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Cuba in the Twenty-First Century

Speakers: Carlos A. Saladrigas, Co-Chairman, Cuba Study Group, Chairman and Chief Executive Officer, Regis Human Resources Group, and Julia E. Sweig, Nelson and David Rockefeller Senior Fellow and Director for Latin America Studies, Council On Foreign Relations, Author, "Cuba: What Everyone Needs To Know"
Presider: Donna J. Hrinak, Senior Director, Latin America Government Affairs, Pepsico, Inc.
Thursday, January 21, 2010, New York
Council on Foreign Relations

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DONNA HRINAK:  Good evening and welcome, everyone -- great turnout for this CFR event, "Cuba in the 21st Century."  I'm Donna Hrinak, senior director for Latin America Government Affairs at Pepsico and a member of the board of CFR.  

And before I introduce our discussants tonight, I would like to make two announcements -- first of all, remind you that we are on the record and that, second, because we are on the record and it's important that we all hear clearly and accurately, I implore you to please not just put your mobile devices on vibrate but please turn them off.  We have a wireless sound system here and they will interfere with the sound and it's both confusing and annoying, so please, we will all appreciate it.

Let me introduce our two panelists this evening, first Carlos Saladrigas, who is the CEO and chair of the Regis Human Resources Company but is also the co-chair of the Cuba Study Group, which is a nonpartisan, nonprofit organization that for years has been dedicated to finding a more effective U.S. policy toward Cuba.  And you can ask Carlos as we get to the Q&A what a more effective policy toward Cuba means.

I would also like to introduce -- although she's at home, actually -- a friend -- not an old friend but a friend of long-standing, Julia Sweig, who is the Nelson and David Rockefeller Senior Fellow here at the council, director of Latin America Studies here, and is also the author of a book, "Cuba:  What Everyone Needs to Know," which I will plug the book again at the end because it will be available.

And when I say "plug," this is not a book that you read once cover to cover.  This is a reference book, and I'm happy to discuss the book because it's been so useful to me too.  So it's really an honor and a pleasure to be here with two such knowledgeable people on Cuba and to moderate what I know is a discussion that will need no moderator, actually.

Let me begin by asking both of you the same question.  And it's a question that I think reflects my frustration with this issue, because we're talking about Cuba in the 21st century, and yet many of the circumstances that are relevant to this discussion tonight were the same five or 10 or 20 years ago.  We still have a U.S. economic trade embargo on Cuba.  Cuba is still an issue which causes disruption, disagreement between the U.S. and other countries of the hemisphere.

We still have political prisoners and lack of political freedom in Cuba, and we still have a Castro in power in Cuba.  Now, if we reconstitute this panel five or 10 or 20 years from now -- (laughter) -- will we be discussing these same circumstances?  What is it that makes the Cuba situation so intractable, and is there any prospect for change in our lifetimes?

Carlos, would you kick it off?

CARLOS A. SALADRIGAS:  I think that we might very well, if we meet five years from now or 10 years from now, be having exactly the same conversation as we would have had 10, 15 years ago.  Hopefully not.  Hopefully things will be different.  

But if you are from Mars and you come down and you look at Cuba policy, you'll find it incredibly strange.  Here is a president that, for the first time in many decades, says that he wants to have a better relationship with Cuba; lifts a Bush-era restriction on family travel and remittances; allows Cuba to, in essence, come back into the Organization of American States; sends a diplomat to Cuba, says I'm willing to talk about everything, put everything on the table -- all I want is a small concession, you know, a gesture, sign, something.

There is a bill in the Congress to lift the travel ban.  Many people think this is incredibly important to the Cuban government.  It concerns an immense, significant inflow of dollars.  And yet we see a regime that is doing everything but try to have this policy changed.  It's bizarre.  Why?

And the answer, I think, is rather simple.  The answer is, is that -- two fundamental reasons.  One, I think there is a leadership group in Cuba who is fundamentally very scared of change and that truly believes that engaging in a tit for tat type of approach with the United States is indeed a very slippery slope and that it might lead to the loss of power, something which they definitely don't want to have happen, certainly not in the lifetime of these revolutionary leaders.

The second fundamental reason is that the embargo and the U.S. policy of confrontation and isolation has been incredibly useful to the Cuban regime as an alibi for the failures of the regime to meet the fundamental needs of the people on the island, but also is a significant source of legitimacy, both internal and external.

And, therefore, I don't think they're willing, at this stage of the game, even notwithstanding the huge window of opportunity that may indeed close two years from now when we have mid-term elections -- notwithstanding that window of opportunity, they are not willing to seize at this moment in time.

It's sad because a great opportunity is being missed, but this is a regime that doesn't -- has no interest in changing.  They're afraid of change.  And, therefore, it begets the question, why do we continue to insist on a policy of conditionality with the Cuban regime when it is the regime that very much wants a continuation of the status quo?  Why give it to them on a silver platter if we truly want Cuba to change?

HRINAK:  Okay, you said if you come look from Mars at the Cuba situation -- Julia, you come from Venus, so -- (laughter).  

JULIA E. SWEIG:  Good.

HRINAK:  Will there be change, or is this a permanent situation?

SWEIG:  Well, it feels that -- I like to talk about this dynamic, both what's happening internally in Cuba and bilaterally between the two countries.  And certainly in my Cuban-American community it had been in ice, really frozen, and now it's getting a little slushy.

So I think if we expect change with a capital "C" where one day to the next you have either a unilateral lifting of the embargo from the United States, which the Congress, in any case, has to participate in or, within Cuba, a regime that decides it can no longer resist the pressure; it needs to open up, and therefore will make the kind of domestic concessions that are embedded in U.S. law.

That kind of change -- that kind of overnight change, no.  I think it's been 50 years of one kind of regime there and one kind of regime in our bilateral relationship.  And I'm not saying it's going to take another 50 years to evolve.  I do think we have the simple fact of the march of time.  Fidel Castro is 83 years old; his brother is 79.  Raul has brought back a number of people from the founding generation to the senior leadership, but none of them are going to be around forever.

The demographics and public opinion of the Cuban-American community, especially the latter, are now farther ahead than where Washington is in terms of what it will tolerate in terms of opening a new policy change.

If we frame our expectations for change as this administration has framed them -- and it isn't just one little concession that has been asked for from the perspective of the Cuban government -- the Cuban regime sees these very initial opening moves of the administration as still within the framework of the traditional policy of embargo, and the Cuban government I believe is trying to demand, with what little power it has, that moves be taken outside of the framework of the embargo and all of its dimensions.  

And we can go into those details, but internally within Cuba -- and this is the last thing I'll say and I hope we can say more about it -- a debate has begun very slowly about what kind of future will come for Cuba.  What are the kinds of steps that need to be taken, especially on the economic reform front?  And the environment in which that debate has taken place is perhaps more open than it has been in the last 50 years.

The constraints that are perceived by the regime are real and they are more so since Raul took office and the global financial crisis hit last year.  But it is not frozen solid either here or there.  

HRINAK:  I'd like to follow up on sort of the thought stream of what's going on within Cuba, what's happening on the island?  

There was some hope, some talk when Raul took over, that he was more of a pragmatist, that he was going to allow this debate, that the government might work more effectively, there might be economic reforms, they might unify the currency.  How much of that have we seen?  Is there -- is this a more pragmatic government?  Is this in any way a more effective government?  

There were reports that they delivered hurricane assistance quite effectively and efficiently, but in general, is this a government that is showing any signs of being able to keep its citizens satisfied and allow them to debate more and more what the future of their home is?  Do you want to pick up on what you just were talking about?

SWEIG:  Sure.  The opening moment that told me that this was the beginning of change -- the beginning of change was Raul Castro's inaugural address in February of 2008.  It was only 34 minutes long.  (Laughter.)  That right there says some sensitivity to what the Cuban population might be looking for in their new leader.  (Laughter.)

And its content was likewise refreshing and raised expectations a great deal, as did our own election campaign and the election of Barack Obama.  Cubans in Cuba will secretly open like a drawer -- not even secretly -- and show me their Obama t-shirts and placards and stuff.  People were rooting for a Democrat and then specifically for Obama, for lots of reasons.

And he laid out an agenda without calling it a reform agenda, that included modest and moderately paced changes, which were designed, as he said, to enhance the material and the spiritual lives of the Cuban people.  These involved consolidating and shrinking the bureaucracy.  He emphasized efficiency and productivity, sounded more like Margaret Thatcher than Karl Marx at times.  

They began an agrarian reform, an agrarian reform vitally important -- so much fallow land, unproductive, inefficient land.  Cuba imports 80 percent of the food that it consumes, so that was one thing that has begun.

But, in every single -- a unification of the currency hasn't begun yet.  There are reasons for that.  It is the primary focus for Cubans -- how Cubans perceive why things are so unequal and why they are so poorly off is the very whacky dual, triple currency system even that they have.

There was a perception -- there were raised expectations and then the food and fuel crisis hit and then the hurricanes hit and took out 20 percent of the GDP.  The mobilization that the regime demonstrated to deal with that hurricane was an example of the government delivering services immediately.  They lost very few lives.  

They began to put things back together again in terms of infrastructure, got food and supplies where it needed to go.  It was the military and the civil defense forces that did it.  It was a demonstration right off of efficiency and being able to deliver services.

Now, the deterioration of the basic infrastructure of Cuba, including of the social services that Cubans believe that they are entitled to; enhancing that, raising the money to be able to make sure that the education and health system that have been Cuba's pride continue to deliver.  Those are much more long-term, difficult issues.

And I would say that the financial crisis, the third piece of the puzzle that intervened in this reform agenda that he articulated, which included -- without saying so, we came to expect there to be privatization -- without using that word -- of some state enterprises, small businesses, freeing up of economic space, not on the political side but on the economic side.

But your frustration is mirrored by the frustration on the ground now, Donna, that things have just moved much more slowly than people had hoped.

SALADRIGAS:  I take a little bit different view on that.  You know, to say that Cuba has never changed is really not accurate.  If we look at the special period when the collapse of the Soviet Union and the cessation of the large subsidies that the Soviet Union was providing the Cuban economy, we saw some very significant change and a lot of significant reforms, only to see them a few years later be pulled back by Fidel Castro, who was afraid that they would lead to greater inequalities in Cuba and other things that were just not in accordance with his thinking, including kicking out many foreign investors, Hispanic investors and others, that were basically all kicked out of Cuba except for a very few large investors.

So Cuba has changed, but every time we see some significant change we see a significant step back.  I'm afraid that we're seeing a period where we're seeing a step back in things.  I think this regime right now -- this is different than I would have said perhaps a year and a half ago or two years ago -- is clamming up, is closing in again and is rejecting any effort by the United States, including those congressional efforts, to open up in any way, shape or form.

Why this is happening, nobody knows.  Raul Castro has always been an incredibly enigmatic figure.  Nobody has ever really known much about Raul, mainly because he's always said so little.  You know, Fidel tells you everything he thinks -- (laughter) -- and he probably does everything he's going to do, but Raul has never done that.

So in many ways, Raul has done a major disservice to Cuba in the sense that I think the level of frustration in the population has increased and the sense of uncertainty is incredibly pervasive in the Cuban population today.

With Fidel, people knew where things were heading.  People knew what Fidel wanted.  He would tell you that.  With Raul, they just don't know.  They don't know the person, they don't know what he thinks, they don't know what he's going to do.  

He raised expectations only to have his brother contradict him just about every turn when he was pundit-in-chief in the Granma newspaper, and he contradicted, at every turn, what Raul said, including, if you remember, when he said to President Obama, everything is on the table, including human rights.  One or two days later Fidel came out and said, he didn't really mean that; he meant this.

So it's been a constant contradiction.  Whether Raul has not implemented the reforms or fulfilled the expectations that he himself created because he doesn't want to or because Fidel doesn't let him, we just don't know.  But, either or, the net impact is that I see a Cuba in regression, and they are regressing to the playbook they know.

We can go back in the history -- in the 50-year history of U.S.-Cuba relations and clearly see that any time we begin to see a little bit of relaxation of tensions in the relationship, whenever we begin to see a little bit of openness on the part of the United States or Cuba, historically the Cuban government has done something to counteract that trend and significantly revert back to their playbook.  I think we are seeing that again.

HRINAK:  All right, I think --

SWEIG:  Can I just -- a tiny interruption and contradiction and disagreement?

HRINAK:  I knew this would happen, yeah.  No.  (Chuckles.)

SWEIG:  You made one statement that I'll disagree with, which is there is legislation in the Congress to try to lift the travel ban.  I don't see any evidence whatsoever that the Cuban regime has tried to stop that or reject it.  They're promoting, with the American tourist industries at every pass -- look at the opportunities that we have; look at all this undeveloped coastal territory that we have.  They're saying on the tourist front that they're open for business.  I don't see them getting in the way of what the Congress is doing.

Likewise, the allowance of Cuban Americans sending remittances and Cuban Americans' travel there, they haven't gotten in the way of that.  I think they're waiting for more.  And, you know, we can get into a discussion about what concessions mean and what can be reasonably expected and what is it that we're asking them to negotiate, but just the point on the Congress, I see them as waiting for that bill to pass.

SALADRIGAS:  I disagree.  I think that they know, just as we know, that to move a piece of legislation forward, it needs a certain amount of momentum.  And they can help that momentum enormously.  All they needed to do is release a couple of prisoners and remove the dread of white card, which is the permit that Cubans need to get out of the country; eliminate or reduce the tax on remittances -- things that are minor in the context of things but I believe will have given the -- will have contributed greatly and positively to the momentum on the Hill to push the thing forward.

And instead of doing that, they have in many ways done the contrary.  They have arrested the contractor, Mr. Gross.  They have kicked out a major and prominent Spanish parliamentarian.  They conducted some significant war exercises.  Yes, they do them regularly but they could have withheld them.  They have withheld all their important things like the Communist Party Congress.  

Their rhetoric is intensifying again.  You know, I see an awful lot of signs that point me in the direction that this government is clamming up, that they do not want these efforts to succeed in the United States Congress or in the administration.

HRINAK:  If the government is clamming up, if the expectations that Raul himself created have gone unrealized, what's the reaction of the Cuban people, who were led to believe that things, particularly economically, would improve?  Do they just say -- do they just take it?  Is there any serious threat -- internal threat to the regime?  And does that mean that a policy of supporting opposition groups in Cuba -- providing them communications equipment or other kinds of support -- is the right policy?  Is the time right?

SALADRIGAS:  You're asking me?

HRINAK:  I'm asking both of you, actually.

SWEIG:  Well, first of all, I think we need to be really explicit about one major question at least, which is what is the purpose of our policy toward Cuba?  Do we expect from such changes as lifting the travel ban or allowing phone communications, or ultimately lifting the embargo -- is the purpose to bring democracy and political rights to the island to reform, to revolutionize, to overhaul that society?

Or are we doing it for reasons that have to do with our definition of our national interests, which may include what a society looks like internally, but is there a rationale for ending something that has failed?

And I put this on the table because there are -- you could say that whatever happens in Cuba, by and large, as long as the succession is stable and Cuba plays well in security issues in the neighborhood, that there is no reason to do very much unilaterally.  

But I really want to force the question of do we really expect, do you expect, does this White House expect that changes in policy believe -- not expect -- believe that the purpose of the policy changes that we're talking about here is to produce a major reform  inside of Cuba?  I'm quite skeptical about the answer to that question.

SALADRIGAS:  And I agree.  The United States cannot bring democracy to Cuba.  Only the Cuban people can do that.  But for 50 years we have had a policy that has been obsessed with the regime, and the purpose of the policy has been to hurt the regime at the expense even when it provided or produced collateral damage on the people.  

What we in the Cuba Study Group have been advocating for many years is that we need a policy that focuses on the Cuban people, even if it brings a collateral benefit to the regime -- very opposite approaches to Cuba.   It is the Cuban people who ultimately, on their own time, on their own terms, are going to be the actors of their own change.

HRINAK:  And what does a policy like that look like?

SALADRIGAS:  Well, it means openness.  It means to empower the people with information and resources, and it means to normalize the situation so that Cuba becomes as normal as possible in relation to the United States as it conducts relationships with all of the countries in the world.  And then, once you remove all of these obstacles out of the way, then the Cuban people can, on their own terms bring about change.  

The problem with the Cuban people is, you know, they're -- we were talking about this earlier, that the Cuban people are more opening showing their dissatisfaction with the government or talking about it than they ever have before.  There is probably more debate within the Cuban elite and the Cuban hierarchy than there was ever before.  So, all these things are going on but they stop the minute they translate this into actions.  

And, by the way, the internal opposition has been equally infected by this disease of paralysis and maintaining the status quo.  They have failed to reinvent themselves.  They have failed to connect with the people.  They have failed to assert themselves as a force for the future.  

So, more likely than not, I think we need to resign ourselves to the reality which we dislike but we have no choice, that changing Cuba when it comes is more likely to come from the top down than it is to come from the bottom up.  And, given that reality, I think we need to rethink our policy in terms whether we are facilitating those processes of change or whether we're actually making them more difficult.

Raul Castro said something many years ago that I think is incredibly important.  He said it is far better to use beans than bullets to deal with a dissatisfied population.  But implicit in that statement is the fact that, in my opinion, that he's willing to use bullets if necessary.

So, you have a system that knows that the people are incredibly and growingly disenfranchised, that people are incredibly and growing disillusion and dissatisfied with their day-to-day lives but know that they have the power and the tools and the weapons to keep the population under control.

So, for them, staying longer, keeping the lid on the pot longer, keeping the door shut a little bit longer, keeping the status quo going for a while is relatively safe over the short term, notwithstanding everybody knows that doing those things over the long term does increase the risk of a major upheaval or a cataclysmic outcome to the Cuban system, something that is definitely not in the best interests of the united states and is definitely not in the best interests of the Cuban people.

And, therefore, the focus of our policy then ought to be is how can we facilitate change?  And you know, to facilitate change, you need to do three fundamental things.  If you're focused on the power-holders, you need to increase the rewards of change -- something that we have never done -- we need to reduce the cost of change, and we need to increase the urgency for change.

And the best way to increase the urgency for change is to empower people through the tools that empower people everywhere:  Internet access, access to information, access to resources, access to American culture and values, access to Americans and to foreigners on a regular basis without impeding it.  Washington is screwed up.  (Laughter.)  It really is.

HRINAK:  I think we could go lots of places with that, but isn't that what Obama said he was going to do, that the policy had failed and so let's --

SWEIG:  Yes.

HRINAK:  Is it so simple to say the policy is -- Washington is screwed up, or what else is --

SWEIG:  I'm going to go back 10 years, that 10-year earlier mark.  Some of you I'm sure were here 10 years ago when the Council on Foreign Relations released a task force report that I staffed, called "U.S.-Cuban Relations in the 21st Century."  And that came out right in the late 1990s in the era just prior to the papal visit, so 1998.

And then we issued a second report in -- no, I'm sorry; I got my dates wrong -- '99 and 2000, two series of reports.  We worked very closely with the Clinton administration to get out of the framework of lift the embargo, tighten the embargo, because by then the executive branch had lost its power, because of Helms-Burton, to unilaterally do so.

And on the table and then implemented by the Clinton administration -- some people that were involved in that are here today -- were a number of steps that were made possible for Americans -- Cuban-Americans and Americans of all stripes -- without lifting the travel ban, working with Congress to use the executive authority that we do have to offer liberal licensing, license possibilities for Americans of any kind of institution and NGO that you want to name -- science, various different professions, medical, educational, sports, culture.

We had, by 2001, 200 (hundred-thousand) to 300,000 Americans traveling to the United States -- I'm sorry, to Cuba per year.  And we also had the Cuban government pretty liberally allowing that, number one, issuing the visas, and Cubans coming here to the United States in all kinds of unofficial exchanges, society to society.  That's the kind of thing that, in a heartbeat -- 10 years ago we did it.  The Bush administration essentially ended it.  The Obama administration hasn't done it and it's inexplicable.  

The Tarjeta Blanca that you raised -- and, now, this goes to something the United States could -- that Cuba could take -- the Cuban government, by all accounts, has approved the elimination of that requirement that Cubans ask for permission before they travel, but they're waiting for the Congress to lift the travel ban before they liberalize on their end.  That gets you into the psychology of the imbalance of power that we're dealing with.  

There are many other steps that the executive branch could take, including taking Cuba off the U.S. terrorist list, which, under the Clinton administration, Jerry Bremer recommended the process begin for that very thing to happen.

So, 10 years ago, we had lots of things on the table, including counter-narcotic cooperation, which we started and then it kind of went on pause and the neighborhood security kinds of cooperation that we could have really aren't there quite yet.  

Why the Obama administration, is your question, has not moved with -- taken the momentum and taken the domestic political support and international support that it has to do so has to do with other priorities -- 10, 20 percent unemployment, Afghanistan, Pakistan, all of the other issues that are incredibly critical, but also because I think that the perception of risk is too high for this regime up here -- the perception of risk is too high.

SALADRIGAS:  For the U.S.?

SWEIG:  For the U.S., and that's a domestic political question.  So I do think domestic politics is pervasive in the White House when it thinks about this question.

HRINAK:  I'm sure we'll get back to this when we open it for questions from the members.  I'd just like to ask each one of you one question before that, and -- you know, although sometimes it doesn't appear that way, the U.S. isn't the only international player with which Cuba is dealing.  

And I'd like to ask you about the Cuba-Venezuela relationship.  Who's influencing whom there?  Has it made a difference since Fidel has faded more into the background?  Does Chavez have more influence over Raul or is it the same kind of relationship where Cuba is really directing, guiding Chavez and exerting its influence within Venezuela?  Carlos?

SALADRIGAS:  Well, the Venezuela relationship has been critical to Cuba.  Without it, they would not have been able to survive, certainly not in the current form, as they have.  It's a relationship that when you add the different components of the relationship, it probably means anywhere between 4 (billion dollars) and $5 billion of income to Cuba, both in terms of subsidies and what I call a series of relationships, none of which are truly at arms' length.

So they are somewhat subsidized or artificial type of economic relationships.  So it is a significant number, a significant percentage of the entire source of foreign exchange for the island.  

Clearly, Chavez has been the true heir of Fidel Castro and the Cuban revolution, not Raul.  Raul is not his heir.  It's been Hugo Chavez.  And, therefore, Hugo Chavez has been managed over the years by Fidel in a very direct and a very significant way.  But things will change, and have changed to some degree, when Fidel was out of the picture for a while.  And, clearly, although Fidel has seemed to come back from the dead, you know, he may still go back.  (Laughter.)

And, you know, then the question -- then the question becomes whether Hugo Chavez -- it's a normal economic influence in Cuba -- whether Hugo Chavez will exercise a significant amount of influence over the future of Cuba.  

And that, I think, is a major strategic issue for the U.S. to ponder and for us to think through, and it is a worrisome issue.  It is an issue that I believe worries many in the Cuban leadership who promised never again to find themselves in a situation of so much dependency of any one source, like they did when the Soviet Union collapsed.  

Besides, Hugo Chavez is not a figure that inspires a lot of confidence to us, and probably to them either.  So, you know, to have your future hang in the hands of Hugo Chavez doesn't allow you to sleep well at night.  

And I think this is a real concern for many in the Cuban leadership but it's also a concern that we ought to have as to whether a future Cuban government, who wants to implement serious and meaningful economic reforms and leave their alliance with so many rogue states and begin rapprochement with the United States, whether Hugo Chavez would permit it or whether Hugo Chavez will threaten to pull the plug, something that could be devastating to a booming and nascent market economy in Cuba.

HRINAK:  Do you agree, Julia?  Do you think that this is a real concern?

SWEIG:  I mean, I think it's a potential scenario but it's not one that I give as much weight to.  I think that Cuba's influence internally in Venezuela is much more important than the other way around, especially since the 2004 referendum when the Cubans have been very, very effective in helping Chavez consolidate executive power.

They take advantage of his largesse.  The ideological simpatico in the region especially, and vis-a-vis the United States, works.  They benefit from him being out there.  It's throwing and taking the slings and arrows that he does with the United States.

At the end of the day, I think because of that allergy to dependence and domination that they have acquired over the last 150 years, the likelihood that they would allow him to blackmail them in the way that you're suggesting if the opportunity does arise for openness with the United States, I think that's less significant than Carlos suggests.

But it depends on who the "they" is.  It really does depend upon who we're talking about and when it transpires, and what kind of financial weight Venezuela or Chavez might have down the road internally within Cuba.

SALADRIGAS:  This has sort of forced me to rethink an issue, you know, for -- sort of -- that debate has sort of faded off of embargo and has moved down to other things like travel and purposeful travel and other things.  

But in my mind, it's coming back to the embargo, because in many ways, a policy that was designed to bring down the Cuban regime, or at the very least to force it to change -- you know, for many years, this policy did not have an impact on a totalitarian and closed economy.  It was sort of innocuous to the Cuban economy to some degree -- not completely but to some degree, to a substantial degree.

But it may have a completely different impact in a budding market economy if there is an effort to begin to reform this process.  I do not see how a potential or future Cuban regime who wants to implement a gradual process of economic reforms can do so in the face of the U.S. embargo.

HRINAK:  Carlos, let me stop you there if I may so that we can open this up to our members with their questions.  Let me ask -- we have three people with microphones.  Please wait until the microphone reaches you and speak directly into it.  Stand and state your name and affiliation please.  So, I think your hand was up first.

QUESTIONER:  Thank you for those comments.  I really enjoyed it.  My name is Jacques-Philippe Piverger from PineBridge Investments.  I have a question with respect to the strategies that are employed within the study group as far as opening the Cuban economy, and whether or not you've already tried to use the China and perhaps Haiti example as to reasons that we should, as a nation, look to open up trade with Cuba.

So, if you look at China, for example, it's at least as closed as Cuba but we've had -- we've had trade in the Western world and traded with China, and it's done well and it's flourishing.  If you look at Haiti, which has been a capitalist economy for the last 200 years, however the U.S. had a 100-year-plus economic embargo on Haiti from 1804 to about 1915, and you see what's happened there.

And, basically, the people that suffer are the uneducated and the poor.  Is that what we're looking for in -- can that potentially be applied to move the team forward with the relationship with Cuba?

SALADRIGAS:  Well, we at the -- are you going to take one question at a time?  Yeah, we at the Cuba Study Group have been firm believers that, you know, all transitions have been micro-processes and have been changes step by step.  And we have always believed that it is incumbent upon us, the Cuban-American community, to begin to provide alternatives where change can begin to occur little by little, where we can take baby steps before we take gigantic steps in the process of reunification and in the process of working with Cuba.

And, therefore, we have proposed a few alternatives.  One of the most important ones is that we have proposed to develop a micro-loan fund to help small businesspeople in Cuba, or small budding entrepreneurs in Cuba, build their small enterprises.  And we believe that one of the early steps of a reforming Cuban economy needs to begin with microeconomic reforms even before they begin to implement the much-needed macroeconomic reforms.

Yet there has never been any interest shown by the Cuban government to sort of engage in that process.  It's a process that could begin to build trust, could begin step-by-step to show that it is possible for Cubans in Miami and the Cuban government to begin to cooperate or collaborate without cooperation, if you wish.  Things need to be step by step.  But, again, the Cuban regime, the Cuban world has been impervious to all these efforts.  

We have also proposed the creation of an entrepreneurial hatchery or incubator in Cuba to help Cuban entrepreneurs but, again, the Cuban economy does not, at this point, accept this level of micro-enterprise formation and they have closed the door on many public statements to some of these efforts.

SWEIG:  Wait, wait, wait, though.  Can I jump in here?  

SALADRIGAS:  Sure.

SWEIG:  I'm with the Council on Foreign Relations, not with the Cuba Study Group, but I have become aware that it's not quite so unequivocal, this opposition to micro-enterprise.  The European Union, which, as you know, has been evolving in its position vis-a-vis Cuba from probably what we may see in the next six months under the Spanish government's leadership as some attempt to get rid of the common position, which, for the last five or six years, has constrained EU-Cuba full cooperation agreements.

But already there is a $50 million pocket of money that the European Union is beginning to spend in Cuba with Cuban participation, and in terms of negotiating the constraints on the possibilities of this fund for micro-enterprise, for creating an EU business school inside of Cuba, for doing all kinds of projects that go precisely in this direction.

And I think the difference is, quite clearly, that the context is in the context of embargo and sanctions and diplomatic enmity.  It's a context of dialogue and cooperation and trade and investment and travel.  And that's why there's a difference between how the Cuban government responds to proposals like Carlos's group versus that, that's coming from the European Union.

So that micro-change is afoot, and there's several other steps that are tiny but that have begun along these lines on the island.  

HRINAK:  Let's take --

SALADRIGAS:  Still I have not seen any legislation enacted by the Cuban government to permit a small enterprise formation anywhere near -- not even close to the levels that we saw in the early '90s.  So, just to --

HRINAK:  Let's take another question here in front, please.

QUESTIONER:  Hello, my name is Larry Bridwell and I teach international business at Pace University, and I was in Cuba a few years ago and I want to follow up on the point you made about agrarian reform.  And I was startled -- because there's a lot of fallow land, and if 80 percent of the food is being imported, this is a huge financial drain on the economy.

Now, what struck me in my visit to Cuba is that the reality is that Fidel Castro and Raul Castro, they're control freaks.

SWEIG:  Totally.

QUESTIONER:  And if you really want to see economic progress in Cuba, you allow the Cuban farmers to grow food -- and there has been resistance to this.

Now, in this context, my question is that when and if Raul and Fidel Castro actually die, will Cuba change as a result of the two control freaks leaving?  And I think what's underappreciated about Cuba -- it's an important, wonderful country, but it's only 10 million people.  Two people can control it.  And when they're gone, will -- I mean, I think of Prague.  I visited Prague, and you can go to Poland, which is communism, former -- they flourished.

HRINAK:  What happened?

QUESTIONER:  I see once these two control freaks leave, with this educated population, Cuba could flourish.  But, anyway, my question is a context:  When those two die, does everything change?

HRINAK:  What happens, yeah.  What happens?  Are there new leaders in Cuba?  Do you see anything?

SALADRIGAS:  I don't think that we should think necessarily that things will change.  I think there's a lot of institutionalization that has taken place and continues to take place.  And it's not just to people that control the country; it's two people on top of a system that is incredibly totalitarian and controls every aspect of life, and that's how they control the population.

There are many tools beyond what we normally think of repression -- you know, beating people up and putting them in jail.  There are many tools to effectively control people, including controlling information, access to the Internet, access to people from other cultures.  

You know, there are many ways in which information and people are in deep control, one of which is economic dependency.  I think the Castro brothers have known for a long time that keeping people economically dependent on the government is indeed probably one of the most powerful tools for political control, and this is why they have been so reluctant over the years to create wealth in Cuba.  It defies the fact that you need dependency to create political control.

SWEIG:  Here's the conundrum that they face, very rapidly:  They have a population that is aging, that because of their great health-care system is living for a very long time and dying of the same things that we all will die of, and they have a labor force that is not growing quickly enough.  So they have a demographic problem on both ends.  They have a popular sense that the state is there to provide certain services, that my entitlement as a Cuban citizen is for certain basic rights of the social welfare state.

But they also have a demand, especially by the young people -- and 60 percent of Cubans were born after the revolution -- a demand for the state to get out of the way.  So they have to figure out how to finance an aging population, provide opportunity for a young population.

And this word, "institutionalization" -- the last point -- that Carlos uses is incredibly important.  I've been to Cuba a lot, but I've especially been visiting a lot in the last two years since Fidel Castro's illness three years now.  And what I heard, especially in my last trip a couple of months ago, all across the board in and out of government, was this word "institutionalization."  

Fidel governed in a chaotic, personalistic way.  He didn't really use the ministers.  Everything happened from within the palace.  Now, ministers are having to be accountable.  Rules are being implemented.  Monthly plans, not just five-year plans, have to be submitted.  This is revolutionary for a bureaucracy, which is also shrinking.

So the point that I do want to agree with Carlos is that these two guys and much stays in place, I believe.

HRINAK:  I'm also reminded there was a Mexican labor leader who, when he was 92, said, the time for me to die has passed.  (Laughter.)

A question in the back.

SALADRIGAS:  Velazquez.

HRINAK:  Yeah.

QUESTIONER:  My name is Martha Teichner.  I'm with CBS News.  I was in Cuba twice:  the year that the pope was there just before his trip, and then the following year, and at that time, which was the peak of the liberalization period that you spoke of earlier --

SALADRIGAS:  Right.

QUESTIONER:  -- I met and interviewed several really sophisticated, well-educated, progressive young diplomats.

SWEIG:  I can't see her at all.  Would you mind standing up?  I'm sorry, I just can't see you.  Would you mind standing up?  Thank you.

QUESTIONER:  At that time I interviewed a number -- I would say three or four young, very well-educated, sophisticated diplomats who had been deliberately posted by the Cuban government to Canada, the EU, to Britain, to New York, and they were being cycled around as the next generation.  And they articulated to me a vision of a future Cuba that was more a regional kind of power center of education and economic development, and they saw themselves as being a socialist country in the future.

What's happened to those people, and within the kind of clamp-down that you've been both describing and the institutionalizing and so on, do those people, who are probably now in their 40s and 50s, are they just out of the picture completely or do they have a future when the Castro brothers die, whenever that may be?

SWEIG:  Well, the answer is --

HRINAK:  I'm going to take just a couple more questions --

SWEIG:  Oh, okay.

HRINAK:  -- if I can, because there are lots of questions and we have 10 minutes.  Yes?

QUESTIONER:  Lucy Komisar.  I'm a journalist.  When similar problems were occurring in Eastern Europe, the Germans had a policy under the socialists, and Genscher was the prime minister, a liberal -- the foreign minister, a liberal, called Ostpolitik -- "east politics."  The Reagan administration strongly opposed it, and the policy was to have a lot of contact, and the Germans ended up giving a lot of support to the dissident movement.  And there was some travel permitted between relatives.

And this seems to have been successful because when the wall finally fell, there were people there that were ready to take over.  This was true in East Germany; it was true in Hungary and Czechoslovakia, not so much in Bulgaria or Romania.

I wonder if there is some kind of a lesson there and whether or not the travel question is not a favor -- ending the travel ban not a favor to be given to the Cubans but maybe a strategy to help change the situation.  That's how the West Germans thought of it, not as a favor but -- and they were right.  

HRINAK:  Let's take one more then answer them.  Yes, over here.  And can I please ask you to keep your questions as short as possible so we can get all of the members' questions answered?

QUESTIONER:  Two short questions.  I'm not clear.  What is the policy of the Obama administration towards Cuba at this time, number one.  And, number two, what is the policy of the Cuban-American population of Florida towards Cuba -- (laughter) -- and how is that impacted by local politics?

HRINAK:  Julia, you were ready to answer the first question.  Would you like to talk about the young Cubans and travel?

SWEIG:  The leadership --

HRINAK:  And maybe you could bring those together?

SWEIG:  I'll take the first one and then part of yours and leave some others to you.

Some of them -- one of them is the new foreign minister, one of the people that I believe you're talking about who had been the ambassador to the United Nations, but a few of them are either not at all functioning or they're not in the key embassies and posts that they were at that time.

In 2009, in the first part of the year, there was a very, very public purge of the foreign minister, the prime minister, in so many words; Carlos Lage, who was kind of the economic czar.  The central bank president stepped down and the economics minister of many decades also left.

People who Fidel Castro had put in place, trained, and who were the sort of architects of that image, who were probably architects of that potential alternative vision that you heard in 1999 and who were the patrons to a number of academics, economists; the people that were working inside of party think tanks developing reform proposals for the economy.  Those also are in different places now.

So it's very hard to say, with a name and a face, who were the successors and where are they, and when are they going to take power because Fidel Castro reinforced his brother's decision to get rid of these guys, in this instance didn't contradict them.  


That was about Raul taking the reigns, but it was also, I think, a message to the international community, to people like you, to say, you know, just because we speak -- our diplomats speak English and are very good at talking to foreigners doesn't necessarily mean that they are, themselves, reformers or that I, Raul, having them represent me, am going to be the kind of reformer that you on the outside want to see.

So it was a very important internal message and external message.  And, subsequently -- you know, I know where they'll come from.  They'll come from the party and from the military, but I can't tell you their names and faces quite yet.

Very briefly on what is the Obama administration's policy, the guts of --

QUESTIONER:  And I also -- (off mike).

SWEIG:  Yes, of course.  I'm only going to answer that piece.

The guts of the status quo that the Obama administration inherited from the Bush administration and from the previous -- ever since Helms-Burton codified the embargo -- remain in place.  Now, if I were an Obama administration official, I would tell you -- I certainly wouldn't say, my policy is the Bush policy.  I would emphasize the changes and the fact that it has been declared a failed policy.  

But, so far, there has been only a few changes on the margins in terms of the economic sanctions.  In fact, the Obama administration's Treasury Department enforces, more aggressively, sanctions against third-party countries -- third-party companies doing business in Cuba than did its predecessor.  So, I would say it's, you know, 10 percent Obama and 90 percent what came before him, the current policy.

HRINAK:  Carlos, you're Miami Cuban.

SALADRIGAS:  Right.  Well, you know, Miami is changing probably faster than Cuba is changing right now, and -- (laughter) --

SWEIG:  And then Washington.

SALADRIGAS:  -- and probably more than Washington actually right now.  It is changing a lot faster, and I'm happy to report that, you know, the majority of the Cuban-American community today believes the embargo ought to be ended.  The significant majority of the Cuban-American community believes we ought to lift the travel ban.  A majority believes that we ought to reestablish diplomatic relations with Cuba, so Miami is changing fast.

Many of the changes are generational, of course, but they are taking place.  But part of the -- even the generational shifts account for a significant portion of the change.  You know, it doesn't take -- you know, you don't have to be a genius to figure out that after 50 years of failure you ought to try something different.  (Laughter.)  So that's also playing a role.

HRINAK:  And lift the travel ban because it is not just a favor to the Cubans because --

(Cross talk.)

SALADRIGAS:  Exactly.  We view the -- you know, people understand the travel ban to be not a favor to the Cubans but quite contrary.  It could be incredibly damaging to the regime and its totalitarian effort.

A perfect example:  Yoani Sanchez -- you may have heard of her; very well-known blogger -- she wrote on her blog two days ago -- she described how she started blogging.  She started blogging because she put an ad on the Internet geared to European tourists that if they came on a two-week vacation to Cuba, she and a number of other people would teach them Spanish, and that's how she made money.  And she was able to make that money and save it, and that's what allowed her to buy the equipment that she needed and the things that she needed to start blogging.

There is a small example of how openness helps.  You know, and when I said Washington screwed up, I meant it.  It was not meant to be a jovial comment.  I really mean it.  Who can think in their right mind that a Treasury Department bureaucrat is better equipped to make a decision as to who is a valuable traveler to Cuba or who is not?

In fact, this traveler who gave her the money to take a Spanish lesson will have not been permitted to go to Cuba under purposeful travel rules.  That's how incoherent -- it really has to do with the fact that we need to understand in Washington that transitions cannot be micromanaged and, much less, micromanaged from Washington.  

You know, you need to open up and let people and our culture and our vast civil society take over and privatize the efforts to bring about change in Cuba and to empower the Cuban people.

HRINAK:  This is not an hour discussion.  Let's take a few more questions.  Yes?

QUESTIONER:  Speaking of blogging, my -- I'm Carole Artigiani from Global Kids.  I'm wondering about the digital generation and whether there's much going on in terms of social media -- Twitter and so on -- and if there's any impact of that.

HRINAK:  Right here, please.

QUESTIONER:  Meg Crahan, Columbia University.  Both Carlos and Julia noted the extent of discontent -- the widespread discontent in Cuba, yet those of us who've spent a lot of time in Cuba have noted the absence of popular bases for most of the agglutinations of people who are discontent, as well as the lack of leadership, together with a lack of a consensual agenda within Cuba for change.  How then do you give them their head, as Carlos suggested, the Cuban people, in order to take power into their own hands?

HRINAK:  We'll take one more question in the back.  

QUESTIONER:  (Off mike) -- Morgan Stanley.  I just wanted to make more of a comment and push back a little bit on the idea that the regime is institutionalized.  I haven't been there but I've studied Eastern Europe pretty closely and it seems to me there is a certain magic or charisma that the name Castro still carries within the psyche of the people.  I would think that when these two people are gone, who can possibly carry this regime from a charisma point of view?  I'd just like any comments on that.

HRINAK:  And we'll take one more question for this round over here, please.

QUESTIONER:  Mahesh Kotecha, Structured Credit International.  Thank you.  My question is simple.  The economics of the country, it would seem to me, would have some effect on the politics.  Could you comment on how the economic dynamics are affecting or not affecting the evolution of political change?

HRINAK:  Carlos?

SALADRIGAS:  Let me answer that question quickly.  Charisma is a force for consolidating the regime because it is a source of legitimacy, you know, and we cannot deny that Fidel Castro for years has exercised significant -- or has obtained significant sources of legitimacy from his charisma.  That will disappear, so that will be one less source of legitimacy that the regime will have, but there are others.

They have had sources of legitimacy as a result of the social gains of the revolution, but as Julia said, those are decaying.  The health-care system is crumbling, the infrastructure in Cuba is crumbling, so those things are being affected quickly.

And then of course there is the other source of legitimacy, which has been the status of victim of the U.S. imperialism.  And this is why I believe that if Fidel Castro goes and we lift his charismatic legitimacy, and we were to do something -- actions unilateral that would relieve or eliminate the confrontation with Cuba, we would eliminate another source of legitimacy.  Then you have a one-legged stool that's crumbling and it's not going to last long.  And this is why I believe that taking unilateral actions by the United States could significantly speed up the processes of change in Cuba.

The second comment on the Internet, we just had last week in New York right here at the Council of the Americas, the first-ever IT and social media summit on Cuba, and you will be surprised at how many of the restrictions and limitations on the expansion of social media and the Internet in Cuba are the result of the U.S. embargo.

Now, clearly this is something that the regime controls very deeply, but there are many ways to go around it and clearly everybody is looking for those ways and those things to happen, but a lot of the limitations exist right here in our own laws that prohibit this from happening.  

So those are the things -- those are the walls that we need to break down, and we need to open up to empower the Cuban people with all these tools that do make a difference, as they have in other parts of the world.

HRINAK:  And how do you bring them together to be an effective force the, Julia?  

SWEIG:  All those tools?

HRINAK:  Yeah, how do you -- when the people get these tools, who leads them?

SWEIG:  Well, look, you know, just to sort of draw together a few of these final questions, the relationship between political empowerment and economic conditions, the absence of leadership once the Castros go, the utility of these tools, there are no good answers to that, but, you know, I think, first of all, Meg, to your question and comment, the absence of, you said, consensus for change is absolutely true.  

There is, by and large, a stronger consensus -- there's a very strong consensus that people are frustrated and their expectations have been raised, and they want a better material and spiritual live and opportunity, but the Cuban population is a very conservative population too, and fearful of rapid change; educated enough to look around the world and see what that can mean, and especially nationalistic enough to see that with the guts of the framework of the U.S. policy still in place, the risk of rapid internal change happening while that framework is in place is too threatening.

So, the consensus exists by and large that is stronger for very, very slow change than for rapid change, and no consensus for big change, in my view, that is so undefined.

On the matter of the -- you know, there's a kind of passive resistance that takes place in Cuba.  Economic conditions are incredibly tough, and what you don't see, for lots of reasons that have to do with sophisticated repression and a history of it as well as this kind of underlying conservatism and consensus around entitlement to certain state services -- so you don't see conflagrations of people.  You don't see, because it's controlled here and there, use of social media tools the way you have seen in other places.

What you see is passive resistance.  You see people opting out of the system -- just not going to work, just throwing up their hands and existing on the bare minimum.  And that, you know, we could say, how could that possibly be sustainable, but it's been going on for a very, very long time.

And here I go back to what I believe Raul Castro might be trying to do, and that is to gradually open up opportunities for the creation of wealth, for productivity, without increasing inequality too much and without rupturing that consensus that is still in place.

Now, that's incredibly difficult but I think that's where it's going, and I don't see any kind of moment when the material deprivation experienced by everyone there is going to produce a political upheaval.

SALADRIGAS:  You know, if there is one truism about all transitions, it's that no one could have ever predicted when and how.  That is completely unknown, and the slightest event, the most unexpected of factors could trigger major change.

Change has its own dynamics.  The one thing that we need to understand in the Cuban-American community, and the one thing we need to understand in Washington, is that we cannot cause Cuba to change.  Only the Cuban people can, as I said earlier, on their own terms at their own time.

SWEIG:  But in that sense, their unilaterally getting rid of this failed policy absolutely has to be the first step.  It is getting ourselves out of their domestic politics, and hopefully getting the Cuba issue out of ours.  

HRINAK:  There is a new --

SALADRIGAS:  Let the Cubans bring about their own change.

HRINAK:  There is a new mandate in the council for meetings to reach conclusions.  Thank you all for helping us reach our conclusion.  (Applause.)  

Let me also say that Julia will be outside signing books.  And it's the hard-cover; the soft-cover is also available on Amazon.com or Barnesandnoble.com or wherever books are sold.  Thank you very much.

SWEIG:  We have the soft cover.


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