25 February 2008

The Berman Committee

On 5 March 2008, Acting Chairman of the House Foreign Affairs Committee Howard Berman will hold hearings on US-Cuba relations:

It is my intention to hold hearings with representatives of the Administration and outside experts to assess the impact of Castro’s retirement and to review U.S. policy toward the island.

I have three questions:

(1) For the last 49 years, the Cuban government has demanded that the USG vacate and abandon its claim to Guantanamo Bay. Our response has been that there is a lease.

Can you explain how it is that a lease should trump Cuba’s sovereign right to her territory?

(especially in the context of the Reagan administration's claim that at anytime a nation could back out of an agreement--see Nicaragua v. US, specifically the Reagan Administration's position on the '1946 Declaration.')

(2) Brazil. Recently, Brazil has extended a slew of loans and credits to Cuba. Brazil is also a beneficiary of as many as 100 IMF projects.

In the context of the Helms-Burton provision ordering the USG to withhold money to the IMF by the amount any nation financially assists Cuba, can you tell us

(a) if any of those projects are in jeopardy?

And (b) what significant actions the State department has taken to discourage Brazil from financially assisting Cuba?

(3) In 2004, the Bush Administration declared that its official policy was to subvert the succession of power from Fidel Castro to his brother Raul.

Did that policy fail?

24 February 2008

The WSJ on the Stocks that Stand to Gain if Cuba expands Foreign Investment

In an article by Corey Dade titled "Business Hold Few Hopes of More Trade Soon," quote:

Until trade relations between Cuba and the U.S. change, Robbert van Batenburg of Louis Capital Markets, an agency brokerage whose clients include hedge funds, recommends investing in companies already operating in Cuba. Imperial Tobacco Group PLC, for instance, owns a 50% interest in the Cuban state-owned cigar company Habanos SA through its acquisition last year of Spanish-French tobacco company Altadis SA. Cuban cigars would be a hot item in the U.S. if the embargo was lifted.

One of Mr. van Batenburg's favorite investments is Sol Melia SA, a Spanish hotel chain with two dozen properties in Cuba. He said he expects the company's annual revenue from Cuba might double quickly if travel restrictions were lifted, based on the volume of U.S. tourist traffic to nearby Puerto Rico and the Bahamas.

"It's going to be an avalanche of tourists who are going to visit the island, to see the buildings, the old cars driving around," Mr. van Batenburg said. "This is nostalgia at its best."

Robin Farley, a leisure analyst at UBS Investment Services, said building the infrastructure to support American travelers might take years. In the short term, that would mean a boon for cruise lines. "Their assets are mobile," Ms. Farley said.

Large U.S.-based hotel operators such as Global Hyatt Corp., Hilton Hotels Corp. and Marriott International don't own or operate hotels in Cuba, but yesterday there was fresh speculation about whether the companies would pursue development in the region.

"We believe Cuba has great potential as a tourist destination, and we will monitor the situation there and look for opportunities as they arise and become viable," said K.C. Kavanagh, a representative of Starwood Hotels & Resorts Worldwide Inc., which owns brands such as Sheraton and W Hotels.

The U.S.-Cuba Trade and Economic Council, based in New York, says food and agriculture producers that capitalized on the U.S.'s lifting of the ban on food sales to Cuba in 2000 are best positioned to benefit from relaxed trade. The U.S. is Cuba's top source for such products. Last year, U.S. companies sold about $438 million of food and agricultural products to Cuba, up from about $139 million in 2002, according to the council.

Commodities exported to Cuba include poultry, rice, wheat and soybeans. Cargill Inc. and Archer-Daniels-Midland Co. started shipping shortly after the ban was lifted and now consider Cuba an important market in the region. Cuba is the sixth-largest poultry and egg export market for the U.S., according to the U.S. Agriculture Department.

19 February 2008

Congratulation, Fidel Castro

By resigning on his own terms, Fidel Castro today defeated official US policy to unseat him and his government.

I read many commentators say that Raul Castro (or Carlos Lage) will bring democracy to the island. I say they won't.

With Cuba, it's important to notice that, unlike democracies, the government is legitimated by the Revolutionary Army (FAR). (With a democracy, of course, the government is legitimated by the people).

To understand why the Revolutionary Army will never peacefully yield its authority to legitimate Cuban governments, one needs to understand the way in which the U.S. Government marginalized--indeed, allowed noble FAR forces to starve to death--in the aftermath of the 1898 War.

That does not mean that the next Cuban government will not enact democratic reforms.

They surely will, although I highly doubt we'll see significant changes in the judicial process, such as an end to summary executions and other procedural reforms many good Cuban lawyers would like to see, not at least until the US Government officially abandons its attempts to subvert the Cuban government by coercing her citizens.

To be honest, with the delicate security implications alive today, such as Cuba's connection to Hezbullah and Syria, I am not sure exactly what policy changes the U.S should make, but it cannot be a wise thing to let the Cuban people on the island drift closer to our Arab foes.