Cuba should beware of Westerners bearing gifts
The normalization of relations between the United States and Cuba, announced Wednesday by President Obama, is a highly welcome step. Our hostile posture against Cuba stopped making sense in 1989, if not before then, and it's long since time we allowed the country back into the full community of nations. If the U.S. can get along with China and Vietnam, there's no reason it can't do the same with Cuba.
The president can't lift the embargo against Cuba, since that was imposed by Congress. Though dead-end reactionaries like Marco Rubio and Lindsey Graham will likely fight for the embargo tooth and nail, within a few years it will be gone as well. In addition to the fact that the policy has failed for more than 50 years, popular opinion — and most crucially, the opinion of Cuban-Americans — is changing.
But while economic liberalization presents Cuba with opportunities, it comes attached with huge potential pitfalls. To be blunt, Cuba in all likelihood faces a bleak future. The track record of post-Communist nations is not good. Indeed, the upside of the embargo remaining in place for a few years is that it will give Cuba time to prepare. Here are a few things both Cuba and America might keep in mind.
First, don't try to do everything all at once. Abolishing wage and price controls, privatizing state industries, and liberalizing trade may be good ideas. But it's unquestionable that doing them all very fast is bad. Jeff Sachs tried that in Russia with his signature "Big Push," and it was a world-historical disaster. Russian GDP fell 62 percent, and didn't bottom out until the year 2000. Life expectancy fell by five full years. And a handful of well-placed oligarchs absconded with most of the state's assets.
A market economy that works well for most people (think Sweden and Norway) requires some deep-rooted social structures — structures that are seriously eroded by long periods of totalitarian dictatorship. Simply quaffing laissez-faire policy in one gulp will lead almost certainly to plutocracy.
Above all, Cuba should prioritize maintaining its fairly high-quality health-care system. A slower, more measured transition would make that easier.
Communist insiders ought to be careful themselves. They might be able to make out like bandits in a post-Communist resource grab, but they also might be overthrown, exiled, or killed. For 50 years, the Cuban regime has been able to blame its atrocious economic performance on the American embargo. Without that excuse, the government will likely be faced with rising demands for better performance.
Vietnam and China show it's possible to thread this needle, but it's definitely not a given. We can only hope that President Raúl Castro and others in the Cuban regime will recognize that the onset of democracy is probably inevitable, and ease that transition rather than clamping down and risking civil war.
America, for its part, should consider not using its stupendous advantage in military and economic strength to stuff neoliberal policy down Cuba's throat the second its markets open. I frankly doubt we can manage this. Congress has rarely been quite so overtly owned by the rich, who are undoubtedly slavering over a fresh nation to plunder.
So yes, amid the excitement, there's no denying the situation is grim. It's not likely that either a rattletrap Congress or the brutally repressive Cuban government will be able to manage decent, wise policy. But now that we're here, it's worth thinking about how both countries can manage as best as possible.