A cautious openness in Cuba…an attempt to save the economy amid American pressure

The Cuban government is moving to take new steps aimed at opening its faltering economy to Cubans residing abroad, especially in America, in an attempt to avoid a worsening economic crisis in light of continued pressure from the US administration.

These trends include allowing businessmen to establish projects inside the country and own real estate, as part of efforts to attract investments and stimulate the local economy.

Cuban Deputy Prime Minister, Oscar Pérez Oliva Fraga, confirmed that the government is open to establishing flexible trade relations with Cubans residing in the United States and their children.

Fraga explained during a television interview with NBC News that Cuba also seeks to develop economic relations with American companies, in addition to focusing on revitalizing vital sectors such as real estate, tourism, and infrastructure.

These statements indicate a noticeable shift in the position of Cuba, whose policy has long been characterized by hostility towards the Cuban community in the United States, a community that enjoys economic and political influence, and has often supported tightening sanctions on Havana, especially through its alliance with the American Republican Party.

On the other hand, US President Donald Trump, who imposed a stifling oil blockade on the island, escalated his tone towards Cuba, as he repeated on more than one occasion that the Cuban government was on the verge of collapse and was seeking to conclude a deal. He even went so far as to declare the possibility of “seizing Cuba” or “liberating” it, stressing that he “can do whatever he wants with it.”

sanctions

However, any actual and significant inflow of capital from Cuban-Americans remains contingent on the lifting of US sanctions, which still restrict most forms of economic dealings with Cuba.

So far, the Trump administration has not shown a willingness to ease these restrictions. In this context, Matthew Aho, a legal expert at the American law firm Ackerman, said that any real change requires consensus between the two parties, stressing that Cuban measures alone will not be sufficient to overcome the imposed restrictions.

According to Cuban laws, Cuban-Americans can invest in the island on the condition of obtaining residency within it, which practically places them under the authority of the existing political regime. Removing this requirement, along with other obstacles, is a potential step towards transforming the Cuban community abroad into an official segment of foreign investors.

For many years, the Cuban government refused to allow Cubans residing abroad to invest in the country, for fear of losing political control, the expansion of the private sector, and the emergence of a class of entrepreneurs that might pose a challenge to the regime in the future. However, the sharp deterioration in the Cuban economy prompted the authorities to reconsider these policies, in an effort to obtain foreign currencies and investments.

Emotional motivation

For his part, William LeGrand, an expert on Cuban affairs at the American University in Washington, believes that investors in Cuba are often emotionally motivated, given the difficult economic and commercial environment there. He said that the expected changes may contribute to improving the investment environment and enhancing the rights of foreign investors, pointing out that many small and medium-sized companies in Cuba already depend on financing from Cuban-Americans residing in the state of Florida, especially in cities such as Miami and Hialeah.

It is noteworthy that the tense relationship between the Cuban government and expatriates dates back to the beginnings of the rule of the late President Fidel Castro, when Cubans who left the country were called “gosanos,” a Spanish word meaning “worms.” However, with the deterioration of economic conditions, the regime became more flexible in dealing with them, and began to view them as an important source of hard currency, without abandoning its political grip.

About “The Wall Street Journal”

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Corrective measures

As part of its reform attempts, Cuba recently announced, under American pressure, a package of economic measures, which included allowing private companies to import and distribute fuel, in an attempt to alleviate the severe energy crisis. Despite these efforts, the country still faces major challenges, as it witnessed a complete collapse of the electricity system, as a result of fuel shortages and the dilapidated infrastructure of power generation plants.

. Any actual inflow of capital from the Cuban diaspora remains contingent on the lifting of US sanctions.

. New trends to attract investments include allowing the establishment of projects and ownership of real estate.