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Timeshare in Cuba A recent report in The Beat revealed some aggressive movement in Canada towards creating large timeshare projects in Cuba. Since the article, TMS & Associates, Quebec has also announced plans for a $50 million resort on Cayo Coco, an offshore key north of the province of Ciego de Avila. At least five other international chains have plans for Cayo Coco or nearby Cayo Guillermo. As Fidel Castro, 73, heads towards his dotage, the many miles of affordable beachfront 90 minutes from Florida conjure up a picture of opportunities to come. How much is real and how much is rum punch? Senator Christopher Dodd (D-Conn.) sponsored a measure that would establish a bipartisan commission to evaluate overall U.S. policy towards Cuban and to recommend changes for Cuba once its current dictator is out of power. It was defeated 59-41, largely on the grounds that because it was attached to a military spending bill it would prove an irrelevant impediment to both the defense bill and the wishes of the next president. The fact that proposed bi-partisan commission had eight Democrats and four Republicans didn't help, either. So far, in an election year that vote would appear to be Congress's usual backtracking under pressure from the Cuban-American establishment in Miami, but something serious came up in the House. For the first time in decades, the U.S. Congress is moving towards lessening sanctions with a proposal that has a serious chance of passage. Farm-state Republicans, siding with Democrats and business interests such as Archer-Daniels-Midland (ADM) pressured the House leadership to drop their opposition to a bill permitting the sale of food and medicine to Cuba. Both the Senate Foreign Relations and Appropriations Committees have already endorsed such a change. Attached to an agricultural spending bill scheduled for an immediate vote, the final language of the legislation will likely be a compromise negotiated between all parties, including representatives from Cuban-American districts in Florida. The bill is expected to permit food and medicine sales to Cuba, Iran, Sudan, Libya and North Korea. (The Clinton administration has already lifted North Korean restrictions and changed official State Department terminology from "Rogue Nations" to "states of concern.") The Cuban-American representatives are insisting on language that denies U.S. credit guarantees and continues a ban on dollar-earning U.S. imports of Cuban goods. The critical issue for them is ironclad assurances that Cuba would not qualify for any credits or loans. The typical Cuban barter agreement is also prohibited. Under current rules, trade between private enterprises is permitted. Since virtually all Cuban industry is government owned and cash poor, little business can be completed under these proposed rules. There was just $63,000 of U.S. agricultural exports in 1999. However, the dollarization of Cuba is complete. Unable to control dollar possession, the Cuban government has been forced to legalize it. Thus, the regime's ability to control monetary policy has essentially been eliminated. According to The Washington Post, an international trade advisory firm, the Stern Group, estimates that on a cash only basis, food and medical exports to Cuba might amount to $400 million annually. Were trade unrestricted, they estimate sales of $1.6 billion and the creation of 20,000 associated jobs in the United States. The Clinton Administration has voiced support for easing relations with Cuba but concern over the bill's other provision which prohibits a president from imposing unilateral sanctions on any country without congressional approval. Generally, any White House always opposes a bill that restricts presidential prerogatives. The prominence of the Elian Gonzales case and the public reaction to it has pushed the sanction question forward on the public stage. The situations in Iraq and Serbia add to the possibility of a debate over sanctions as a presidential year issue. Should that take place, the key questions are likely to be something like this. What do sanctions accomplish? The general history of unilateral, long-term sanctions is that they do not change a regime's policies but do cause suffering among the least powerful of the country's citizens. Sanctions are often applied when politicians are being accused of "doing nothing" but they do not want to declare war. More than 24 additional sanction proposals are pending in Congress. Currently, the United States imposes unilateral sanctions on more than 70 countries covering almost 70 percent of the world's population. It has imposed unilateral sanctions more than 120 times over the past 80 years, over half of them in the Clinton administration's past six years. They have proven an historic failure because sanctions offer the targeted regime a ready-made enemy to divert attentions from the leader's failings and, as seen in Iraq, they further impoverish the people who are already victims of a tyrant. The ruling elites take what they need, leaving even less for their oppressed people. Are sanctions useful in expressing a moral stand? Most ethical systems hold that it is morally indefensible to deliberately cause an oppressed people to suffer in order to encourage them to rise up and overthrow their leadership. The weaker the people are, the less able they are to resist their government. Sanctions make them ever weaker and more dependent. Tyrants already know how to keep their people so weak that they cannot do anything but obey. On the other hand, people who have economic freedom desire political freedom because they possess the means to be independent of the government. That is why governments, as in the case of Social Security proposals, tend to encourage programs that redistribute income but seek to restrict the private accumulation of wealth. Do sanctions work? By creating a visible, external enemy, sanctions give a tyrant an excuse for suppressing dissent, justifying strict "war-time" controls, stirring up nationalism and explaining away all suffering and failures caused by the regime. Particularly in the case of Cuba, sanctions that are routinely defied by our allies have even less chance of working. Attempts to punish the strong are just passed along to the weak. Should the food and medicine ban be lifted this fall, the next Congress will then face pressure to authorize barter and credits. The same sanction arguments will re-surface. Should taxpayers be forced to subsidize business with a tyrant? Since the U.S. already does that elsewhere, the question boils down to the purely political - which tyrants? The proponents of continued sanctions will make a case along these lines. The Castro regime is broke and has no money to buy anything. Cuban stopped paying its foreign debt in 1986 and has an accumulated overdue obligation of $15 billion. Castro is a committed ideologue who permits just a minimum interaction with capitalism to keep his regime in power and no more. His people will never be allowed to prosper. For example, the Cuban labor policy is to enter into a cooperative agreement with a capitalist investor. The company pays the government for labor in dollars at going rates. The actual workers receive 10-15 percent of the amount paid in pesos. The government pockets the rest. Finally, Castro cannot stand the rise of any foreign influence. He is perfectly capable of creating a situation which re-creates sanctions just to stay in power. In a recent speech, Thomas Donohue, President and CEO of the U.S. Chamber of Commerce, outlined the rescind sanctions position, "The embargo provides the perfect excuse for Fidel Castro to explain away his failed centralized economic policy. Unilateral economic sanctions are an affront to free trade policies that bring prosperity and the embargo shuts down the strong spark of free enterprise present in the Cuban people." The Chamber's policy is that it is time to begin a new relationship with Cuba. They believe that they can play a leading role because they are non-governmental, voluntary and representative of the private sector. They plan to provide training and development programs to nurture the Cuban private sector and insist on policy changes that would allow the Cuban private sector to grow. They believe that sanctions should be removed because the Cuban people have been left out of one of the most exciting and dynamic economic expansion periods in history. They also don't want American companies to be shut out of great opportunities while European and Latin American countries are establishing a foothold. As American farmers seek expanded world markets, the interests of labor, agriculture and business coincide. That's an alignment that may well prove difficult to resist on both sides of the Straits of Florida. |
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