to make money.’ No other language or nation had ever used these words before; men had always thought of wealth as a static quantity–to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.”

– Ayn Rand

One of the things about Cuba that fascinates foreigners and travelers the most is the island’s large collection of old and antique American cars.  The association between Cuba and old cars is so strong that you are hard-pressed to find pictures of the island before eventually running into a picture of an old Chevy, Ford, or Buick – left over from the days when Cuba was awash with American influence.

It wasn’t always this way. Cuba wasn’t always awash with old cars. Those cars were new once. Cuba was a major importer of American cars until the Revolution in 1959, when Castro came to power and put the island on a collision course with the United States. A large part of the island’s middle and upper classes left in an exodus that continues to this day. Although Cuba’s government has rejected capitalism and all of its values – Cuba’s cars are a reminder that the island once looked to the United States as a source of inspiration and culture.

Before the Revolution, Cuban culture looked not to Spain or Latin America for inspiration – but to the United States. Art Deco architecture, American cars, modernism and everything American was celebrated.

In 1900, Cuba became the first country in Latin America to have an automobile. Cuba was also the place where the first woman in Latin America drove an automobile – Renée Méndez Cape. In 1950, it became the second country in the world to transmit television after the United States. In 1958, it became the second country in the world to transmit color television, also after the United States. As if though it weren’t enough to be in love with American culture, Cubans were also fierce proponents of capitalism and the entrepreneurial spirit.

But with the country’s rejection of capitalism and all of its values, Cuba today is only known not for its modernism and progressivism, but for its old cars, its cigars, decayed buildings and octogenerian dictators. The island’s decline is directly related to its rejection of capitalism.

In Cuba, it is illegal for citizens to accumulate wealth. The accumulation of wealth is considered an economic crime – one that can result in fines, jail and political harassment. Equality is imposed, and no one is allowed to be wealthy.

Venezuela, another country who’s government has rejected capitalism in favor of socialism, is finding itself in what may eventually be a similar situation. This car-crazed country’s automobile industry, once the third largest in South America, has seen its car production output drop by 80% in the last few years.

A lack of dollars and capital, and the government’s increased control of the economy has forced many car manufacturers in Venezuela to drastically cut production. The drop in production is directly related to its government’s animosity towards the profit motive and the idea of making money. In addition to placing limits on the amount of profits that corporations can make, the government frequently expropriates and nationalizes private property – creating an environment that discourages investment in the economy.

President Nicolas Maduro and his socialist Chavista government take any opportunity to demonize anyone who dares to create wealth. The government recently fined General Motors Venezuela after accusing it of selling overpriced car parts. “The only things that these little managers want is dollars, dollars and more dollars,” President Maduro said.

Ever since the first automobile arrived in Caracas in 1904, automobiles have become ingrained in Venezuelan culture. But ever since Maduro’s predecessor, Hugo Chavez, made the government the only source of greenbacks (dollars) in an attempt to control more and more of the economy, car manufacturers are finding it increasingly difficult to find the dollars they need to finance their operations.

Many Venezuelan car manufacturers now find themselves in survival mode. Once South America’s third largest car manufacturer – Venezuela finds itself in a precarious situation. Venezuela’s Chavista government has rejected capitalism and has demonized the profit-motive as evil. Making money is bourgeois and immoral. This is reflected in the government’s treatment of its private sector and anyone who has a business or wants to make any money. Such people are fascists and Imperialists. The result of this attitude towards entrepreneurship and economic liberty? Economic decline.  

Will Venezuela end up like Cuba? In the future, if nothing changes and Venezuela’s car industry disappears – will tourists and adventurers go to Venezuela to gaze at its collection of antique American cars?

Only time will tell. But one thing is certain – if Venezuela continues along the path it is going – its car manufacturing plants and factories will shut down and Venezuelans will have to learn to live with their parents, and then grandparents’ cars. Just like in Cuba.

Because when making money is a crime, when dollars cease to be the way that men deal with each other… well, we know what happens then.

As Ayn Rand eloquently wrote in her novel, Atlas Shrugged“Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns–or dollars. Take your choice–there is no other–and your time is running out.”

Cuba Libre is dead

21 Jul

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From the moment that Carlos Manuel de Céspedes fired the first shot against Spanish colonialism in 1868, exile has been a recurring theme in Cuban society. Just as the first generation of exiles left Cuba to find refuge in the United States in the 1870s, José Martí’s exile in New York City in the 1880s and ’90s set the stage for Cuba’s Second (and final) War of Independence. Exiles again would play a prominent role in the resistance against the short but violent tyranny of Gerardo Machado in the late ’20s and early ’30s.

And then there is the present generation of exiles. The generation that overthrew the short dictatorship of Batista only to replace it with that of Fidel Castro. Cubans have always found their refuge against tyranny outside of Cuba. The island’s history is colored with dozens of patriots, heroes, adventurers and others who found refuge in exile – a refuge which later gave them the strength to launch a new fight to free the island from abroad.

When the first exiles began to flee Castro’s communist dictatorship in the 1960s, many proclaimed that they would return. They promised to continue the fight from abroad.

More than fifty years have passed and nothing has changed. What happened to this fight we said we would continue?

Our current exilic generation has lasted longer than any other. More than fifty years have passed since Cuba fell under Fidel Castro’s communist tyranny – and no amount of effort from Cuba’s exiled population has managed to unseat the Castros. No amount of protests, no amount of trade sanctions, no amount of international condemnation – no amount of anything. Thousands have died and millions have been forced to leave the island. Fidel Castro has achieved what no man before him had done – the subjugation and enslavement of Cuban society. And he has done it well.

Where are our generation’s leaders? Perhaps the greatest of Fidel Castro’s victories has been his systematic destruction and subjugation of our collective will to resist – our will to continue to fight – and to take what belongs to us – our human dignity. He has made us apathetic and numb to our condition. Those of us in the island only care about the next chance to escape, while those of us abroad have chosen to forget – to forget that our country is still in chains. Maybe things will change by themselves.

Cuba is Castro and Castro is Cuba. Just as Hitler was burned into the German consciousness, so too has Castro burned himself into Cuba’s collective memory.

Has Cuban society, in and outside the island, accepted its subjugation?

With every revolution and social movement around the world that takes place, all I can think about is Cuba. While we celebrate our past, and the men and women who risked everything by coming back to fight, we sit waiting. We wait for the tyrant who has taken our human dignity to die a comfortable death in the safety of his own bed.

What would our ancestors say about us?

There is only one thing. Cuba Libre is dead. And it is your fault.

Girón

17 Apr

Bay of Pigs

For famous men have the whole earth as their memorial. It is not only the inscriptions on their graves in their own country that mark them out; no, in foreign lands also, not in any visible form but in people’s hearts, their memory abides and grows. It is for you to try to be like them. Make up your minds that happiness depends on being free, and freedom depends on being courageous.

– Pericles

It was fifty-three years ago today, on April 17, 1961, that exiled Cuban patriots landed on the shores of their homeland in an attempt to liberate Cuba from the tyranny of Fidel Castro. Their betrayal on the shores of the Bay of Pigs and the resulting fifty-five year dictatorship that was allowed to continue will forever remain a stain on Cuba’s history. Although the story of the Bay of Pigs ultimately ended in tragedy for the exiles who aimed to liberate their homeland, it is important to remember the selfless act of courage that moved the men of Brigade 2506 to return to liberate Cuba.

Operation Zapata (the code-name for the invasion) called for the landing of 1,400 Cuban exiles on the shores of southern Cuba. The plan was simple – land 1,400 highly trained Cuban exiles, supported by air cover, tanks and heavy weaponry to join what was then a growing rebellion against Castro’s rule in the mountains of Central Cuba. The end goal was the overthrow of Castro’s increasingly oppressive and authoritarian dictatorship.  Before the invasion was to take place, the U.S. Airforce would carry out a series of airstrikes that would knock out the small Cuban airforce and allow the small detachment of exiles to use their superior training and weaponry to land and establish a beachhead.

The plan however, would be undermined, not by military catastrophe, but by an executive decision in Washington. As the men of Brigade 2506 approached the beaches of Cuba at midnight on April 16-17, they were unaware that John F. Kennedy had scuttled plans to provide the small exile force with the promised air support that they would need to hold off the numerically larger Cuban army. The rest was history.

In the ensuing days, the better trained and heavily armed small exile force was slowly overwhelmed by the numerically larger Cuban army. As a result of the cancellation of the majority of the airstrikes, the small Cuban airforce remained intact – and its remaining jets sunk the ships that carried much of the Brigade’s heavy weaponry. With the loss of their heavy weaponry and much of their extra ammunition, the invading force was left to fight with the equipment it had managed to land ashore the night before. For three full days, the smaller but better trained exile fiercely held off the much larger Cuban army and resisted wave after wave of attacks. Outnumbered ten-to-one, the exiles inflicted casualties at a rate of thirty-to-one against Castro’s larger but undisciplined army. Ultimately however, they were doomed by removal of the promised air cover and the loss of their equipment offshore. After resisting the fierce and relentless attack of Castro’s larger army, the exiles eventually succumbed when the full weight of Castro’s artillery and Soviet-equipped tank battalions arrived.

Over fifty years later, Cuban society remains under the dictatorship of the Castro family. Millions of Cubans have abandoned the island and thousands have lost their lives resisting the island’s dictatorial regime. Cuba’s economy is shattered by decades of failed economic policy and central planning and Cuban society is fractured.

The Cuban-American community never forgot how Kennedy betrayed them and the cause of Cuban liberty on the beaches of Playa Girón. To the Castro regime in Cuba – the invasion proved to be a Godsend, a victory that further entrenched his nascent totalitarian regime. To the people of Cuba and to the cause of Cuban liberty – it was a defeat that doomed Cuba and its people to the yoke of a half-century of dictatorship. 

Although April 17th marks a dark date in Cuba’s history – the heroic and lonely struggle of the men who fought at Playa Girón will ensure that the memory of the men of Brigade 2506 will remain enshrined in the pantheon of Cuba’s greatest patriots and in the heart of freedom-loving Cubans forever.

 

Cuba’s New Foreign Investment Law: The Economics of Apartheid

8 Apr

The Caribbean Unity oil tanker enters the port in Havana
“Money, says the proverb, makes money. When you have a little, it is often easier to get more. The great difficulty is to get that little.”

– Adam Smith

A lot of the recent news regarding Cuba has focused on the Cuban government’s passage of the new Foreign Investment Law (Ley de Inversión Extranjera). Proponents say that the new law eases restrictions and liberalizes rules on investment in the island. Some argue that the new law signals a new willingness by the Cuban government to embrace market reforms while others have even begun calling for an end to the embargo – pointing out that the Foreign Investment Law promises to finally allow investment and money to trickle down to average Cubans. But what does the Foreign Investment Law actually do, who does it benefit, and who does it leave out?

While the Cuban regime has allowed foreign direct investment from abroad since 1995, the government has been very cautious about allowing foreign companies to have any significant investment in the island. As a result of the economic crisis of the early 1990s resulting from the loss of the Soviet Union and its massive subsidies, the government was forced to undergo economic reforms to keep the country afloat. Even these reforms were timid however. Foreign investors starting enterprises in Cuba were allowed a maximum 49% ownership interest in their operations, ensuring that the government kept a tight grip on business activity. In addition to the restrictions on ownership and control of enterprises, taxes on profits were also extremely high. Laws and regulations restricting the free transfer of profits or dividends from the island also ensured that investors were usually dissuaded from investing in Cuba, further dampening the investment climate.

In this regard, the new Foreign Investment law makes some improvements. Under the new law, foreign investors are no longer restricted to a 49% ownership interest in their ventures – meaning that foreigners are now allowed to establish 100% foreign-owned companies on the island. In this regard, foreigners have even more rights than Cuban citizens living in the island, who are not allowed to open their own independent ventures – but are only allowed “licenses” to work independently (but legally still for the state). In an attempt to encourage more investment, the new law also lowers the tax burden on many foreign-owned companies – especially joint ventures, whose tax burdens are lowered from 30% to 15%. It even offers an eight year exemption from taxes for new ventures and lifts many of the restrictions on the free transfer of profits and dividends, allowing investors to take more of their money out of Cuba. Compared to the sky-high tax rates imposed on average Cubans who have licenses to work privately, the rates are extremely generous.

But although the new foreign investment law is an improvement on the previous 1995 law, it fails to fix many of the issues that have historically made Cuba such a poor location for investment and also does nothing to ensure that FDI (Foreign Direct Investment) benefits average Cubans. The new law ensures that many of the benefits of foreign direct investment do not reach the most important part of the Cuban economy – the still-nascent private sector. Worse still, the new rules create a sort of “economic apartheid” between Cubans and foreigners in which foreigners are treated better than Cuban citizens, and that ensures that nearly all of the economic benefits of the new law are gained by the state-owned monopolies and foreign ventures. Average Cubans and private businesses get almost nothing out of the new legislation.

Can an average Cuban who owns his own small business get a loan from his relatives in Spain? Or how about a new business owner who needs to invest money to buy a new truck to move goods from the countryside to the city? How about the new shopkeeper who would like to receive a loan to finance his new store? Can a small private restaurant owner get money from his relatives in Miami?

The short answer to all of these questions is “no.” The new Foreign Investment Law restricts investment to state-owned conglomerates and restricts investors from investing in private businesses. This means that the still-infant Cuban private sector will reap none of the rewards of foreign direct investment. Since almost the entire Cuban economy is state-owned, this ensures that most of the benefits of foreign direct investment go to the generals and Communist party officials who have been appointed to run the state-owned conglomerates, which effectively operate as state-owned monopolies. The tiny Communist elite stand to reap almost all the benefits of the new investment law.

Considering the Cuban government’s poor history of paying back creditors – investors should also have reason to fear investment in Cuba. Cuba still has very limited property guarantees, and foreign investors should remain wary of Law 890, which gives the government the express right to nationalize property without compensation. Although the United States is the only country with an embargo on Cuba, there is a reason few investors choose to invest their money in the island.

In addition to restricting investment to only state-owned ventures, the new law also forces foreign companies to hire their workers through the State Employment Agency – which controls and sets wages for workers. Ironically, in a country that likes to proclaim itself a “Workers’ Paradise,” the new law proclaims that “the payment of the workforce will be negotiated only between the employing entity and the foreign capital company.” This means that Cuban workers will only get state-controlled wages (the equivalent of $20 a month) and also ensures that only the most loyal, fervent Communists have access to jobs with foreign companies. It also ensures that foreign companies will be able to exploit Cuban workers for very low wages. In effect, the new law is one of the most anti-Cuban, anti-nationalistic laws ever passed in the entire history of the Republic.

The recent changes have done nothing to change the Communist Constitution’s restrictions on the creation of wealth by private individuals. Pursuant to the “Rules Established by the Communist Party’s Sixth Congress,”  Cuban law still prohibits the “concentration of wealth” and stipulates that “private and corporate persons will be prohibited from accumulating capital.” In other words, it’s illegal for people to accumulate any wealth or capital in Cuba. Persons violating the law will receive a visit from the “Economic Police” and face possible jail sentences. The only other country in the world with similar laws is North Korea. It’s no wonder then that Cuba ranks almost dead last in the Heritage Foundation’s Index of Economic Freedom at 177th (only North Korea ranks lower, at 178).

Cuba’s new Foreign Investment Law does nothing to change the old and artificial restrictions that have kept the Cuban economy in the Middle Ages. Until the law ensures that foreign direct investment can actually reach ordinary Cubans in the private sector – it will never result in the sort of economic benefits that will help the island emerge from its half-century economic crisis. Until Cuba lifts restrictions on capital formation, decriminalizes the creation of wealth by private individuals, and abandons its Soviet-style economic model, the Cuban economy will continue to lag behind the rest of the world.

Other communist countries like China and Vietnam long ago lifted restrictions on private business and allowed individuals to accumulate wealth and receive investment from abroad. The Cuban government (and potential foreign investors) should take note.

Petro-diplomacy and cheap oil: Why Latin American leaders are silent on the violence in Venezuela

25 Feb

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“History will have to record that the greatest tragedy of this period of social transition was not the strident clamor of the bad people, but the appalling silence of the good people.”

– Martin Luther King, Jr.

A violent crackdown on student protests has suddenly focused much of the world’s attention on Venezuela. Famous for making headlines for the antics of its late president Hugo Chavez, these days Venezuela is making headlines for more sinister reasons – namely, the violent wave of repression that the government has used to quell the protests that have gripped the country for the past two weeks. What began as a protest by university students against the rising tide of violent crime, runaway inflation and the shortage of basic goods and foodstuffs due to the economy’s increasingly moribund state has turned into a country-wide pogrom by the Nicolas Maduro’s chavista government and the National Guard. The largely student-led protests spread to other sectors of Venezuelan society when the Guardia Nacional Bolivariana (GNB), or National Guard, opened fire and killed three students in a matter of days. What was initially an ordinary protest ballooned into a countrywide protest that now includes vast swathes of Venezuelan society.

Nicolas Maduro and the chavistas have responded by unleashing the National Guard, the National Police and armed paramilitary gangs known as the Tupamaros on the populace. The Tupamaros, described by the chavista government as “workers collectives” are little more than armed thugs loosely controlled by the government who roam the streets of Caracas and other cities with near impunity. Tanks, armed troops and motorized units have been allowed to take the streets and open fire on the protesters in an attempt to silence the opposition. As a result, the number of dead and wounded has multiplied exponentially. Meanwhile, the country’s media, largely controlled by the government, has been either shut down, or prohibited from reporting on the violence. Twitter and the Internet have been shut down in certain areas. Foreign journalists have been thrown out. As the mother of a student who was killed with a bullet to the head said, “They are fighting ideas with bullets.” Different sources and reports have even confirmed the arrival of foreign Cuban commando brigades, experts in riot control, to help the Venezuelan government in its crackdown. The Cuban dictatorship, a long-time ally of Venezuela’s chavista government, has landed elite anti-riot commando brigades – the notorious Avispas Negras (Black Wasps) – to aid Maduro’s government in the repression of his own people.

Venezuela is currently experiencing its worst bout of violence since 1989 as government has unleashed armed soldiers, police and tanks to repress unarmed protests.

Venezuela is currently experiencing its worst bout of violence since 1989 as government has unleashed armed soldiers, police and tanks to repress unarmed protests.

And how has the international community responded? How have Latin American leaders and more importantly, the Organization of American States acted in the face of this crisis? With silence and complicity. Sometimes even with support. Only the strongest democracies in the region, Chile and Costa Rica, have condemned the violence in Venezuela. 

The events in Venezuela are an interesting example of the hypocrisy of Latin American leaders and their alleged “respect” for democracy and the rule of law. This was not the sort of response that we saw in 2009 from the OAS and Latin American leaders when left-wing Honduran president Manuel Zelaya was thrown out of office by a military coup. When the Honduran Army, on orders from the Honduran Supreme Court ousted President Manuel Zelaya and sent him into exile on June 28th, 2009, Latin American leaders reacted with outrage and were quick to condemn the coup. The coup was prompted by Zelaya’s violation of the constitution through his attempt to hold an illegal and unauthorized referendum to rewrite the constitution to allow for indefinite reelection. After Zelaya refused to comply with court orders to cease, the Honduran Supreme Court issued a warrant for his arrest. When Zelaya refused to submit to the order, Honduran soldiers detained him and instead of bringing him to trial, put him on a military airplane to Costa Rica. There were no deaths, but the military broke the law when, instead of bringing him to trial, mounted him on a plane into exile.

The OAS, invoking the Inter-American Democratic Charter, reacted quickly and expelled Honduras from the organization. The quick reaction by the OAS and the wider Latin American community was seen by many as a sign that Latin America had finally grown up. Coups and anti-democratic actions would no longer stand unaddressed in the region. But this begs the question – where is the same concern for democracy and the rule of law when it comes to the case of Venezuela? What is the difference? Why the silence? If the bloodless ouster of Honduran leftist Manuel Zelaya prompted the harsh rebuke of the international community – why hasn’t the Venezuelan government’s violent and brutal crackdown on the Venezuelan people not prompted a similar response?

When the Honduran military ousted Zelaya in 2009, the OAS and Latin American leaders responded with outrage. Where is the similar outrage to the violence in Venezuela?

When the Honduran military ousted Zelaya in 2009, the OAS and Latin American leaders responded with outrage. Where is the similar outrage to the violence in Venezuela?

Ever since the arrival of Hugo Chavez and his socialist chavista government, Venezuela has been engaging in what many have called “petro-diplomacy.” In exchange for the loyalty and support of foreign governments Venezuela has funded and supported various left-wing governments across Latin America. It has used the largest oil reserves in the world to spread its influence and Socialist left wing ideology across the region to ensure that it has allies in times of crisis. Venezuela has supported the dictatorial regime of the Castros in Cuba with critical oil supplies it needs in order to survive. It has also supplied Daniel Ortega’s government in Nicaragua with much needed economic aid and preferential oil deals. This strategy has been employed not just in Cuba and Nicaragua but in numerous other countries, including Ecuador, Bolivia, and Argentina among others. Even the relatively progressive government of Uruguay has not been free of the influence of Venezuela’s black gold. The Venezuelan government has used its petroleum and the promise of cheap oil deals to influence Latin American international relations and to win supporters to its side. Oil explains the willing complicity of regional governments to the violence in Venezuela.

Petro-diplomacy explains the schizophrenic and bi-polar responses by Latin American leaders when it comes to the situations in Honduras and Venezuela. Venezuela’s chavista government has been able to use its oil to win the support and loyalty of many governments in the region. It explains how the OAS and its members expelled Honduras in 2009 for a military coup against its leftist leader Manuel Zelaya against an affront to democracy, and then proceeded, only a few months later, to hold a vote allowing Cuba, the only non-democratic dictatorship in the Western Hemisphere, to return to the OAS. After much attention, Cuba actually declined the invitation to return.

The reaction of many governments in the region to the crisis in Venezuela should come as no surprise to the astute observer. It is no surprise that they have either openly come out in support of the government’s violent crackdown or remained silent in the face of the violence.  If you want to decipher the mystery of the hypocrisy of Latin American leaders and the OAS, you only need to look at the sweet oil deals that they have been receiving from Venezuela’s chavista government.

Latin American leaders like to speak the language of democracy and the rule of law – but they do not practice it. When they remain silent in the face of the violence in Venezuela they are as culpable as Nicolas Maduro’s government. They have traded their ideals and principles for their own economic interests – and in the process they have abandoned their Latin American brothers.

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