Early Tuesday morning, we learned that the Cuban presidency will be handed from Fidel Castro brother to his brother, Raul. Though little will change immediately, the announcement set off cheers in Southern Florida from Cuban expatriates.
Investors "should not expect an immediate change with a switch from one Castro brother to another," says David Cibrian, a law partner in charge of Strasburger & Price's international division who has twice testified before Congress about U.S.-Cuban trade relations. Still, observers may want to keep an eye on positive developments that could lead to change.
The U.S. has had an embargo on Cuban goods since 1962, after Cuba chose to nationalize American's corporate and private property. Cibrian, a son of Cuban immigrants, noted the embargo has continued more as a domestic policy issue as opposed to a foreign policy issue. Politicians have consistently spoken about Cuban-American policy during swings in elections years while appearing in Florida, while ignoring it in almost every other regard.
Many of the original Cuban expatriots have historically refused to consider a change in policy with a Castro running Cuba. The new generation of Cuban-Americans, like Cibrian, have a more pragmatic view than the prior generation. This flexibility, coupled with other other winds of change, could influence Cuban-American policy as soon as next year.
First, Raul Castro may well choose to take a less aggressive stance than his brother in an effort to improve his country's fortunes.
The Associated Press
has suggested Raul Castro may be more willing to consider change. He has been much more frank about poor conditions in Cuba, including its aging infrastructure, and has overseen experiments in a more market-style economy.
Cuba's economy has improved since the 1990s, mostly through growth in tourism and global trade. In fact, Cuba has many resources that could attract American corporations.
Cuba has a highly educated workforce. Cubans have comparable literacy rates with many of the industrialized nations around the world --
99.8%, according to an analysis by the Central Intelligence Agency, compared with the 99% in the U.S. Furthermore, the country remains one of the healthiest in the world when comparing statistics such as infant mortality and lifespan.
Cuba also has natural resources. It has long been known for its agricultural prowess in products like sugar, but Cibrian notes that energy companies may well take interest in Cuba. Currently, several French firms have expressed interest in exploring for oil. The problem for Cubans comes from the nature of their oil, which is high in sulfur, and requires the technological expertise of foreign firms like
from the U.S.
Change may come from the U.S., as well. The U.S. will choose a new president in November, which could lead to a change in Cuban policy. Cibrian expects that the political climate will thaw eventually.
All of the leading presidential candidates released statements on the retirement of Fidel Castro. Hillary Clinton commented:
"I would say to the new leadership, the people of the United States are ready to meet you if you move forward towards the path of democracy, with real, substantial reforms. The people of Cuba yearn for the opportunity to get out from under the weight of this authoritarian regime, which has held back 11 million talented and hardworking citizens of the Americas."
John McCain said:
"Cuba's transition to democracy is inevitable; it is a matter of when -- not if. With the resignation of Fidel Castro, the Cuban people have an opportunity to move forward and continue pushing for the moment that they will truly be free. America can and should help hasten the sparking of freedom in Cuba. The Cuban people have waited long enough."
Finally, Barack Obama said:
"If the Cuban leadership begins opening Cuba to meaningful democratic change, the United States must be prepared to begin taking steps to normalize relations and to ease the embargo of the last five decades. The freedom of the Cuban people is a cause that should bring Americans together."
One of those three candidates will probably soon become president of the U.S. They appear to be ready to work with a more open Cuba.
All of the pieces for positive change for Cuba are in place. What remains to be seen is whether Raul Castro will be able or willing to take the necessary steps to improve Cuban-American relations.