The Cuban Illusion: Keeping the Heat on Castro

Smith’s vision of a peaceful Cuban transition to democracy and a market economy, of Castro enacting increasingly deep economic reforms that would in turn oblige him to open the political system, may not be a fantasy. But he is wrong to view the embargo as an obstacle to that end. Castro, who has repeatedly made clear his contempt for capitalism, began economic reform only after the Soviet Union’s collapse deprived the island of the estimated $3 billion to $6 billion in aid and subsidies it had received annually for several decades. Cuba had been particularly dependent on heavily subsidized Soviet energy, and Castro needed hard currency to buy oil at market prices. The embargo prevented him from taking the easy way out -- luring tourists and foreign investment from Cuba’s natural market and best source of foreign capital, the United States. His only alternative was to entice capital from less interested and more distant sources. The economic reforms of the past three years were the only available solution to his problem.

Despite Smith’s claims, the reforms have not given individual Cubans much access to capital and property and are, therefore, still reversible. Castro’s goal, after all, is to accumulate as much hard currency as possible without relinquishing his control over the Cuban people. The recent tightening of the embargo all but ensures that deeper economic reforms will be forthcoming during the next few years -- not because Fidel Castro has embraced Adam Smith but because he has no other choice. Had the Brothers to the Rescue incident not occurred, the embargo might very well have been lifted after the U.S. presidential contest, and Cuba’s access to significant amounts of hard currency would then have offset the loss of Soviet aid, allowing Castro to open the country’s economic system in ways that would preserve the political status quo.

Finally, Smith raises the possibility that Castro will attempt to force the United States’ hand on the embargo by repeating his 1994 strategy of threatening America with a refugee crisis. As long as Castro continues to control Cuba, however, the United States will be susceptible to his periodic decisions to divert attention from Cuba’s internal problems by opening the emigration spigot. The best solution is democracy and an open economy in Cuba. And the best way to achieve those ends is to keep the embargo strong.

Susan Kaufman Purcell is Vice President of the Americas Society and coauthor of Latin America: U.S. Policy After the Cold War.