FOR OVER FIVE DECADES, the United States has maintained an embargo on Cuba, which restricted trade and investment between the two countries. The impact of the embargo on the Cuban economy has been enormous, sparking a tremendous amount of debate over whether the embargo should be continued or lifted.
The arguments on both sides of the debate have been fierce. Fortunately, good sense has finally prevailed and the US has taken the bold decision to end the more than 50 years of economic and political hostility towards a relatively small country whose only real crime was the determination of its people to shape their own destiny without undue interference from the most powerful country in the world.
Within this broad context, my intention over the next three weeks is to critically assess, from an analytical perspective, some of the potential implications of lifting the embargo on the business environment in Cuba. Although the contributions will focus mainly on Cuba, due consideration will nonetheless be given to various potential effects on CARICOM given existing diplomatic and trade exchanges between CARICOM and Cuba.
Of course, an undertaking of the nature being proposed cannot be completed without an overview of the history of the embargo and some of the various changes that have taken place over time; and so, part one begins with the historical context.
On January 1, 1959, Fulgencio Batista fled Cuba, after depleting the national treasury, as rebel forces led by Fidel Castro took over the island. Soon after, Cuba began to nationalise businesses, including the US oil refineries on July 6, 1960. US president Dwight Eisenhower, with the support of Congress, cancelled Cuba’s sugar quota. This marked the beginning of the US embargo against Cuba (Chronology Of US-Cuba Relations 1958-1998).
Some of the initial mandates under the embargo have changed in recent years. This includes the ban on travel, and the trade of both food and medicine. However, there are restrictions, such as the approval of each sale by the US Commerce Department. Since January 1999, Los Angeles, New York City, and Miami have all become hubs for chartered flights to Cuba.
In May, 2000, legislation was passed to remove the restrictions on the sale of food and medicine to Cuba. However, no financing was allowed, and all sales had to be paid for in cash (History Of US-Cuba Policy). Furthermore, the agricultural appropriations bill for fiscal year 2001, passed by the 106th Congress, ended the unilateral medical and agricultural sanctions. This allowed for a broadening of what could be sold and to whom. Yet, there is still a ban on US financing of these sales, and one-year limits on the licences.
How, then, was the business environment in Cuba affected by this embargo? What are some of the potential implications of lifting the embargo for Cuba as well as CARICOM? Answers to these questions will be forthcoming in the next two weeks’ contributions.
Email: bfrancis@uwi.edu.bb