American Enterprise Institute

February 27, 2007

[Edited transcript from audio tapes]

8:45 a.m.	Registration
9:00	Introduction:	Christopher DeMuth, AEI
	Keynote Speaker:	The Honorable Carlos Gutierrez, Secretary, U.S. Department of Commerce
10:00		Panel I: From Dictatorship to Democracy
	Panelists:	Georges Fauriol, International Republican Institute
		Jose Antonio Font, American Capital Partners, LLC
	Moderator:	Roger F. Noriega, AEI
11:15	Break
11:45	Luncheon
	Keynote Speaker:	Caleb McCarry, Cuba Transition Coordinator, U.S. Department of State
1:00 p.m.		Panel II: Transforming Cuban Society
	Panelists:	Frank Calzon, Center for a Free Cuba
		Orlando Gutierrez-Boronat, Cuban Democratic Directorate
		John Sanbrailo, Pan American Development Organization
	Moderator:	Roger F. Noriega, AEI
2:15		Panel III: Transforming the Cuban Economy
	Panelists:	John Andersen, U.S. Department of Commerce
		Juan Belt, USAID
		Ralph Galliano, Institute for the Study of U.S.-Cuba Policy
	Moderator:	Mark Falcoff, AEI
3:30	Adjournment

Proceedings:

Christopher DeMuth:  My name is Chris DeMuth, I’m president of the American Enterprise Institute.  I’m glad to welcome you all this morning. 

The forty-eight-year social and economic catastrophe that Fidel Castro imposed on his countrymen and his country is coming to an end sometime soon.  The purpose of our discussions today is to discuss the prospects, under the title “Moving Toward a Free Cuba.”  I would like to thank my colleague Roger Noriega, who is head of Latin American studies at AEI, for putting together the distinguished panels and the many individuals that he has attracted for coming here, and all of you for being with us.  A special thanks to Mark Falcoff, Roger’s predecessor here at AEI, who in emeritus status continues to counsel with us and will be moderating the last session.

One year after 1959, when Castro came to power, the Gutierrez family, with seven-year-old Carlos in tow, left for the United States.  Fifteen years later, right out of college, he went to work as a sales representative for Kellogg Co., where he had a spectacularly successful career, moved steadily up the ranks.  In 1999 [he] was named Kellogg’s youngest CEO and president in its one-hundred-year history.  He became chairman of the board a year later.  In 1995 [sic] he became the Secretary of Commerce in the Bush Administration. 

As Secretary of Commerce, he has many serious economic responsibilities.  He’s a key member of the president’s economic team.  He works on trade liberalization, has responsibility for economic statistics and oceanographic research, intellectual property and many other matters.  But it has also fallen to him to be co-chair with Secretary Rice of the President’s Commission on Assistance to a Free Cuba.  He has been a galvanizing leader in this position that he fell into.  He has spoken very sharply, very pointedly.  He is clearly a results-oriented businessman rather than a diplomat and has given great hope for those of us who are looking forward to what the prospects may be in Cuba.

I’m delighted that he would give the keynote address at this conference.  He will take questions afterwards.  Will everyone please give a warm welcome to Secretary of Commerce Carlos Gutierrez.

Carlos Gutierrez:  Thank you, Christopher, for that very kind introduction.  I appreciate that.  It’s also an honor to be with my friend Ambassador Noriega, who I know knows this subject dearly.  I’ll have to be careful because he’s probably the expert in town on this.  I appreciate everything you’ve done on this topic and for your service.

Since July 2005, I have co-chaired along with Secretary Rice the Commission for Assistance to a Free Cuba, which was established by President Bush in 2003.  So that was the second round of the commission’s reports and findings and two new co-chairs.  Before that it was Secretary Powell and Secretary Mel Martinez.  So I’ve taken up the role of the Cuban on the commission – the Cuban-American.  It’s an honor to co-chair that with Secretary Rice and it is in that capacity that I’m here with you today.

Cuba, as you well know, is at a critical point in time.  The country is poised for change.  The policy of the Bush Administration has been to help the Cuban people hasten the day of their freedom and not to do them a great disservice by legitimizing a successor regime and help it maintain its tight grip over the Cuban people.  Cubans on the island, as you well know, are economic captives and they are political captives.  Interestingly, they have become the workers of this hemisphere’s last plantation – ironically. 

For over forty-eight years the regime has survived by stripping the average Cuban of all power and consolidating it among the privileged few.  While the Western Hemisphere has been on a steady march toward freedom, Cuba has regressed.  There is no liberty in Cuba.  There is no freedom of association.  There is no freedom of speech.  There is no free flow of information.  In fact, as you well know, just last week two independent journalists were asked to leave Cuba.  That is an ongoing drama with journalists and other proponents of freedom of speech who have had a tough time in Cuba.  What happened last week is just one of many examples.

There is not even freedom to make an honest living or work where one chooses.  The average Cuban lives on ration cards, which provide staples such as rice and beans, but in a best-case scenario the cards only provide enough to live for about ten days.  After forty-eight years, people are still standing in line with a ration card.

To make up the difference, the Cuban people have been forced to turn to a black market that exploits the poorest of the poor.  These conditions have created a culture of widespread corruption.  To survive, Cubans have to skim off the top, live on the margins and get by however they can.

After the fall of the Soviet Union, Cuba lost its largest subsidy and its economy contracted by about one-third.  To make up the difference, the regime began selectively issuing permits to allow private enterprise to offset the economic loss.  Yet when the economy began to show some improvement, the limited and selective experiment with capitalism was halted.  I believe that what Castro saw was that this newfound independence was a threat to his power.  After all, the most effective way for a communist dictator to hold on to power is to ensure that people are tied down by their dependence on the state.

Contrary to claims that the U.S. has made the situation on the island worse, we have been helping the Cuban people for decades.  We have been a major source of humanitarian aid.  In fact, we supply one-third of Cuba’s food and one-third of Cuba’s medicines.  We have been actively working to support independent civil society on the island, providing funding for education and exchanges and helping to break the regime’s information blockade.  According to the first report of the Commission for Assistance to a Free Cuba, up to $1 billion – or about 2.5 percent of the Cuban economy – came from remittances from the United States to Cuba.

So we get the question very often: when will the U.S. change its policy?  It’s the first question that comes out of the block, and maybe it’ll be the first question here.  When will the U.S. change its policy?  We believe that’s the wrong question.  This isn’t about Washington’s policy.  The question should be: when will the Cuban regime change its policy?  That’s the question we should be focused on, not the focus on Washington. 

Years of foreign investment have not improved the lives of the average Cuban – perhaps the lives of those that are in power, but not the lives of the average Cuban.  According to the State Department, 1.9 million tourists – predominantly from Canada and the European Union – generated $2.1 billion for the Cuban economy in 2003.  This tourism however has not improved the plight of the Cuban people.  The resorts which exist today in Cuba and cater to foreign tourists are off-limits for Cuban nationals. 

So in essence what you have in Cuba is a tourism apartheid that reinforces the repression of the Cuban people.  In fact, racial inequality – speaking of apartheid – is rampant on the island.  Ironically, since Castro’s overthrow of Batista in 1959, Afro-Cubans – who now make up 60 percent of the population – have been unable to play a role in society that would reflect their importance in that country.  You don’t see anywhere near 60 percent of the leadership being made up by Afro-Cubans.  You don’t see that in key leadership positions throughout the government, throughout the regime. 

So that’s just one more aspect to convey about Cuba.  When you hear support about Cuba, we should just bring up again that this is just one more of many things that need to be highlighted and need to be pointed out.

Foreign firms that operate on the island pay the government in dollars for the labor of the Cuban people.  Yet the Cuban government turns around, pays the workers in a lot fewer, devalued pesos and pockets the difference.  As you know, pity the worker.  Pity the worker who dares talk openly about the need to organize and operate unions. 

It’s interesting that here in Washington, as you well know, working conditions of foreign laborers is being widely discussed today and debated.  Why do labor conditions lose relevance when it comes to Cuba?  The Cuban system amounts to nothing more than an indentured servitude yet the exploitation and repression of workers on the island are rarely acknowledged by those who call for lifting the embargo.  The record shows that the regime can manage trade and investment while still being repressive.  The Cuban people simply do not benefit from foreign investment under Castro.

So the embargo is not the problem.  The embargo is not the solution.  The problem is the communist system and the only solution is to change the system.  So the problem and the solution are in Cuba.  They are not in Washington or Miami or New Jersey or any other place in the U.S.  It’s all about Cuba and our focus should be on policy changes in Cuba, not policy changes in the U.S.

Those who suggest that Cuba is an untapped market for U.S. goods and investors, I submit to you that foreign businesses will not flourish as long as there is an active communist regime and control.  It is naïve to suggest that lifting U.S. economic sanctions would weaken the regime and would force them to change, as though this were a well-kept secret that only we know – that if we lifted the embargo we would force them to change.  I would just ask that you think about if we believe that by lifting the embargo we would force change, don’t you think that they know that?  Don’t you think they are aware that that would be a risk to their power and that they would do everything in their power to manage it in such a way that it would not be a risk? 

So I would just ask that you think about the history and the fact that Castro has long imposed policies to control the economic activities on the island, including those of foreign investors and tourists.  Those policies are deliberately designed to keep Cubans dependent and to minimize outside influences on them.

I tell you this morning, we need to stand firm in our rejection of the Cuban dictatorship.  This is not the time to get soft on Cuba.  This is not the time to start waffling.  This is not the time to start being anything but decisive and firm, and that means standing behind our policies to deny revenue to the regime while reaching out directly to the people of Cuba.  We believe that the focus should be on the people of Cuba, the plight of the people of Cuba, and how do we help the people of Cuba?  That’s very different than doing business with the regime.

The United States stands ready to work with the Cuban people to attain political and economic freedom.  We have seen examples of transitions to democracy in places like Poland, Hungary, Czechoslovakia, South Africa and Chile.  Each example is different; each path is unique.  The people of Cuba deserve the opportunity to craft their future, design their government, and elect their leaders. 

Once again – I don’t think this can be said enough – this is not about U.S. policy.  That’s exactly what Castro would like us to think, that this is all about U.S. policy and everything on the island has been about U.S. policy.  I ask you to not let others fall for that trap.  This is only about Cuban policy.  The only way to solve the problem for the Cuban people is to change the policy in Cuba.  The focus should be exactly on that, not on Washington, not on Miami, not on New Jersey.  The focus should be on the plight of the Cuban people and there isn’t enough focus on that.  There isn’t enough focus on answering the question: how do people really live in Cuba?  What is the average life like in Cuba every day?  That’s what the focus should be, not on Washington’s moves or decisions or policies.

We believe that Cubans, like others throughout the world, deserve fundamental freedoms – the freedom of speech, freedom of the press, freedom to worship.  We believe that they should legalize all political activity – peaceful political activity – and the release of all political prisoners.  The establishment of an independent judiciary.  The right to own private property.  The creation of independent trade unions and associations to facilitate collective bargaining.  The guarantee of fundamental human rights and eliminating any climate of fear and repression and the right to participate in free, open, competitive elections.  Forty-eight years of history has demonstrated that these changes will not happen under Fidel Castro.  It is naïve to think that these changes will happen under Raul Castro. 

More than ever, we need to be sharp about the realities of the Castro regime.  This is not time either to get naïve about what could happen in the future.  Since the revolution, General Raul Castro has been the enforcer of the regime’s repressive apparatus.  He is today the longest-serving minister of defense in the world.  So handing the dictatorship to a military leader would be a step backwards, denying Cuba the opportunity to move into the modern era – which is essentially what a succession from Fidel to Raul would be, it would be just handing the reins over to the full military.

Last year we issued a compact with the people of Cuba which clearly lays out the intentions of the U.S. government.  We believe that we can help the Cuban people and we want to help the Cuban people.  The U.S. can provide emergency food, water, fuel, medical equipment.  We can help ensure electrical power is maintained and improved.  We can help rebuild Cuba’s shattered economy, encouraging assistance from other countries around the world.  In short, we will help the people of Cuba move away from a totalitarian, communist dictatorship and toward a free and representative democracy.  As the president has made clear, we will not work with a regime that is a declared enemy of the U.S. and opposed to every single value that we hold sacred.  Castro has been building fear in the hearts of Cubans on the island while failing miserably to deliver results for his people.  He has repeatedly – repeatedly – demonized the U.S., blaming us for the failure of his policies.  It’s actually been a very clever way of doing it and unfortunately in some instances he’s been effective at it.  He has convinced people that Cuba’s problems are caused by us in Washington and not by policies in Cuba. 

The chief architect of the plight of the Cuban people is Fidel Castro.  The chief enforcer is Raul Castro.  With the unflinching and unquestioning support of Cuba’s elite, the Castro regime has destroyed the ability of Cubans to succeed, prosper and make a life for themselves.  The U.S. is ready to help the Cuban people peacefully usher in a new era. 

I want to be clear about something that President Bush has said often, repeatedly, and Secretary Rice has said often and repeatedly.  That is that we recognize that the future of Cuba is in the hands of the people in Cuba.  People like me who have come over to this country, we are Cuban-Americans.  I’m an American citizen.  I don’t have any aspirations to go back to Cuba and be part of the political process.  It is another country.  The leadership in on the island and we recognize that. 

To the Cuban people, I say this – and this is very important and cannot be said often enough: our president has no imperialist intentions.  We have no military plans to occupy the island.  We will not confiscate property or support any arbitrary attempts to reclaim property.  The U.S. government is not the greatest threat against Castro, even though that’s what has been said for forty-eight years and everything has been blamed on the U.S. government.  “The embargo has caused the food shortage, not the communist system.”  “The reason we have to militarize is because the U.S. will attack us someday.”  We don’t have any military plans.  “The reason we have to repress the Cuban people is because we have U.S. agents all over our island.”  We have absolutely no intentions, no imperialist intentions, no military plans.  “The U.S. government will come in one day and kick you out of your house.”  We have no intent to support confiscation of property or arbitrary claims on property.  It is all false.

Again, we are not the biggest threat to Castro.  The biggest threat is in the hearts of the Cuban people, and that is their ability to invent, to dream, to create a society of prosperity, equality and hope – what still exists in the hearts and minds of all Cubans, they just can’t say it.  But you can be sure it’s still there.  It’s a fire that’s inside of every Cuban.

As we stated in the compact, Cubans who want democratic change should count on our friendship and support.  The people of Cuba deserve freedom, dignity and true social justice.  We share the dream of a better tomorrow for them and for their families.

I can’t tell you how much I appreciate your interest in this subject.  I thank you for being here and let me just close out by saying: Viva Cuba Libre.  Thank you.

Christopher DeMuth:  Secretary Gutierrez has time for a very few questions.

Question:  Frank Calzon.  Mr. Secretary, it’s great to see you here.  The question is simple.  We heard a lot in Washington about Cuba.  How is the dynastic succession in Havana from Fidel to Raul different from the dynastic succession that has taken place in the past in Haiti – from Papa Doc to Baby Doc – from one Somoza to another – from a father to son in North Korea?

Carlos Gutierrez:  It’s very similar.  What makes this even a bit different is the time.  It’s been forty-eight years and it’s one brother passing the reins to another.  But as you say, it is a dynastic dictatorship and not unlike what is going on in North Korea today – that was father to son.  I would put the comparison of Cuba in the camp of North Korea.  Those are probably the two countries left that are pursuing a strict Marxist-Leninist policy.  In Cuba I would add one more policy which is a very strict and aggressive and determined anti-American policy.  But you’re absolutely right.  It is exactly the same thing.

Question:  My name is Peter Schaefer.  I’m interested in your comment about the fact that the U.S. government won’t support arbitrary confiscation of land.  That’s a little vague.  I’d be interested in understanding what [off-mike].

Carlos Gutierrez:  We have no plans, no desire to support an arbitrary claim saying this is my property and I want my property back. There is a legal system and that system needs to take hold. We will not be involved in either pushing the legal system or driving it or supporting people.  We don’t think that is an issue.  It’s been forty-eight years and we don’t believe that’s an issue that we put on the table front and center.  That’s what I mean by not supporting, not encouraging – for us, it’s not what we should be talking about. 

I’ll tell you, part of the trap here is that this is what Castro tells his people almost every day – watch out, if you ever are without the leadership of the Castro brothers, they’re going to come over from Miami and Washington in the U.S. and they’re going to kick you out of your home.  It’s just not true.

Question:  Thank you.  My question is more along the lines of – you mentioned policy in Cuba being more important than policy in the United States.  I agree with that, but we do have to acknowledge that there is policy in the United States towards Cuba.  My question is, why has Cuba been targeted or specifically focused on rather than other specific dictatorships in Latin America or even in the world?  For example, Pinochet in Chile, or for example, Egypt’s president, who is actively suppressing the Muslim Brotherhood.

Carlos Gutierrez:  I appreciate the question.  President Bush, from the very first day that he came to office and if you’ll recall his second inaugural speech, was all about spreading democracy and spreading freedom and supporting freedom - loving movements everywhere in the world.  There are degrees.  We know there are countries who have made reforms.  We would like to see more reforms.  But some countries have been going in that direction.

One extreme is Cuba.  China, for example, comes up often.  I go to China often.  There’s an entrepreneurial spirit in China.  You can open up your own business if you’d like.  You can work wherever you want.  People are out working and trying to find a new life for themselves and it’s showing up in the progress and prosperity.  Have they made all the moves that we would like to see?  No, but boy, they’ve come a long way since 1970 and the Cultural Revolution.

Cuba hasn’t done that.  You’re talking about people who can get into a lot of trouble if they invite someone into their kitchen to sell them a meal so they can make some money to feed their family.  It’s very, very restrictive.  This is an extreme of government control.

Aside from that, everything we have seen over forty-eight years suggests that Fidel Castro’s reason for being is to be the anti-American.  Why would we ever feel like we owe something to someone who hates our country?  So he’s made it very difficult to think of any support or reform or policy. 

There’s a big difference between Cuba and some of those – I was in Egypt not long ago.  I walked around the streets, I talked to whoever I wanted, I went to a restaurant.  People open up a business, there are stores.  It’s a totally different feel.  Can reforms still take place?  Absolutely and we’d love to see that and there has not been a bigger supporter of democracy than President Bush.

Question:  Good morning, Mr. Secretary.  My name is Sara Stevens, I’m with the Center for Democracy in the Americas.  I just want to say first of all that I agree with a lot of what you said this morning.  But I come to really different conclusions and I wanted to ask you – a couple weeks ago I was on the other side of town at a conference and heard Mr. Insulza from the Organization of American States speak.  He believes that the majority of Latin America, even though they feel the same way we do about Fidel Castro, really has a problem with our policy toward Cuba and is offended by it, thinks it’s wrong.  With that in mind, I find myself asking all the time what would happen – completely agreeing with you about how President Castro uses our embargo as an excuse for the problems on the island – what do you think would happen if we just lifted the embargo?  What would happen in Cuba and what would the government do there?

Carlos Gutierrez:  I can speculate based on past experience and past actions that because they know that giving citizens a taste of freedom, consumer goods, prosperity, what the free enterprise system can do – that that’s a very dangerous thing.  They have proven that.  They have shown that they understand that that is a very big risk.  I believe they would manage it in such a way that it would have a benefit for them but the Cuban people wouldn’t see it because it is not in their interest for the Cuban people to realize – you know, that U.S. system is pretty good.  That really does work. The U.S. really isn’t an evil place.  It actually helps us live a better life.  They don’t want that.

I don’t know what they would do but I believe they would put in place activities to ensure that Cubans would never reach that conclusion.

Question:  My name is Elizabeth Dunn, and as a resident of Florida I have a particular interest in this subject, so I do thank you for being here.  My question is, in light of the demise of so many communist regimes in the last twenty years, how has Castro managed to continue to survive in power?

Carlos Gutierrez:  It’s a good question.  The system is highly controlled.  It’s a little bit like – you can ask the same question, how has Kim Jong-Il managed to survive in North Korea after his father’s death?  There are tactics, there are ways in which dictators hold on to power.  There are very tight controls.  There are very tight intelligence systems in every single block of the streets.  They call them Committees for the Defense of the Revolution, which essentially is a system of citizen espionage against their neighbors.  It’s a very tightly controlled society.  It’s all designed to keep the regime in power.

I suppose one thing that has helped them is being so far away from the Soviet Union.  It didn’t filter over to them as if they were in Eastern Europe.  But dictators have a way of holding on.

Christopher DeMuth:  Secretary Gutierrez, thank you for coming to AEI and thank you for your presentation.

Panel 1: From Dictatorship to Democracy

Roger Noriega:  Thank you.  I’m Roger Noriega.  I welcome you here to AEI this morning.  The Secretary left us with a little more time so it gives me a rare opportunity to make a few more extended comments as I moderate this panel and open the remainder of the conference today, discussing the future of Cuba.

It is very clear that after five decades of Castro’s embargo on reality, Cuba’s transition will be extraordinarily challenging.  But I think there are several very apparent facts that give us reason for optimism about Cuba’s future.

First, there’s nothing like shedding a worn-out dictatorship to generate a burst of hope and energy in Cuba.  Second reason for optimism is that Cuba is packed with Cubans, people who built a successful country before Castro tore it down and they did so in spite of a dictatorship.  Third, the whole world wishes Cuba well, and its historic friend the United States is poised and as a matter of fact eager to help 11 million people rebuild Cuba in their own image.

But reaching the future requires that we shatter some grotesque myths about Castroism and the manufactured misconceptions about Cuba itself.  Anyone who really wants to understand the Cuban reality should start by understanding that Cubans managed to build a relatively successful nation before Castro wrecked the place.  The sooner the world recognizes the terrible cost of Castro’s revolution, the greater the resolve will be to help Cubans recover from the nightmare of the dictatorship by casting aside every vestige of a regime that distinguished itself only by its cruelty.

Moreover, a fair assessment of pre-Castro Cuba gives plenty of reason to be optimistic.  Making that assessment requires debunking the myth about how a post-Castro Cuba is likely to evolve.  As we ponder how to give Cubans the best hope for rebuilding their country, we must reject the notion that only Castro’s little brother and handpicked cronies can ensure a stable regime.

To begin with, after fifty years of totalitarianism, stability might not be the highest priority for 11 million Cubans.  Raul, moreover, has no more right to make decisions about Cuba’s future than his dying older brother.  The other second-rate hardliners that Fidel has picked to run the place are the first to recognize that they are incapable of inspiring awe or fear or anything else in the Cuban people.  These insiders recognize that the regime is far more brittle than any observer from the outside can imagine.  Corruption, inefficiency, exhaustion and moral bankruptcy have taken their toll on a police state that has long since forgotten what it’s fighting for.  Any support Raul enjoys among Cuban military leaders has to be based on the misperception that he can save their skins by reaching a modus vivendi with the United States.  But this would depend more on U.S. forbearance than on Raul’s stature or talent.

It would be an extraordinarily tragic irony if the United States were to move to accept Raul’s offer of a “dialogue” because pretending to discuss Cuba’s future with a thuggish junta would confer undeserved legitimacy on Castro’s political heirs and sully U.S. credibility with the very democrats on the island who should and I submit will very soon be running Cuba.

To frame today’s discussion, I hope we will focus on a couple of important questions.  What is best for U.S. economic and political interests and how can the United States help?

I should say at the outset that I believe there is little to gain by having a debate about U.S. policy.  We must focus on what is happening on the island of Cuba itself, as Secretary Gutierrez submitted.  I am confident that U.S. policy will change as Cuba changes.  Indeed, U.S. policy is geared to help inspire those on the island who want Cuba to change.

In recent years one of the most compelling arguments for maintaining U.S. sanctions on Cuba has been to preserve the normal economic and political relations as a lever to use with a transition government.  That is to say, a government or group of people who are actually committed to delivering on the legitimate aspirations of the Cuban people for genuine change.  The forces of the status quo are very strong and it is essential to offer an incentive to the Cuban people to help ensure that reforms will be deep enough and broad enough to put Cuba on an irreversible course to genuine freedom.  Making unilateral concessions to a regime whose leader is literally drawing his last breath really makes no sense, particularly since that regime has no legitimate claim to power and we would be squandering our influence and credibility.

Instead the U.S. government should offer the promise of normal economic relations as an incentive to those forces in Cuba committed to essential change.  Contrary to some misperceptions, U.S. policy does not impose unreasonable demands.  It simply asks the government to commit to democratic elections, to release political prisoners and to dismantle the police state apparatus.  There is no other country in the Western Hemisphere – with the possible exception of Venezuela – that could not meet these very low standards.

What specifically can we do to help?  The United States should expand its pro-democracy programs to reaffirm its abiding commitment to that genuine change.  Any hint that the United States will accept a succession from one dictator to another would hobble the transition and demoralize courageous democrats on the island.

The U.S. government should also take steps to make sure that the Radio and TV Marti are more effective in delivering the message to the island.  For example, it is critical that the airborne transmissions be sustained in the coming critical months and weeks ahead.

President Bush should make a specific pledge of robust aid to a transition.  Although it is more important than ever to preserve the economic sanctions, to use them as leverage as I’ve said, to bring about broad, deep and irreversible reforms, the United States should use the promise of aid, trade and normal political relations as incentives to leverage change.  The compact with the Cuban people that Secretary Gutierrez referred to is an important part of that strategy.

The United States and other friendly nations should organize emergency feeding programs and high-impact social projects to take advantage of any opening in the days ahead.  Programs should be put in place now to train Cuban policymakers in public administration, anti-corruption and pro-democracy programs.  The U.S. business community should be mobilized to encourage genuine change, to organize the rules of the game on the island so that honest people can do honest commerce.

Finally, the Cuban exile community should be enlisted to channel messages to the island, the messages that I just mentioned, and to garner up-to-date information about attitudes and conditions in this delicate stage.  We should design programs now to engage Cubans living abroad to intensify and to continue their engagement on behalf of their people.  It will take the family-to-family contact that I’m talking about here to leach out the toxins of fifty years of hopelessness and self-loathing that have been sown strategically by the Cuban dictatorship.

In short, we should inspire Cuba to be Cuban again.  The message to the Cuban people should be that their future is in Cuba and that their future is now.  They must hear a strong, clear message that they deserve better than a recycled dictatorship and that they can start to reclaim their future by taking back their streets from the secret police and regime thugs.  Cuba’s security forces should be challenged to consider their responsibility to the Cuban nation rather than a dying regime.  They should be made to ponder their personal responsibility for any further abuses they commit against their people.

The United States and other nations should fund credible human rights organizations that can readily deploy to the island and inspect Cuba’s prisons and to establish monitors on the island to detect and chronicle abuses.  U.S. diplomacy must be creative and active.  Our message to the Americas, particularly through the Organization of American States, should be that we must stand together to promote a genuine democratic transition and to act decisively against any bloody repression by an illegitimate regime.  Latin Americans, in point of fact, can lead the way.  It’s ironic that Secretary General Insulza’s words are cited here that Latin Americans agree with us that Castro is a dictator and a bully but you don’t hear any of them saying that.  You hear criticism of U.S. policy but you don’t hear any alternatives being offered by our friends in the region.  So if they want to lead the way, they have to exercise some leadership.

Finally, we should ask Castro’s friends in Madrid to offer his cronies asylum to prevent bloodshed.  That can happen today.  I think one DC-10 flying out of Havana can make a remarkable amount of difference.  They can even take some of the achievements of the revolution along with them, in the suitcases and briefcases full of cash no doubt.  We should advise those in Caracas not to interfere with the aspirations of the Cuban people.  Cuba should be run by Cubans, for the good of Cubans under rules set by Cubans. 

Cubans should never have been forced to live under a communist constitution written to appease Soviet masters.  They should not be expected to “hold things together” for the convenience of even well-meaning foreigners.  History will judge harshly those who failed to seize this moment to bring democratic change to Cuba.  The Cuban people themselves must rise to the challenge by overcoming their fears and claiming their future.  Before they can build their future, they must bring down the vestiges of a decrepit Castro regime. The responsibility is theirs but their friends can help with a series of bold and constructive measures.

AEI has organized a conference to help us ponder the opportunities and challenges and to shape our strategy for supporting a democratic change.  The panelists today will discuss “dictatorship to democracy” – what are the rules of the game that we need to help Cubans put in place?  Then transforming society will be discussed at the second panel, focusing in particular on some of the contributions that can be made by the Cuban-American community in transforming society in a deep and transcendent way.  Finally, transforming the Cuban economy will be discussed at a panel this afternoon, where we will I hope focus on the imperative that U.S. business should use its leverage to encourage real change rather than seek sweetheart deals with a regime that is drawing its last breaths.

Our luncheon speaker will be Caleb McCarry, the very decent and honorable public servant who serves as the coordinator for Assistance to a Free Cuba that has the role of identifying how the United States can help the Cuban people as they identify for themselves their priorities in changing reality on the island.

Our first panel, “Dictatorship to Democracy,” will give us an opportunity to hear from two important leaders in the struggle for democracy – not only in Cuba but globally.  We will first hear from Jose Antonio Font about some of the immediate challenges on the island of Cuba today, with which he’s intimately familiar, and then we’ll ask Georges Fauriol to reflect on his experience about global winds of change and democracy and how we can help realize those opportunities for the Cuban people today.

First, Jose Antonio Font is manager and president of the American Capital Partners and founder of the Alliance for Democracy, a Washington, D.C. and Miami-based organization that early on advocated policies to achieve the build-up and empowerment of the dissident movement and the development of civic and political democratic leadership at grassroots levels in Cuba.  Throughout his life, Mr. Font has served in many other pro bono capacities in the promotion of political democracy for Cuba, such as taking part in the organizational phase of the Plan para la Liberación de Cuba and becoming personal assistant to its founder, Jose Elias de la Torriente, from 1969 to 1971.  He is treasurer and chairman of the Finance Committee of the Latin Chamber of Commerce to the United States, (CAMACOL), vice chairman of CAMACOL Loan Fund, Inc.; and chairman of its newly established Comisión para el Desarrollo Empresarial de Cuba.

Jose Antonio Font:  Good morning.  First, I want to apologize.  I’ve been living now for eight years in Miami and my English has deteriorated significantly.  So bear with me.

Secondly, I’m getting old and I forget about concepts so I’ve written down things I want to say and have practical context.  So it’s the poetry of my presentation is not there but hopefully we can come to a meeting of the minds on specific programming that could be helpful to the mission of moving from dictatorship to democracy in Cuba.

At the invitation of my esteemed friend, Ambassador Roger Noriega, I am honored to join you at the American Enterprise Institute to address the challenges of establishing the rule of law and democracy in Cuba.  My presentation will touch on three programmatic strategies that I consider indispensable in advancing the goal of actually ending the totalitarian regime in Cuba and if adopted may help close what I perceive to be a policy gap in the mission of moving from dictatorship to democracy in that country.

These strategies address a political reality, for increasingly we understand that even if the maximum leader of Cuba relinquishes final power, regime change at that moment is no longer certain.  Indeed, until recent times the policy miscalculation that many of us shared was in assuming that the Cuban totalitarian regime would collapse upon the death of Fidel Castro.  I should pause and recognize Dr. Mark Falcoff, for if my memory serves me right he was the first scholar to say to all of us, hey, wait a minute – succession is a real possibility in Cuba.  He printed that in his book “Cuba” – something and something, I don’t remember.  But he was very prescient and he was the first person I ever heard forewarn us about that changing political reality.  Which is that emerging reality that there is a totalitarian regime in Cuba that may not change even if Castro dies and that in fact a successor regime is completing the takeover of power in Cuba.  We will not stop it from growing in new directions, unimaginable ones, unless we confront it at all levels and hard.

This policy miscalculation has naturally prompted our programming to focus on the future building requirements of a free society for Cuba while limiting the attention we place on strategies and activities necessary for that society to achieve actual site control.  We need to increase our reach inside Cuba to the people of Cuba if we are to help them achieve regime change, and in the absence of military alternatives, following our three obvious strategies that we should expand and implement with vigor.  Please keep in mind that this is a first draft, a foundation for discussion.

One, expanding communications with the Cuban nomenclature.  The most plausible short-term possibility for regime change in Cuba is for the Cuban nomenclature itself to make it happen.  Assuming a breakdown in discipline upon the death of Fidel Castro, the time is ripe for sustained communications with those who may be identified as reformers, willing to support a transition to democracy.  Numerous types of cutting-edge activities can be organized and implemented in support of this strategy and probably some already are.  I will refrain from elaborating on these but to say that the best strategic and operational minds available for this task must be fully supported on a long-term basis with ample resources and unfettered of bureaucratic interferences.

Two, advancing the buildup of a democratic opposition in Cuba able to take charge of regime change, transition and reconstruction tasks.  In my humble opinion, the genuine transition that dismantles the vestiges of a police state and command economy in Cuba will not happen until we are able to strengthen significantly the capacity of a critical mass of individuals who will organize and develop as agents of democratic change, committed in mind and spirit to the rule of law and representative democracy.  The history of humankind is full of examples where great ideological and spiritual transformations came about after decades of study and character formation, leading to effective organization and action by a selected minority. 

A system based on fear prevails in Cuba, which precludes change.  Only resolute courage and clarity of vision can obviate psychological paralysis and the sense of impotence that permeates the Cuban population today.  That courage and vision only emerge from the heart and mind of those who have found a calling, who are committed to an idea, and have developed a roadmap on how to achieve their individual as well as national political objectives.  I cannot overstate my belief that a systematic organization and forging of a democratic opposition structured anonymously, underpinning known vocal and public opposition leaders, is the critical element missing in U.S. policy programming toward Cuba. In order to help achieve regime change, man the many responsibilities involved in the transition and reconstruction phases, and sustain democracy in that nation over time.

Three, organizing for regime change and adopting the will to win.  Simultaneously or sequentially to the formation of democrats, we must facilitate participation in regime change and transition activities through coordinated or even spontaneous action.  To date, the Castro regime has proven draconian in crushing all possible opposition and successful in permeating any group that may confront it.  Whatever isolated instances of peaceful rebellion have arisen in Cuba are squashed by brigadas de respuesta rápida or actos de repudio at their inception.  Mostly a general lethargy and a lack of hope about the possibility of change pervade the population.  Notwithstanding this reality, it is my expectation that the one critical element that will deteriorate upon the final demise of Fidel Castro is the regime’s ability to counterattack, to counter offensives from an emerging democratic force, as it organizes and gains critical mass.  The master despot will be dead and others will not be able to defend the system over time.

It is imperative therefore that we enact a more proactive policy for change, together with the appropriate mindset and will to prevail.  I should say something, that in this room there are two individuals – one is Frank Calzon, who is the dean of the Cuban activists– no, I should say, Ernesto Betancourt is the dean of the Cuban activists and Frank is the dean of the Cuban active operators in Washington.  And Orlando Gutierrez, who with the International Republican Institute has been the organization that has most worked in this connection of fomenting the organization and movement of democratic action inside Cuba.  So things I’m saying, it’s not that they’re not being done.  But we need to redouble, re-triple, re-quadruple our efforts in this connection.

We are conditioned to passivity in this front by fifty years of failure to achieve regime change in Cuba because we faced a very strong historical reality.  The Cuban regime remains untouched.  I should also say untouched by this aspect, where implementing important economic policies that helps to constrain its capacity to do damage in other places.  But we can no longer afford to dabble while Rome burns.  Cuba has won the international propaganda war.  Millions of minds across continents, including Africa, now believe that the end of American democracy is inevitable – this would have been unheard fifty years ago but there’s a huge amount of people out there in the world who are waiting for us to collapse.  We’re at war and we must expand our capacity to mobilize and destabilize the successor regime in Cuba.

Recommendations.  In support of the three strategic priorities presented, Bush and the congressional leaders should act on the following funding goals. 

A) Correlate Democracy Act funding with regime change objectives.  The Clinton Administration and now the Bush Administration have kept up economic and diplomatic pressure on the regime in very successful ways.  However, in addition to Cuban Democracy Act-funded programs, as managed by USAID, in favor of humanitarian assistance, human rights issues, news and information, and studies, we should also focus on regime change.  I believe the current civil society development through information dissemination strategy can use that support in order to achieve regime change in our lifetime.

B) Fund and manage moving from dictatorship to democracy initiatives under a specialized task force for Cuba.  Consider funding and managing new initiatives involving regime change and democracy-building and transition and reconstruction planning under the auspices of a specialized strategic task force with the full support of the president, the secretary of state, the secretary of commerce and collaboration from agencies that can contribute logistically, including USAID.

C) Fund the three strategies proposed.

1) Fund the Democracy Education Center of the Americas to advance: a) the formation and organization of democratic leaders across the hemisphere, focusing on Cuba, coordinating with and incorporating the participation of bipartisan policy interests; and b) the selection, training and future deployment of students into transition and reconstruction work.  Of particular importance to Cuba, I would like to underscore that when the moment arrives to achieve the transformation of the Cuban state, the determining factor will be the people who man the ministries and are entrusted with implementing the plans.  We’re many miles away from having the human resources in place with the value systems and know-how that can ensure a genuine transition.

2) Fund strategy and action plan that targets the monolithic character of the nomenclature and provides incentives for reformers to accept and implement regime change.

3) Fund additional regime destabilization work inside Cuba and overseas with full logistical support able to empower the Cuban people to confront and minimize the repressive capacity of the regime.

Final words.  We’re at war.  The war is about stopping the production of terrorists and enemies of the United States and increasing the production of democrats allied to the United States.  This is achieved through education.  Cuba, as an incubator of enemies to our way of life, it behooves us to launch an ideological democratic insurgency, marketing representative democracy, in all neighborhoods inside the island of Cuba and in Latin America.  This one-hundred-year endeavor should also address the inequities that perpetuate poverty in Latin America.  We must attend to the unproductive distribution of wealth in the hemisphere in order to energize democrats across the world. 

I am very grateful to the American Enterprise Institute for convening this meeting and to Ambassador Noriega for having invited me.  I am a strong believer in the catalytic importance of strategic meetings such as this one that help to unify our collective vision about issues such as moving from dictatorship to democracy in Cuba, that are a part of our American quest for expanding democratic values and know-how worldwide.  Thank you.

Roger Noriega:  Thank you very much for that very insightful and action-oriented presentation.  Our next speaker is Dr. Georges Fauriol.  Dr. Fauriol has been senior vice president of the International Republican Institute since October 2001.  His responsibilities include strategic planning, program development and long-term evaluation.  He also served as vice president of strategic planning and acting president of IRI in the summer of 2004.  Before joining the staff of IRI, Dr. Fauriol participated in many of the assessment missions of the organization as well as training workshops and election observation missions beginning in the late 1980s. 

Fauriol was previously director and senior fellow of the Americas Program at the Center for Strategic and International Studies, a small little operation across town, right?  Are they still in operation?  K Street. Right.  He was also senior scholar specializing in Western Hemisphere issues, including topics pertaining to the Caribbean, Mexico, Central and South America, Canada and – the most important country in the hemisphere – Haiti.  Right. Additionally he was the Mexico Seminar course chairman at the U.S. Department of State’s Foreign Service Institute from 1992 to 2000.  He co-chairs the Americas Forum, a Washington, D.C. network of hemispheric policy professionals.  He is a board member of the Florida Association of Voluntary Agencies for Caribbean Action and a research council member of the Center for a Free Cuba.

Georges Fauriol:  Thank you, Roger.  It’s a pleasure to be here this morning at this very timely program on the future of Cuba.  It’s also good to be with again Jose Antonio Font.  We haven’t seen each other for a while but it’s good to be here with him on this panel.  I have something of a luxury, partially because of Roger’s request, and we’re at the beginning of a panel of a day-long conference on Cuba and my task is in some ways not so much to talk about Cuba but perhaps to place the various scenarios or thoughts that one may have about transition in Cuba in a more global context. 

The best way to do that is to look at experiences elsewhere and around the world.  If the meeting had been held maybe ten or fifteen years ago, the repertoire would have been somewhat more limited.  For better or worse at this point in 2007, we have much to look at elsewhere around the world.

I have just for the sake of this presentation identified eight challenges, if you will, to political transitions and democratic transitions, mostly of an operational and political nature.  Also I start off with two overarching keys, thinking about transitions.  I think if we went around the room we’d have a list which would get longer and longer and include a whole series of other very relevant issues, including some of them I suspect will be discussed later today, including economic policy and trade policy issues.

The eight challenges are the following, and I’ll come back to them a little bit individually with some detail.

The first is that new regimes, when they do take hold of office, are often coalitions of groups and individuals.  The biggest problem they often face is to stick to the program, whatever that program is, and very quickly that begins to fall apart.

The second challenge, which is significant in an emerging democracy, is the absence of viable political parties, the key instruments that in effect represent the interests of the people and adjudicates that in the context of governance.

A third challenge is in some ways related to the first two, which is that in-fighting very quickly develops among the winners of that transition.  Very quickly, personality issues, other kinds of interests, begin to emerge.

A fourth challenge is essentially what happens, and may be relevant in the Cuban case in particular, what happens when the rules of the game are in fact controlled – you have a controlled transition.  Elections are held under some apparatus which sounds democratic but in fact the rules of the game are skewed.

Five is the important role, and very difficult obviously to quantify or analyze, the very important role of leadership.  Some countries have it easy, others simply seem to have bad luck.

The sixth challenge is establishing a culture of rule of law.  Specifically, in the beginning phase of a transition, looking at a transparent electoral system and a legal constitutional structure to back it up, the timing here is the real challenge.  These issues obviously often happen further down the road rather than at the moment of transition.

The seventh challenge is the need for leaders to listen to what the public out in the streets has to say, what their preferences are.  Important in an environment where often public opinion has in fact counted for very little.

Finally, an eighth challenge which is in some ways associated with a transition’s international environment, and this is where discussion about the role of a diaspora ultimately comes into play as well as other issues.

Cuba is somewhat unique, as we already have heard a thousand times, partially because of the longevity of Fidel Castro’s dictatorial rule, and as a result there’s something of a cottage industry that has developed and attempts to anticipate the various permutations of what a transition ultimately might look like and what its needs might be, particularly for government policymakers.  Even IRI has contributed to this cottage industry, perhaps optimistically back in the mid-1990s issuing a Cuba Transition Resource Guide, this little pamphlet that’s been out there.  This little publication makes one point that is particularly relevant still today and suggests a certain degree of caution in our deliberation about impending change in Cuba.  To quote the publication directly, “The study does not seek to plan the transition to democracy in Cuba.  That is something that only Cuban people can accomplish on their own.”  This is a useful reminder that outsiders, whether governments, private citizens, business groups, activists of various kinds, can encourage – in fact, in some ways morally should encourage – transition, support change, work to smooth out difficulties in that process.  But the end product of a transition is the collective work of Cuban citizens themselves – Roger, in his comments, alludes to that, and also in his publication.

Whether it’s the Chilean ouster of General Pinochet or the 2004 Orange Revolution in Ukraine that overturned fraudulent elections, the real organizational work toward transitions was done by mobilized citizens who wanted change.  That’s what ultimately makes the difference.  It’s not foreign governments, it’s not foreign NGOs, it’s not the impressions of the media – although they all play a role.  The action is with the people themselves.

There are two overarching keys to thinking about and managing democratic transitions.  The first one is obvious, I suspect, to all of you but bears repeating here.  Democratic transitions, as I’ve hinted, are ultimately homegrown.  Outsiders can play a role in helping the process but they cannot achieve much without the courageous heavy lifting of the country’s own citizens. 

This sort of leads to two corollaries.  First, despite some current conventional wisdom or perceptions, particularly in this town, about democracy, that democracy cannot be exported.  It’s not something that is manufactured in a plant in New Jersey or South Florida, waiting to be shipped to places like Cuba to replace the Castro brothers’ police state.  Democracy requires local individuals and groups willing to make it happen, sometimes at extraordinary risk.

The second corollary is that if democracy cannot be exported, how can transitions be supported from the outside, notably in the case of Cuba?  Although it’s not evident in the debate, particularly in Washington and elsewhere around the country, about Cuba policy, there is a consensus which essentially suggests that the answer to the question is the word “engage.”  We all want to engage in some fashion.  But the divide is profound on what that ultimately means operationally.  Some want to embrace the government, perceived to be evolving or mutating toward some uncertain new political character – presumably better than the current one – while others want to connect with the people of Cuba directly, on the assumption that the needed elements of a free society lie ultimately in the hands of individuals able to organize and prioritize their interests.  I happen to believe that the latter option is probably the more productive one in the long run.  Yet sooner or later I suspect that these two perspectives, these two approaches, will converge and generate productive ends of benefit to the Cuban people.

The second overarching key about transitions suggests that getting rid of the dictator is hard enough and certainly worth a couple of mojitos, but the hard job of democratic governance actually begins at that point.  Eventually one comes to the realization that winning the prize, if you will, and ultimately down the road winning an election is not quite the same thing as actually governing.  This is often where things fall apart.  The enthusiasm of the transition hits the reality of leadership and political management.  The absence of any free political process in Cuba for close to half a century, and a less than perfect process prior to 1959, suggests some considerable uncertainty – or at least careful study of this particular process as we look forward.

What do transitions elsewhere around the world tell us?  This sort of brings me back to my eight challenges.  I tend to start with the process in Eastern Europe in particular in the late 1980s and 1990s.  Communist governments were overthrown.  A little bit later in the 1990s in the Balkans.  This did not so much generate, I would argue, a wholesale change of leadership as much as in some cases a recirculation of some of the same elites and eventually a succession of elections to work out who ultimately would win this process. 

In some cases this process initially gave rise to a political illusion, an illusion of civil society ultimately being in power.  Solidarity in Poland is a good example of that, or the Civic Forum in Czechoslovakia.  These quickly sort of broke up and reflected the greater realities of politics in those countries.  The heroism of the individuals at the time of transition and the role that civil society played in that transition does not always translate into the necessary needs of running a country politically.

There are some other examples, perhaps more interesting and revealing.  The case of Estonia, which ultimately favored radical reforms under an interesting principle – taking care of politics first and then proceeding to economic reforms under initially Prime Minister Mart Laar.  In quick succession this led to a new constitution, free and democratic elections, and then a program of dramatic economic liberalization.  The initial political outcome of that was that Prime Minister Laar  was voted out of office.  Yet by 1999, the reforms were sufficiently solid that succeeding governments could really not deviate from this process of reform and as it turns out, the prime minister was reelected in 1999.  So it’s an interesting example.

Alternative experiences gave rise also to more anarchic, more drawn-out transitions.  Particularly true in the Former Yugoslavia and various parts of the successor states of the Soviet Union.

The number-one challenge facing all of the regimes that I’ve just mentioned, particularly those in Eastern Europe and the Balkans – Slovakia, Serbia, Croatia – is at the time of transition and right after transition sticking to what I call the program.  In the pre-transition period, these coalitions ultimately agree to little besides needing to ouster the autocrat, the dictator, whatever the case might be.  Once they’ve accomplished this goal and taken power, they quickly find themselves at odds over all matters of policy, legislative and other kinds of issues, including economic policy issues.  Economic reforms prove particularly challenging because the coalition includes sometimes diverging ideological views of how to manage society, from left to right, from social democrats to conservatives.  Privatization issues rise to the surface and ultimately the process sometimes breaks down.

A second challenge is often the absence of political parties.  It’s difficult to visualize the process of democracy without that important intermediary actor known as political parties.  Again, in the Eastern European examples, while there may have been Christian Democrats, Liberals, Social Democrats in name, the reality was that these parties were often little more than vehicles for personalities.  I suspect that would be an interesting issue to watch in the context of a transition in Cuba. The lack of ideological coherence means that principles are rare, leaving politics to the arena of personalities and patronage.

The third challenge is in fact a combination of the first two.  With no clear program and weak political parties, you end up with in-fighting fairly quickly of the worst kind.  I’ll shift hemispheres, looking at a couple of examples elsewhere.  In Kenya, in the surprise succession that occurred in late 2002, the coalition that formed to oust the Moi regime from power actually quickly fell apart as they all tried to get their hands on the spoils of power.  They sought power not necessarily for democracy’s sake but out of jealousy of what Moi and his tribal kinsmen had their hands on, in terms of economic issues in particular and state assets.  Which later on and more recently explains why the succeeding governments have not had a very strong committed attitude toward anti-corruption issues, for example.

The lesson here is that sometimes democracy is unfortunately a convenient means to a not necessarily positive end rather than a driving force between a change of power.

The fourth example relates to a sort of controlled transition.  Here I’ll use maybe an unusual example but I think it’s intriguing, and that’s Uganda.  A controlled process in the last three or four years, in effect of an authoritarian style of government.  This came about in various ways, particularly after 1986 when the governing party in the government of President Museveni essentially established a no-political-party system.  Finally under pressure reversed himself for the elections of 2006.  However the process quickly was derailed, with the jailing of the main opposition leader four months before the elections of February 2006.  In fact the elections themselves were scheduled only seven months after parties had in effect been legalized, giving almost no time for people to get organized.

The Liberian experience highlights the fifth challenge and that is the issue of quality of leadership and the unique role this can play in any transition.  It’s the most unpredictable variable that you can find.  As I said earlier, some countries seem to have it and other countries simply have a run of bad luck.  The lesson here is to underscore the importance of a strong and popular executive.  In the case of Liberia, a highlight represented by Helen Johnson-Sirleaf, the first woman elected president in Africa, who thus far has been able to hold off some of the former regime’s cronies who have also openly threatened at times to stage another coup d’etat.

The popularity of the executive depends very much on their ability to deliver on the promises they made during the campaign.  That becomes a real issue in a country that in fact was devastated by ten, twelve years of civil war.  The danger here is that leaders thrust to power promising substantial development change may not have the means to accomplish these changes, and when they fail it gives the opportunity for alternative and less democratic forces to replace them.

The sixth challenge is to set out and ensure transparent, effective and durable electoral process and the legal structure to back it up.  In many cases this sort of mouthful of what I’ve just said is an anchor obviously to a viable democratic process and does not occur over time.  As I said earlier, the timing is usually wrong.  These things are not in place when the transition occurs yet respect for law and the rules of the game become very important in any transition process.

To go back to the Ugandan example, the main opposition leader was not only thrown in jail prior to the 2006 elections but since the court system in Uganda was largely controlled by people close to the government, any of his appeals were ultimately rejected and he never made it out of jail before the elections.

Ukraine in 2004, in the Orange Revolution, perhaps provides a better example of ultimately a more positive experience, particularly in connection with fraudulent first round of elections in late October, early November 2004 and the role that the country’s electoral and constitutional courts ultimately played in the outcome of this issue.  Why?  To a degree, the legal system in Ukraine had been influenced by several years of constitutional and electoral law reform, starting in the mid to late 1990s, in which Western norms of law and transparency were part of the work that was done with Ukraine and institutions.  There the role of international organizations and NGOs in Europe and here did play an important role.

Lebanon more recently is another example where a skewed electoral process ultimately cannot be in many ways entirely a step forward, particularly when there is this pressure, a sudden transition, an unexpected transition from authoritarian or totalitarian rule to democracy.  In the recent transition in Lebanon, the street movement’s sort of result of the withdrawal of the decades-long Syrian occupation and demand for relatively quick elections meant that the basic system that had in effect brought Lebanon to another crisis was ultimately the only system that was in place to run elections.  So the electoral system in use in 2005 still had the same limited specific issues related to sex and confessions for particular jobs, including the fact that the president can only be a Christian.  So here you have an example where the electoral system was designed for the past and not the future of the country.

The seventh challenge is particularly critical in any emerging democratic environment.  That relates to getting political leaders to listen to and respond to citizen concerns.  In other words, to challenge the public opinion in a society whose political experience has found little use for it until then.  In fact, where governments are downright suspicious of it to the point of finding it necessary to create a parallel universe of communications with their citizens.

I’ll use the Ukrainian example again because it highlights what communications with citizens ultimately can play, the role it can play and how important it is.  In the lead-in to the 2004 election, polling data ultimately done in 2002 for the parliamentary elections and prior to the 2004 presidential elections ultimately showed to the opposition leader, Mr. Yushchenko and others, that they were in fact – that he was in particular the most popular figure in the country and therefore represented the best chance for victory, thus setting in effect the stage for the popular challenge to the fraudulent elections in late October, early November 2004.  Interestingly enough, this did not prevent this newly elected coalition in 2004 and 2005 from stumbling over some of the challenges I mentioned earlier, which is first of all not sticking to the program, and the third challenge of in-fighting among the winning coalition.  That very quickly developed and we all saw the results, with in effect Mr. Yanukovich, his opponent in the 2004 elections, coming back into office as prime minister recently.

The last challenge relates to transitions and their international environment.  In practice, I think this has two facets relevant to Cuban prospects.  The first is managing the input of Cuba’s energetic diaspora.  Experiences elsewhere provide diverse case studies and frankly no clear pattern of what to learn from these experiences.  In the case of Central Europe, with the exception of the Baltic states, the diaspora has been largely unhelpful.  It’s supported the last remains of some of the more dictatorial governments in the 1990s – Mr. Machiar, Tudjman, Milosevic in Serbia – viewing them as Croatian or Serbian patriots, I think is often the word that’s used in describing these people by members sometimes of the diaspora.

The Baltics, in contrast, were somewhat exceptional.  An American and a Canadian returning to serve as presidents of Lithuania and Latvia, respectively.  But elsewhere in the region, those who had remained in the old country largely rejected diaspora figures when they entered the political arena.  The thought was that they were out of touch with the situation on the ground after fifty or more years of separation.

Elsewhere one might look at the evolving Middle Eastern situation.  Iraq, for example, arguably has a sensitive issue with the role of the diaspora in Europe and in North America and there are already emerging arguments as to whether that diaspora has contributed to the current situation in a positive manner or not.  I think there’s not enough that is known about these experiences, since they are in fact just occurring now, to provide clearer guidance.  But certainly it’s worth further careful study.

Finally the second aspect of the international dimension of transitions relates to Cuba’s own accessibility benefits from regional multilateral institutions’ resources and political norms.  This ranges from the OAS’ Democracy Charter and what it means for a Cuban transition, all the way to existing political and economic arrangements, including CARACOM and other regional agreements.

Europe offers potentially an instructive experience.  Europe has the specific benefit of the European Union and NATO, and for reformers and their supporters, joining these institutions has been a magnet.  It enables politicians to force through on popular reforms and provide badly needed financial aid to do so.  I think this has been an incentive in the European context.  What sort of similar incentives could be offered to Cuban reformers is an interesting question to look at down the road.

Clearly as Cuba moves toward democracy, any government ensuing from this process will face a number of practical and significant challenges.  I hope what I’ve just said has been useful to this discussion.  Thank you.

Roger Noriega:  Thank you very much for that presentation, Georges.  It was what I expected and met my high expectations for your work.  We will have time for questions.  As you get ready to do that, and I encourage you to be creative, let me ask one important question and I’m not sure either one of you would hold yourselves up as an expert on this, but when you talk about Cuba in particular, you have this police state apparatus.  We hope, and I hope we’re not being too optimistic in doing so, that the Cuban people will take advantage of openings and fill that space, starting with filling the public square and claiming their streets and challenging this security apparatus. 

An interesting question, both in terms of how that might evolve, is the role of the military and whether the military would operate in a monolithic way in repressing the Cuban people who would be out there claiming their future upon Castro’s demise.  Also the military has a longer-term role because it’s claimed about 40 percent of the tourism industry and will have a terrific amount of largesse.  As a matter of fact, any successor or transitional government will probably have to reach some kind of a modus vivendi with the military.

What I’ll ask you both, if you would be willing to comment on pieces of that issue.

Jose Antonio Font:  You have certainly focused on the one institution that is the deal-breaker or maker for a successful transition in Cuba.  I don’t have an answer for that.  I believe it will depend on the stage when there’s a possible confrontation with the regime by the population.  There’s an excellent book by Josep Colomer that studies the transition to democracy in Spain.  It lays out very scientifically all the pieces and the timings when transition is possible.  Ernesto wrote something like that early on also. 

Without doubt, the change will need to come from the armed forces.  That is my opinion.  Without the armed forces’ acquiescence, there’s not going to be change in Cuba.  Part of what I’m proposing is that we pay a lot more attention to do situation analysis of who’s who in the armed forces, what interests are there, who has proclivity for change – we don’t know enough.  Maybe the intelligence agencies know enough but as practitioners we don’t have that capacity.  We need to understand what our field of action is going to be more clearly with the armed forces and hopefully from the middle ranks the one or group of people who are going to at some point make the change will emerge, and/or through our communications condition a non-violent action to the Cuban people as one of the prerequisites that we all, as Americans and Cubans, expect.

So there’s a lot of work to be done there.  When I spoke about the nomenclature, I was really pointing to the armed forces.

Georges Fauriol:  Maybe two or three little speculations.  My sense is this question about the role of the military will change once the two Castro brothers have faded from the scene and are gone and buried.  I think the allegiance of the military and the security structure is very much associated with not only brother Raul but Fidel and the people around him.  The passing of these individuals from the scene begins to change the dynamic, particularly the sense of commitment – not to the revolution but to the persons, the individuals in this case.  I think after that – not so much that all bets are off but it brings to the surface potentially other military actors with different motives.

That brings my second point, which is that the significant role of the armed forces in the economics of the country is kind of a double-edged sword.  On the one hand, it very much falsifies or skews the reality of the Cuban economy in a transition and the period right after transition, when you have these sort of pseudo-institutional, quasi-military players in effect having acquired not only because of the previous regime but in this transition having acquired resources and playing potentially a role in this regard.  But it’s a double-edged sword because it also brings up issues of corruption and bargain-basement kinds of quasi-privatization initiatives where those in the know will ultimately take advantage.  We’ve seen that elsewhere – in Russia and the Former Soviet Union, to very detrimental results.

Finally, and there are others in this room who know about this probably much more, in looking at militaries, I think in transition one looks at maybe two layers.  One are the lower ranks.  At the end of the day, if there is a conflict with people in the streets, they’re the ones who have to do the dirty work.  Very often that’s where you see the beginning of the undoing, if you will, of the unwillingness of the military to do those things.  Also the role of the intelligence community within the Cuban armed forces.  Those people know a lot, like every intelligence service in the military.  They often play a crucial role since they know more than anyone else mostly and have incentives at times also to protect their own future.  They sometimes can become the go-between in some difficult situations.

To refer again to the Ukrainian case, in effect some of those individuals in the Ukrainian intelligence and security services played an important role in relaying messages between the government and the opposition at these crucial moments.  Those individuals are not to be trusted on one side but also not to be underestimated on the other.

Roger Noriega:  Good.  Questions?

Question:  The elephant in the room that has not been mentioned at all today is Hugo Chavez.  The question would be: will Castro’s passing really have any impact at all with Chavez ready to maintain the Cuban revolution as sort of the father of the Bolivarian revolution?  He’ll put all the money in to maintain stability there.  So my question is, will Castro’s death really have that much impact?

Jose Antonio Font:  When I mention unimaginable directions that the new succession government is going to go, one of them is this one.  It’s a new phenomenon.  Venezuela is now sending 100,000 Venezuelans as tourists to Cuba.  There’s a practical integration of sorts between the two societies because they are going for the alternative way of life under the totalitarian control of the economy, command economy, etc.  What’s going to lack is the geniality of Castro and the charisma of Castro. 

So in the long term, all this will collapse in my opinion.  But it will not – we cannot just wait for it to collapse because it’s been growing.  Right now it’s growing.  It’s Bolivia also, it’s Ecuador.  And with justification because the key element that is missing in Latin America is access to capital by entrepreneurial spirits.  It’s as simple as that.  Until our foreign policy starts looking at the multinationals and really focuses on mechanisms – not micro-loans.  They’re good. We’ve got to do micro-equity and that’s a whole calculation that has to be worked up. 

But that to me is a strategy to counter, together with our, yes, selling our representative democracy ideology, that’s going to make it.  We cannot sell democracy through ideology alone.  People have to live, make a living.  So as long as they are selling to the populations that idea that through the revolution they’re going to have a better future and we’re not, they’re going to expand.

Georges Fauriol:  I agree with you, let me just add something.  I think without the current political arrangement, including the Castro brothers, I think the welcome mat to Venezuelans in Cuba may kind of disappear fairly quickly.  A sort of Cuban nationalism will rise to the surface.  I was at a conference recently and if I can reproduce the joke which apparently is making its way through Havana, it’s that Venezuelans think – I don’t want to offend anyone here – think they’re Argentines but act like Panamanians.  Which I suspect is not a compliment. 

The issue with the current Cuban government, when it disappears I think it actually takes the air out of a lot of what Hugo Chavez is trying to do.  He desperately in some ways needs Castro to stay alive and provide some historical legitimacy to his interpretation of the world.  His ability to support the Cuban revolution as it presently stands is a way in fact to make him important.  You take that element out of Chavez’s sort of chess game and I think something is lost there.  Suddenly it becomes Chavez and only Chavez and that’s not all that pretty.

Question:  I’m Francis Gorbachevsky.  I just want to pick up on this last point you made about bringing capital because I’ve spent the last fifteen years with the Enterprise Funds in Poland and Hungary, bringing capital to entrepreneurs.  That was the whole idea.  You’re not going to build a middle class until you have entrepreneurial class.  Entrepreneurial class needs capital on commercial terms.  They need those small business loans, they need equity capital and they need the institutions that can help them get that capital and build the capital.  We created mortgage banks, we created leasing companies, we created commercial banks.  We provided equity capital.  We provided small business loans.  We provided micro-business loans. 

At the end of the day, the Enterprise Funds gave the money back to the U.S. Treasury.  Very few people know that story.  It was the first time that a foreign assistance program returned money to the U.S. Treasury since the Finns repaid the Marshall Plan.  So we built capacity, we trained individuals and the team in Poland raised $1.6 billion in private equity from private institutions to continue pumping money back into the Polish economy.  The Hungarian fund, which I was also with, raised a $50 million fund and then began to wind down and give money back to the U.S. Treasury, bringing people over with their legacy fund to the United States to work in American businesses.  The Polish fund left the largest legacy foundation in the entire region, a $270 million endowment fund now to continue building entrepreneurism.

So that is the exact point.  Throughout Latin America and Cuba, that’s what people are going to need.  They’re going to need capital to put food on their tables and not to carry cement for the big companies that are building or not to be just workers that get a paycheck and go home.  They want to build their own companies and have a stake in their economy.

Roger Noriega:  Are there other questions?  Let me ask one.  I appreciate that intervention and I encourage folks to share in that way, but that’s an extraordinarily important observation.  I think this will be fairly straightforward and both of you can probably comment on this.  What about the idea of elections in Cuba?  Raise some warning flags for us a little bit, Georges, on rushing in.  Certainly the sooner you can give people a voice in their future the better, but you’re talking about a country, as Jose Antonio has pointed out, where there is no real political institutions or political actors really, as we know them.  At the same time I don’t want to underestimate the capacity of people to seize opportunities, as they have in other parts of the world in pretty dramatic fashion.  But Cuba may be different.  I know there would probably be a little bit of anxiety that somehow the vestiges of the regime could steal the march and try to legitimize themselves through some sort of democratic process, sort of the way Chavez has managed to do in Venezuela.

Georges Fauriol:  I think there are two or three items that are worth reflecting on.  One of them I mentioned in my opening remarks and that is the degree to which the existing electoral vehicles and constitutional mechanisms in fact allow transparent and competitive elections to be held.  The answer probably to that is at present, no.

So the question then becomes how to prepare for that, particularly in terms of an electoral – it’s not only the electoral law, it’s the electoral machinery and engaging citizens all the way down to the voting booth to actually participate in this process in a transparent way.  Those things are doable but they do take time.  There are various examples around the world where either because of the international community or actually local domestic pressures there is a rush to holding elections. 

I don’t think there is a fixed answer to that but clearly that’s one issue.

The second one that I think is going to be particularly problematic in Cuba, and we saw that in Eastern Europe and elsewhere, is the role that the principal vehicle in election ultimately plays, which are political parties.  Cuba historically is a sophisticated and political community.  So the issue is not that political parties are not going to rise in the context of a succession.  The issue is going to be who do they and what do they ultimately represent.  You can imagine a political process where you have dozens and dozens of political factions and coalitions that ultimately mean very little. That is a particularly significant issue.

There is a lot of work that needs to be done there and in effect encouraging Cuba’s political leadership and political interests to coalesce around a number of key but not too numerous political party vehicles.  That’s something where the international community can help although, again, there are a lot of important and experienced political actors within the Cuban community, in Cuba and outside of Cuba, that can play an important role.

Jose Antonio Font:  I’d like to mention the following.  In 1991, we completed a blueprint called Project Democracy.  We started distributing that blueprint in the U.S. Congress and with the Clinton Administration.  It called for the formation of democrats.  Richard Nunzio came to be the czar for Cuba policy.  He made a great contribution at that time because the Clinton Administration was split.  The National Security Council didn’t want to do anything about democracy for Cuba and the State Department did want to.  Richard Nunzio closed that gap, becoming the czar for Cuba policy, and in my opinion he was the author of the civil society development strategy for Cuba, which was a great contribution, as the Bush Administration, in my opinion, has been the author of the transition and reconstruction focus.

At that time, we argued with Richard Nunzio on a friendly basis that it was too much of an ambitious program to try to create civil society in Cuba under totalitarian conditions and that we had to focus on the formation of a political core that would be the political parties that could start the process of eventual civil society development, transition, reconstruction.  Because anyone who studies transition and reconstruction requirements knows that it is impossible.  There’s so many things to handle.  What we ought to focus on is the people who are then going to make the decisions that are very complex across the board.

So I underline the response to Roger’s question that we’re lacking – and I don’t have all the answers on how to – but certainly in working with existing political parties and other individuals across Cuba and Latin America in building that democratic force.  Indeed there are some excellent efforts that require a lot of support, like the Movimiento Cristiano Liberación inside Cuba.  They are the only group that has attempted to do a transition plan, which is a nightmare.  But we’ve participated because it’s an important nightmare, because they are doing it.  Apart from them, we don’t see anybody else. 

A last thought I could say is we’ve got to come together, those who are concerned about these matters.  We’ve got to come together, coordinate strategy and focus – my opinion – on the political, the human resource element of all this work of achieving regime change, transition and reconstruction.  We can’t do everything.

Roger Noriega:  On that point, let me make one comment.  Georges in particular mentioned the importance of the international community.  Speaking very practically, I think the international community has an indispensable role to play in organizing elections or essentially holding them, with all due respect for Cuban nationalism and with the aim of reflecting the will of the Cuban people.  From my own personal experience, I would love to see the OAS play that sort of role.  But at this point, for reasons I alluded to earlier, I don’t see the OAS having the legitimacy to step into Cuba because of the deafening silence of the inter-American community and most recently the experience of the OAS in whitewashing the elections in Venezuela in an absolutely cynical and breathtaking way.

So my message to the inter-American community, which is well represented in this city and in this room, would be that they should find a way to redeem themselves a little bit in terms of the Cuban people and speak out now.  Because I think they can play a role and should play that kind of a role.  We have a question right up here, Mr. Calzon.

Frank Calzon:  I’d like to be very brief.  First of all, to Jose Antonio.  There are quite a few organizations and groups in Cuba thinking about the future of Cuba.  I think the Christian liberation movement is very important but there are many others.  I say part of the problem is lack of information on this side but there are quite a few, let me just put it that way.

On the issue of the inter-American community getting involved, a little is being done.  As Roger Noriega knows, the International Committee to Promote Democracy in Cuba, founded by President Havel in the Czech Republic, not only brings together European leaders like Mr. Haznader but former President Lacaze of Uruguay, former President Alywin of Chile, several democratic presidents from Costa Rica and so on.  I took notice of President Arias’ recent statement mentioning the Cuban people.  I’m surprised that when we go to some conference on Cuba the only word that does not appear is the Cuban people.  I welcome your emphasis.

I have a question for Dr. Fauriol.  Your panel says “from dictatorship to democracy.”  General Raul Castro has been the president of Cuba now for over six months.  So I think there’s a little bit of a track record.  He’s been running Cuba.  The question to you is, what reforms, economic or political, what has changed in Cuba?  I notice that three foreign journalists were expelled a couple days ago.  I don’t think that’s changed, more of the same.  But in the larger policy field, in economy, in dealing with other governments, in the level of repression, what could you tell us about the last six months under the new Cuban president?

Georges Fauriol:  I think there’s a short answer to that, which is, not much.  Either that or I’m simply not aware of it.  Let me take your question and go back to one of my opening comments, which I think there’s an interesting dispute, debate that is attached a little bit to the point of your question, which is whether to engage the government as it stands on the assumption that is – I think I used the word mutating, changing its colors, and presumably improving its track record in some fashion, whether it’s on political issues, political opening, economic opening, let alone human rights issues. 

The expulsion of the three journalists you’re referring to, and these were not second-rank publications, these are first-order publications, is probably not a good sign, I suspect, in terms of an indication that the climate is opening and the government is willing to put up, if that’s the right word, with journalists who, from what I could tell, weren’t really all that much critical of the Cuban government as it stands and presumably were doing their job as journalists.  So if your question is for me to kind of outline what has happened, I will either beg that I don’t quite know or maybe make the argument that I don’t think much has happened.

Jose Antonio Font:  I’d like to expand on a comment that Frank made.  Yes, I agree, there’s many other groups in Cuba doing wonderful and heroic things.  My point is strictly in connection with the training, the forging of future democrats in terms of now very practical, of those political parties inside Cuba or outside Cuba that are taking the time to deeply study and practice what’s going to be done.  I can say from the research we’ve done there are three or four excellent guides that no one is sitting down and going over, which are the United States Government Commission for Assistance for a Free Cuba – that needs to be full of bodies and action plans.  Ernesto Betancourt in 2000 wrote an analysis on that plan transformación institutional del estado, the transformation of the Cuban state.  When Roger asks for a genuine transition, Ernesto has done a guide that from every element that he has brought forth, sometimes I’ve come up with eleven additional action plans on how to go and change, transform the Cuban state, the Cuban government.  Who’s reading this?  Who’s practicing how we’re going to win the baseball game?  On top here.  Then Jorge Sanguinetti just wrote an extraordinary blueprint on this same topic.

So what I’m urging the decision-makers in this room is to start thinking that not only do we need to know what needs to be done but we need to have the people in Cuba and outside of Cuba – because one of the differences, I do believe the Cuban-American community is going to play a very important role in the transformation of Cuba.  It’s 2 million people, we are trained.  Just the group out of the Association for the Study of the Cuban Economy, there’s probably ten or twelve minds there that know exactly what needs to be done in the financial areas of transition.

So we’ve got to start coordinating inside Cuba.  We’ve got to start sitting down with Payá.  That’s what I was referring to.  You know, what you’re proposing, Payá, doesn’t make sense because of this, this and that.  We’re not fighting with you, we’re exchanging ideas.  That’s the point I’m trying to make.  We’re still a long ways from making important advance in that area.

Ernesto :  I just want to point out that unfortunately all this work I have done and many other people have done is based on a peaceful transition.  But a peaceful transition requires a government willing to facilitate it.  Contrary to the assumptions of many people, this is what Pinochet did in Chile.  Nobody gives him credit for doing that, but Pinochet held an election and when he realized that the Chilean people didn’t like what he was doing, he removed himself from power and allowed the opposition to come over.  This is not what is happening right now in Cuba.  Yesterday Manuel Cuesta Morúa, the leader of the social democratic group inside the opposition, announced that there was a [indiscernible] that was arriving in Havana, arriving [indiscernible] rather, and the Cubans put him on a plane and sent him back yesterday to Belgium.  This indicates that the Cuban government is not going to relent power and this is then what is going to cause a violent solution.  This is unfortunately not what I wish would happen but it looks like this is something that could happen.

In this case, all the analysis that is being promoted is not going to work, because it will depend on where the power comes.  This is going to come out from the street?  Keep in mind that Castro has completely nullified the student leadership and the labor leadership in Cuba.  That is going to require the emergence of real leadership, I think particularly among the labor forces.  In my opinion, this is one of the areas where the biggest problem is going to emerge from the government because you work in a hotel of the tourist industry in Cuba, they pay you 5 per