A Dinner with the Cubans/Haiti Alert Jude Wanniski and Irene Phillipi de Soto October 12, 1993

We were privy to an extraordinary event this past weekend, that persuades us for the first time that Fidel Castro's island nation of more than 11 million people 90 miles off the coast of Florida may soon begin economic integration with the Western Hemisphere. The occasion was a dinner hosted Saturday by Rep. Charles Rangel [D-NY] for Cuban Foreign Minister Roberto Robaina. Rangel made his home available so that Robaina could present his outline for Cuba's opening to some two dozen representatives of New York's financial, corporate, academic and labor elite. I attended the session on behalf of Jude Wanniski, who had previous commitments on the West Coast. Rep. Rangel, who for 20 years has maintained contact with Cuba, had invited Jude to acquaint the Cubans with Polyconomics' bottom-up approach to economic change.

Robaina, a very impressive 37-year old, is in New York for the autumn session of the U.N. General Assembly. He is obviously intent on using his time here to convince skeptics that Cuba is prepared to change its political economy if the world is prepared to welcome the change without demanding Castro's demise. Robaina suggested that his appointment as foreign minister unleashed a "storm" in Cuba since the old guard bureaucracy did not take comfort in his rise. In fact, Robaina was once implicated in a plot against the regime, but somehow emerged stronger than ever, while the others involved paid dearly. Internally, he has been widely criticized by the establishment for wearing a bracelet, t-shirt and jacket with rolled-up sleeves. After his performance Saturday night, I am more inclined to interpret his fashion as a sign of his determination to work at replacing the crumbling edifice of Cuba's political economy. Robaina clearly understands that Cuba's model is exhausted and that pragmatic openness is required for the nation's survival. He acknowledged that for the half of Cuba's population born after 1959, the "sacred conquest" of the revolution has little meaning. Instead, they want the opportunity to achieve their own potential in ways meaningful to them. This, it appeared, was a diplomatic way of suggesting what at one time no Cuban could hint at without fear of confronting a firing squad: that Castro's command economy is incapable of supporting the needs of the people, old or young.

Robaina assured his audience that the process of economic openness has begun in earnest: 110 different labor regulations have been liberalized to permit workers to be self-employed; new rulings allow foreign investment in all sectors of the economy; land possession liberalization allows private leasing of sugar and non-sugar acreage. There is enormous pressure to make rapid changes due to the dire economic circumstances of the island, Robaina said, and very little is sacred. Still, Cuba wants to maintain policies that the regime believes have shown some success, such as health care and science training. Finding some way to "save face" is also important to the Cubans. They will insist that there be no slipping back to dependency and will accept no prescription that could be perceived as entailing a loss of sovereignty. Cuba will not import a foreign model that does not fit the domestic reality. Robaina insisted, for example, that the Chinese model alone does not suit Cuba, which seeks to learn from the approaches of several different emerging economies as diverse as Mexico, Spain, Vietnam or China. The budding Cuban entrepreneurs, Robaina said, need many points of view on how to succeed.

The Foreign Minister acknowledged that Cuba's ruling elite was taken aback by the severing of the Soviet economic lifeline. Bureaucratic inertia paralyzed rapid adjustment. Consequently, no contingencies were developed, and the changes came faster than expected. Two million Cuban children are now at risk of dying from malnutrition or lack of medical attention. Shortages of food and medicine are now intolerable. From 1986 through 1989, Cuba had zero economic growth. GNP declined by 10% in 1990 and by 20% per year in 1991 and 1992. For the first time, there are voices of dissent from the ranks of pro-Castro loyalists demanding reform. While continuing skepticism toward Cuba's intentions is certainly justified, the Cuban regime in desperation now recognizes there is no alternative to fundamental change.

Striving to come across as rational and pragmatic rather than passionate and ideological, Robaina portrayed a Cuban regime not as bad as it is seen internationally, nor as good as it would like to think it is. He also acknowledged that the U.S. embargo is not the only source of Cuba's domestic problems. He defined the culprits as three blockades: 1) the 30-year U.S. economic embargo; 2) the termination of Soviet economic assistance since 1989; and 3) the domestic blockade of ideas that hinders Cuba from finding appropriate solutions to its problems. The government of Cuba, he said, is willing to work hard on the third problem if the U.S. will lift the first. Indeed, it is clear the U.S. embargo remains a major factor of economic life on the island. Eight of every ten new ventures begun with foreign capital are ultimately aborted because of the uncertainty and political pressure created by the U.S. embargo.

As for the Cuban exile communities, Robaina said Cuba is willing to conduct dialogue with all Cubans and hopes for normal relations even with those who have supported the blockade. Cuban exiles hold claims to $21 billion in real property on the island. Until now, the U.S. government has supported these claims, to the extent that communiques are sent to governments worldwide warning anybody interested in doing business in Cuba to be aware of these claims. Minister Robaina said that if the U.S. embargo were lifted, the Cuban government would be willing without restriction to negotiate the issue of property rights. He also stated his determination to produce what he called a "revolution inside the ministry of Foreign Affairs," putting the goals of the new generation first and changing the image that Cuba has abroad. One of his more striking statements was to assert that he must "interpret" what Castro says rather than "repeat" Castro's statements. As close observers of Castro's revolution may be aware, until now members of the Cuban government were only to repeat and never interpret the statements of their leader.

Robaina took advantage of the interest of his audience, arriving late to the meeting and, in typical Cuban fashion, speaking non-stop for two hours. Unfortunately, this left little time for questions before his departure, but Robaina expressed his willingness to establish close contact with the U.S., and stated that he will soon return to New York. I sat beside Cuba's First Vice Minister of Foreign Affairs and Ambassador to the UN, Fernando Remirez de Estenoz. Remirez de Estenoz belongs to the same generation as his boss, and has the reputation of being Mr. Robaina's right hand. He is considered an active agent of change in the new Ministry of Foreign Affairs, arriving at his post only 12 days earlier. In an informal chat, I had the opportunity to explain the Polyconomics world view based on entrepreneurial growth. He expressed great enthusiasm and we arranged to meet next week, after the hectic frenzy of the General Assembly recedes. Rep. Rangel introduced me to Alfonso Fraga, Chief of the Cuban Interest Section in Washington -- a post as close to being Cuba's ambassador that the present political circumstances allow. Mr. Fraga also expressed interest in Polyconomics' approach and asked me to call upon him in Washington for further talks and a possible Havana visit. As an observer, I could not help but wonder if, paraphrasing early Fidel Castro, "the time is ripe for the guns to kneel in front of the people." The time may be ripening for the Cuban people to begin emerging from their fight for survival and to the risk and reward of becoming reacquainted with the global economy.

Irene Philippi de Soto

HAITI ALERT: Senate Minority Leader Bob Dole was exactly right in arguing for the withdrawal of all American personnel in Haiti, and it's nice to see the return this afternoon of the U.S. warship Harlan County. The UN's Dante Caputo clearly has not worked out a peaceful return of President Aristide, as we'd been led to believe, and it makes no sense for the United States to install, by force, a man who could not keep the seat he'd won, even if by democratic election. Aristide's swelled head and socialist bent has led him to tromp on the rights of the one-third of Haitians who had voted against him -- the business and propertied class. Note how impossible it is to find anything in the news media that relates to the debate over public finance that led to the ousting of Aristide, who in September 1991 was about to sign a tax-the-rich IMF agreement. In a country without checks and balances, it is not sufficient to mouth support for a political leader simply because he won a "democratic election." Will we send troops to protect Boris Yeltsin, the "democratically elected" czar of Russia? It is cultural arrogance, pure and simple, that now drives U.S. foreign policy, in Bosnia, Somalia and Haiti, just as it sucked us into Vietnam in 1961. I had lunch with the UN's Caputo in August and warned him all his work would go down the drain if he did not incorporate an anti-IMF economic policy in Haiti. He replied simply that economics was not part of the UN's mission.  (JW)