Principles for Economic Engagement for a Free Cuba
About This Event

The Cuban people need--and deserve--profound change, including political liberty and economic opportunity, even as Fidel and Raúl Castro favor a transition from one dictator to another that preserves the vestiges of the Cuban police state and the nation’s decrepit socialism. Yet much of the world is eager to support a meaningful transition of power that helps Cubans regain their country and attain a more prosperous future.

Other corners of the world offer many examples--in the not-so-distant past--of transitions from dictatorship that left desperate populations disappointed and disheartened, stalling progress toward democracy and free market systems. It is therefore possible to draw on the lessons learned from those examples and make preparations for a timely and substantial support that will sustain a genuine democratic transformation through irreversible political and economic change.

At this event, leading scholars and policymakers will discuss measures that can be adopted to help Cubans expand their freedoms. Panelists will examine and debate the universally recognized labor rights embodied in the so-called Arcos Principles, a set of conditions for foreign investment in Cuba that stress human rights and fair hiring practices. Participants will also address the timing and conditionality of U.S. economic support to ensure that it serves the cause of real change, rather than allowing a post-Castro Cuban regime to tread water.

Agenda
8:45 a.m.
Registration
9:00
Panel I:
Opening up Political and Economic Space Now
Presenters:
Kirsten Madison, U.S. Department of State
Marc Wachtenheim, Pan-American Development Foundation
Moderator:
Roger F. Noriega, AEI
10:00
Panel II:
Engagement with a New Regime
Presenters:
Paul Bonicelli, U.S. Agency for International Development
George Dunlop, U.S. Army
Daniel Erikson, Inter-American Dialogue
Nilda Pedrosa, Office of Senator Mel Martinez (R-Fla.)
Moderator:
Roger F. Noriega, AEI
11:30
Adjournment
Event Summary

January 2008

Principles for Economic Engagement for a Free Cuba

The Cuban people need--and deserve--profound change, including political liberty and economic opportunity, even as Fidel and Raúl Castro favor a transition from one dictator to another that preserves the vestiges of the Cuban police state and the nation's decrepit socialism. Yet much of the world is eager to support a meaningful transition of power that helps Cubans regain their country and attain a more prosperous future.

Other corners of the world offer many examples--in the not-so-distant past--of transitions from dictatorship that left desperate populations disappointed and disheartened, stalling progress toward democracy and free market systems. It is therefore possible to draw on the lessons learned from those examples and make preparations for a timely and substantial support that will sustain a genuine democratic transformation through irreversible political and economic change.

At an AEI event on January 15, 2008, leading scholars and policymakers discussed measures that can be adopted to help Cubans expand their freedoms. Panelists examined and debated the universally recognized labor rights embodied in the so-called Arcos Principles, a set of conditions for foreign investment in Cuba that stress human rights and fair hiring practices. Participants also addressed the timing and conditionality of U.S. economic support to ensure that it serves the cause of real change, rather than allowing a post-Castro Cuban regime to tread water.

Panel I--Opening up Political and Economic Space Now

Kirsten Madison
U.S. Department of State

U.S. policy toward Cuba does not seek simply to end the Castro regime, but to fully integrate a democratic and sovereign Cuba into the inter-American system. The Cuban government must fundamentally change the way it does business, treats its citizens, holds power, and engages the world. Essential to any process of meaningful change is the restoration of both economic and political freedoms, which constitute what the Cuban people want.

The Americas, as a group, have already defined basic principles and commitments by which the inter-American system will be guided. The Inter-American Democratic Charter is a commitment that the peoples of the Americas have a right to democracy, and their governments have an obligation to promote and defend it; for the citizens of the Americas to enjoy social, economic, and political progress, they must have democracy. The charter applies a standard that the democracies in the Americas have already agreed to amongst themselves. 

Countries should define in concert a shared expectation in the international community of what a transitioning Cuba should look like and help create a context in which it is more likely to happen. They should use their influence with the Cuban government to advance issues on which all civilized nations can agree, such as the need for the release of political prisoners and an end to incarcerating people for peaceful political dissent. Both nongovernmental organizations and legislatures should push to enforce principles like the Arcos Principles, which focus on the promotion of human rights and fair labor, hiring, and employment practices.

The international community should create a context in which it is easier or more likely for change to happen. Enumerating a set of business principles and talking to governments that are home to businesses currently involved in Cuba about a set of principles is critical. U.S. economic engagement should occur at a time when it can reinforce a process of change, and we should be prepared to shape the way our businesses engage in that country.

Mark Wachtenheim
Pan-American Development Foundation

Cuba is a communist, one-party, totalitarian, Stalinist regime. The three factions in government--the orthodox, the reformers, and the radical reformers--reflect divisions within Cuban society. The orthodox are a small, dwindling group that has supported the revolution from the beginning. The reformers represent most of Cuban society and provide public support for the government, while at the same time privately lamenting their lack of economic freedom and opportunity. The radical reformers, on the other hand, which represent civil society within Cuba, speak out about the desire of the vast majority of Cuban people for change--fundamental, serious, democratic, economic change.

Economic and political engagement in Cuba means supporting these last two groups by providing them material, financial, and especially moral support, which in totalitarian societies is extremely important. Individuals and the private sector should support these two groups through ideological solidarity.

The Inter-American Democratic Charter, a document signed on September 11, 2001, in Lima, Peru, gathers the collective vision of all of the democratic countries of the hemisphere. The Pan-American Development Foundation stands ready to support the realization of this vision in Cuba.

Panel II--Engagement with a New Regime

Paul Bonicelli
U.S. Agency for International Development

If Cuba chooses to have a democratic transitional government, the U.S. Agency for International Development (USAID) is ready to provide aid for the enormous challenges to economic recovery and growth that a new democratically elected government in Cuba will inevitably face. USAID's program would begin with the establishment of a competitive, free economy that is conducive to growth led by the private sector. The multifaceted plan would tackle issues such as microeconomic stabilization, infrastructure, private sector strengthening, trade assistance, regulatory and export assistance, business sector and agricultural development, land regulation assistance, investment in people and education, and environmental protection policies. USAID would also emphasize the need for the government's relevant institutions to conduct government business in a transparent and accountable manner.

The United States should not pursue this endeavor on its own, but rather should combine USAID expertise with cooperation from other donor nations and the private sector to help rebuild Cuba.

George Dunlop
U.S. Army

The new concept being incorporated in U.S. Army doctrine is full-spectrum operations, which opens the spectrum of operations to include stability operations. There are eight principles that are important to stability operations. First, there must be strong analysis specific to a situation. Second, this analysis must be informed by locals, since an indigenous economy and state may operate in a different manner. Third, America's mission must always be freedom. Fourth, our doctrine must be based on rule of law. Fifth, private property rights for citizens are a vital component for success. Sixth, failed states must tackle and overcome pandemic corruption. Seventh, fiscal systems must be in place to fuel economic opportunity. And eighth, entrepreneurial capitalism works from the bottom, up, not from the top, down.

Transition must also include the synergistic integration of three types of infrastructure: institutional, which includes rule of law; physical, such as potable water and sewage; and capital, which fosters business creation. Military commanders on the ground may be involved in maintaining basic criminal and antimonopoly codes, confirming property rights, and partaking in civil legitimacy tasks.

Nilda Pedrosa
Office of Senator Mel Martinez (R-Fla.)

In Cuba, political change is necessary before we can have a true discussion about economic opportunities for the Cuban people. From a historical standpoint, economic reform does not guarantee political reform. For example, China has undergone significant economic change, but this has not led to democratic reform.

The Castro regime's main concern is to stay in power, but without effective political change, there is no guarantee for the Cuban people that the regime will not retract economic reforms in order to maintain its own power. In order to see real change in Cuba, political reform is as important as economic opportunities for the people.

Dan Erikson
The Inter-American Dialogue

After the collapse of the Soviet Union, the Cuban economy collapsed as well; its GDP shrank by one-third, and most independent economists suggest that the current standard of living is about half of what it was in 1989. Other countries also suffered the effects of the collapse of the Soviet Union, and their experiences with economic transitions serve as a framework for lessons learned. The first lesson is the need for the restoration of property rights, which ties into the larger need for rule of law. Second, the privatization process must be as transparent, equitable, and fair as possible. Third, institutions do matter. While some institutions from a social system can be transformed to manage market reforms, others cannot.

In the future, the Cuban economy could be like Caribbean nations that rely greatly on tourism, manufacturing, and mining. As such, in terms of future economic prospects for Cuba, the debate over transition style should not be thought of as Poland versus Vietnam, but rather Jamaica versus the Dominican Republic.

AEI intern David Bloomberg prepared this summary.

View complete summary.
Also Visit
AEIdeas Blog The American Magazine

What's new on AEI

With Ukraine, Putin is courting the home crowd
image Ayn Rand vs. Paul Ryan
image Fighting for us: The real stakes in Israel’s war
image Obama failed to stop the Islamic State when he had the chance
AEI on Facebook