Apopular joke in Varadero, a Cuban resort with the only worthwhile golf course in the country so far, is that on the windswept par three eigth hole, you need to point to Key West to reach the green. Varadero is around 90 miles due south from Florida. There have not been two countries as close yet more apart for the last 55 years. Cuba had been eyed for some time by the US, as “the most interesting addition which could ever be made to our system of States” (President Thomas Jefferson 1820). After futile attempts to ‘buy’ the island from colonial Spain in 1854 for $130 million (the ‘Ostend Manifesto’), and again in 1897 for $300 million, the US ousted colonial Spain in 1898 and took control of the island.
In 1902, Cuba attained nominal independence under effective US tutelage. The infamous 1902 Platt Amendment to Cuba’s constitution allowed the US to intervene in Cuban affairs, if needed for the maintenance of good government. Cuba also leased it, in perpetuity, land in the eastern Guantánamo province, which houses a US military base, and inter alia political prisoners. Fidel Castro admitted having cashed his first ‘rent’ cheque for $ 4000 for the Guantánamo base, but filed subsequent cheques every year. Cuba wants the territory back. Fidel did not start out as a communist. He visited the US from Mexico, where he was exiled in the 1950s, to raise funds to overthrow the corrupt Cuban government. He went to New York soon after the revolution, in April 1959 and again in 1960 — he chose to stay in Harlem, where he met Pandit Nehru - but was snubbed by the political leadership.
The US prohibited trade with Cuba in 1960, and in January 1961 broke off diplomatic relations. Political humiliation and economic strangulation, the Bay of Pigs invasion in 1961, the Cuban missile crisis of 1962 and subsequent attempts to assasinate Castro, only steeled Cuba’s revolutionary resolve. The Communist Party of Cuba came into existence in 1965. The US establishment, engaged as it was in rolling back the red tide around the world, could not countenance an active adversary in its backyard. Cuba not only punched well above its diplomatic weight, its rhetoric resonated in parts of Latin America, Africa and elsewhere. Soviet support till the 1980s ensured the rigid communist model survived on the island, and fuelled anger across the straits of Florida.
Sealing off the island
A series of laws passed by the US Congress sealed off the island from the US and much of the world economically and financially. Both sides maintained political contacts through Interest Sections in each other’s capitals. The embargo threatened companies from third countries dealing with Cuba, prohibited normal dollar remittances, restricted shipping links and travel. Reaction to US policies and intervention, and the constant flow of refugees to Florida hardened Cuba’s attitude.
Harsher controls, low salaries and an absence of incentives for an otherwise educated and talented workforce, led to a domestic economic crisis from which the country has yet to emerge. Decades of the absurd standoff were punctuated by annual resolutions condemning the embargo, passed almost unanimously in the UN General Assembly. Latin America stood by Cuba, incorporating it in 2011 in the 33-nation Community of Latin American and Caribbean States. The Sixth Summit of the Americas in Cartagena, Colombia in 2012 ended without a political declaration after several Latin American leaders claimed they would not attend the next (Panama April, 2015) if Cuba is not invited. Cuba was expelled from the Organisation of American States in 1962 at US behest. Host Panama has invited Cuba and President Obama now looks forward to its presence!
The historic announcement by President Obama on December 17, after an earlier telephone conversation with Fidel’s brother and successor, Raúl Castro, calling for a “new chapter among the nations of the Americas”, coincided with the reciprocal release of prisoners by both sides. Diplomatic relations are to be normalised. Though travel and other restrictions have been further eased, US tourism or any visit to Cuba that does not fall into 12 approved categories remain prohibited. Lifting the travel ban and the wider economic embargo will require approval of a Republican-controlled Congress. Prominent Republican Party leaders have been critical of Obama’s initiative. Right-wing US Senators Robert Menendez (Democrat) and Marco Rubio (Republican) have threatened to veto the nomination of any ambassadorial nominee to Cuba. They were successful in vetoing the nomination of Obama’s candidate for Nicaragua in 2011, accused by the Senators of having been too soft on Cuba during his tenure as head of the Interests Section till that year!
Cuba’s David has not slain the US Goliath, but the former feels vindicated, if not victorious. A closer look, however would probably reveal that the US establishment may be walking out of the corner it painted itself into, now the paint has dried. A ‘lame duck’ President Obama felt unshackled enough from electoral politics to take this historic step, though secret negotiations commenced in June 2013 in Canada. Reliable polls of the Cuban American community, the focus and progenitor of US policy on Cuba, find that a majority want an end to the embargo.
Factors that forced rethink
Americans have been visiting Cuba in growing numbers recently. If not permitted officially, they go through Cancún, Bahamas or Panama, where passengers are handed paper visas for $20, with no Cuban immigration stamp on arrival. The US has permitted agricultural exports to Cuba worth several hundred million dollars annually, apart from $2 billion in medical equipment in 2013. Recent research reveals the Cuban offshore may hold between 4 and 20 billion barrels of oil.
Exploration by companies of several countries — including India’s ONGC — went slow because of the US embargo. Cuban measures to loosen regulations on travel and ownership have also helped. The inexorable communications revolution, growing influx of tourists, and the need for technology and funds to upgrade the economy, forced a rethink. The Cuban government earlier this year invited international investment in hundreds of projects in infrastructure, industry, tourism, etc. It is actively considering doing away with the dual currency system that created a flourishing blackmarket. Normalisation of relations with the US in any measure will have a multiplier effect on these reforms. Cuban diplomacy has also played an important role in forcing the US hand. President Putin announced in September 2014 in Havana that Russia would exonerate over $32 billion Cuba owed it. China is extremely active in the Cuban energy, infrastructure and other sectors. Within the region, Venezuela’s post-Chavez economic decline has been compensated for by a more pro-active Latin American policy towards Cuba. Brazil has funded the impressive Mariel Port project near Havana, with a special economic zone to be managed by a Singaporean consortium. Canadian trade and investment in Cuba has been climbing steadily. The involvement of Canada, Pope Francis (Argentinian) and others, including Uruguay’s President Jose Mujica, reveals a formidable diplomatic buildup that culminated in the phone call and agreement.
India’s relations with Cuba have always been cordial, and in the heyday of the Cold War, even close. Fidel Castro’s embarrassing embrace of Indira Gandhi at the New Delhi Non-Aligned Summit in 1983 was reciprocated by Rajiv Gandhi’s visit to the island in 1985. Prime Minister Manmohan Singh and Vice-President M H Ansari visited Havana in 2006 and 2013 respectively. They were received by an ailing Fidel warmly, a gesture not extended to all Heads of State or Government. Economically things have not gone well. After India wrote off Cuba’s debt of approximately $68 million in 2008, it financed a Centre for Excellence in Information Technology in Havana, and extended Lines of Credit worth about $20 million to refurbish some old Cuban industrial plants. ONGC (Videsh) Ltd. was allotted sizeable areas in Cuba’s offshore, but exploration was delayed. A drilling rig finally arrived in 2011 after ascertaining it did not contravene the US embargo. The company shut down its office in Cuba earlier this year, after failing to locate a financial partner willing to share the risk of locating and India’s relations with Cuba have also been an exercise in balance, with an eye on the superpower. The Cubans have felt this was often at their expense, although they have received far more attention politically than most other Latin American countries. The lack of engagement however, had more to do with the lack of economic substance, partly due to the embargo, and dilatory Cuban regulations and procedures.
Preparing for trade
If the latest rapprochement leads to what the world expects and hopes from both sides, Indian investment and trade could refocus. It would be prudent not to merely wait, but to prepare for the inevitable change. This calls for a close look at the Cuban offers to participate in an economy that will open gradually but definitively. India needs to get more familiar with the new Cuban establishment and its priorities. It then needs to focus attention and commit resources as and how opportunities arise.
The writer is a former Ambassador of India to Cuba
Tale of two countries
Relations between the US and Cuba have long been intertwined. Since 1960, the US has maintained an economic embargo against Cuba. Here are key moments in ties between the two nations:
1959: Castro leads a 9,000-strong guerrilla army into Havana, forcing Batista to flee. Castro becomes prime minister.
1960: All US businesses in Cuba are nationalised without compensation; US breaks off diplomatic relations with Havana and imposes a trade embargo in response to Castro's reforms.
1996: US trade embargo made permanent in response to Cuba's shooting down of two US aircraft operated by Miami-based Cuban exiles.
1998: The US eases restrictions on the sending of money to relatives by Cuban Americans.
June 2001: Five Cubans convicted in Miami and given long sentences for spying for the Cuban government. The case of the Cuban Five becomes rallying cry for the Havana government.
Nov 2001: US exports food to Cuba for the first time in more than 40 years after a request from the Cuban government to help it cope with the aftermath of Hurricane Michelle.
May 2002: US Under Secretary of State John Bolton accuses Cuba of trying to develop biological weapons, adding the country to Washington's list of "axis of evil" countries.
Oct 2003: US President George Bush announces fresh measures designed to hasten the end of communist rule in Cuba, including tightening a travel embargo to the island, cracking down on illegal cash transfers, and a more robust information campaign aimed at Cuba. A new body, the Commission for Assistance to a Free Cuba, is created.
Feb 2006: A propaganda war breaks out in Havana as President Castro unveils a monument which blocks the view of illuminated messages — some of them about human rights — displayed on the US mission building.
Dec 2006: The largest delegation from the US Congress to visit Cuba since the 1959 revolution goes to Havana.
July 2007: Acting leader Raul Castro again indicates he may be open to a warming of relations with the US. He offers to engage in talks, but only after the 2008 US presidential election.
Feb 2008: Raul Castro officially takes over as president. Washington calls for free and fair elections, and says its trade embargo will remain.
4 Nov 2008: Barack Obama is elected US president.
Dec 2008: New poll suggests a majority of Cuban-Americans living in Miami want an end to the US embargo against Cuba.
April 2009: President Obama lifts restrictions on family travel and remittances to Cuba.
Dec 2009: US citizen Alan Gross detained in Cuba accused of spying for Washington.
Nov 2010: American Ballet Theater visits Cuba for first time in 50 years, the latest in number of cultural exchanges.
Oct 2011: Convicted Cuban agent Rene Gonzalez is freed as scheduled from a Florida jail. Gonzalez is part of a group known as the Cuban Five, who were given long terms in 2001 in the US after being convicted of spying. Havana has repeatedly called for the men to be freed.
Dec 2011: The US again calls for the release of Alan Gross, an American who is serving 15 years in a Cuban jail for taking internet equipment into the country. Cuba's refusal to free him has frozen relations for months.
Sep 2012: Cuba suggests it is ready to negotiate with Washington on finding a solution to the Gross case.