The Cuban reintegration story goes back further than that which is being discussed currently in the news. To understand the depth behind the discussion of Cuba and the U.S. restoring diplomatic relations, there should be an active discussion on how relations were severed to begin with. In 1898 the U.S. declared war on Spain, ultimately winning and gaining all claims to Cuba. In 1960 all America businesses in Cuba are nationalized without compensation. The U.S. then breaks diplomatic relations with Havana and imposes a trade embargo in response to reforms made by Castro. These reforms included all foreign assets in Cuba being nationalized, American imports having higher taxes, and establishing a trade deal with the Soviet Union which landed Cuba a title by the U.S. State Department as a State Sponsor of Terrorism. To combat this, President Eisenhower slashed the import quota for Cuban sugar, freezing assets in America and imposing a near-full trade embargo cutting off diplomatic ties with Castro’s government.
President Obama gave executive orders in December to restore the diplomatic relations between America and Cuba. Movement in congress was slow but came to support the lifting of a travel ban, trade, telecommunications, finance, compensation for nationalized property and human rights. Despite the slow movement in congress, overall support for engagement with Cuba is widespread according to a poll released by the Adrienne Arsht Latin America Center.
The road to bring Cuba back into the international financial system will be one that is long and treacherous but there have been previous examples given by countries such as Vietnam and Albania that were previously isolated economies and have successfully been reintegrated. These models can be evaluated by the Cuban government along with the U.S. to glean insight about how to appropriately go about mending five decades of broken policy. The Atlantic Council outlines a very thorough map to merging the country back into the world economy which includes three main points: 1) describing how other isolated economies have been brought back into the economic fold such as discussed above. 2) Urges the U.S. to put aside its long outstanding objections to Cuban membership in the International Financial Institutions and 3) explains why it’s also time for Cuba to reevaluate its engagement with these institutions.
From these three points an explanation is sought to clarify Cuba’s relations with these economic institutions. Cuba withdrew from the World Bank in 1960, the IMF in 1964 and was never a member of the Inter-American Development Bank because it began in 1959, the year of the revolution. This raises the question; does Cuba really know the benefits of investment in capital? If these groups would begin engaging the Cuban government, Cuba may learn or come to understand the benefits of investing but Cuba will not likely reach out on their own. The IMF, IDB and the World Bank should offer advice and training as was done in Albania in order to create a relationship and trust between the organization and Cuba to hopefully stimulate economic strengthening and growth.
The main functions of these international financial organizations are clear in their description and the majority of these organizations are necessary in the economic reintegration of Cuba into the world economic system. One partnership that should be severed on behalf of Cuba is with the IMF (International Monetary Fund) whose basic function is to monitor monetary activities between countries and to ensure correct and fair transactions. Being that IMF works so closely with exchange policies, they often do a lot of work designing a countries economic policy, which at this point is a necessity for Cuba. A second relationship that should be formed on behalf of Cuba is one with the IDB, whom Cuba was never a member of but will hopefully see the benefit of joining here in the near future. The basic function of the IDB is to grant loans for high economic and social significance.
Joining these financial institutions would do more than boost the Cuban economy; it would boost their morale among other countries. The majority of countries that make up the U.N. are members of the IMF and the WB and by joining these organizations, Cuba sends out the message that they are a team player and ready to become financially better off. Also, the cost of foreign trade may significantly drop by them being a part of the international financial architecture because it would reduce the cost Cuba pays for being a high risk.
The Cuban reintegration is something that could possibly yield benefits for everyone, especially the United States and this is a key point Cuba should campaign on to encourage involvement from other countries and investors worldwide. The upward mobility is endless with the right approach to Cuba’s soon to be total reintegration into the world economy.
Kidada Dowell
http://www.cfr.org/cuba/us-cuba-relations/p11113
http://www.realclearpolitics.com/2015/08/15/cuba039s_slow_walk_to_freedom_363388.html
http://www.atlanticcouncil.org/images/publications/Cuba_IFI_English.pdf
http://progresoweekly.us/cuba-and-the-international-financial-institutions-has-the-time-come/
President Obama gave executive orders in December to restore the diplomatic relations between America and Cuba. Movement in congress was slow but came to support the lifting of a travel ban, trade, telecommunications, finance, compensation for nationalized property and human rights. Despite the slow movement in congress, overall support for engagement with Cuba is widespread according to a poll released by the Adrienne Arsht Latin America Center.
The road to bring Cuba back into the international financial system will be one that is long and treacherous but there have been previous examples given by countries such as Vietnam and Albania that were previously isolated economies and have successfully been reintegrated. These models can be evaluated by the Cuban government along with the U.S. to glean insight about how to appropriately go about mending five decades of broken policy. The Atlantic Council outlines a very thorough map to merging the country back into the world economy which includes three main points: 1) describing how other isolated economies have been brought back into the economic fold such as discussed above. 2) Urges the U.S. to put aside its long outstanding objections to Cuban membership in the International Financial Institutions and 3) explains why it’s also time for Cuba to reevaluate its engagement with these institutions.
From these three points an explanation is sought to clarify Cuba’s relations with these economic institutions. Cuba withdrew from the World Bank in 1960, the IMF in 1964 and was never a member of the Inter-American Development Bank because it began in 1959, the year of the revolution. This raises the question; does Cuba really know the benefits of investment in capital? If these groups would begin engaging the Cuban government, Cuba may learn or come to understand the benefits of investing but Cuba will not likely reach out on their own. The IMF, IDB and the World Bank should offer advice and training as was done in Albania in order to create a relationship and trust between the organization and Cuba to hopefully stimulate economic strengthening and growth.
The main functions of these international financial organizations are clear in their description and the majority of these organizations are necessary in the economic reintegration of Cuba into the world economic system. One partnership that should be severed on behalf of Cuba is with the IMF (International Monetary Fund) whose basic function is to monitor monetary activities between countries and to ensure correct and fair transactions. Being that IMF works so closely with exchange policies, they often do a lot of work designing a countries economic policy, which at this point is a necessity for Cuba. A second relationship that should be formed on behalf of Cuba is one with the IDB, whom Cuba was never a member of but will hopefully see the benefit of joining here in the near future. The basic function of the IDB is to grant loans for high economic and social significance.
Joining these financial institutions would do more than boost the Cuban economy; it would boost their morale among other countries. The majority of countries that make up the U.N. are members of the IMF and the WB and by joining these organizations, Cuba sends out the message that they are a team player and ready to become financially better off. Also, the cost of foreign trade may significantly drop by them being a part of the international financial architecture because it would reduce the cost Cuba pays for being a high risk.
The Cuban reintegration is something that could possibly yield benefits for everyone, especially the United States and this is a key point Cuba should campaign on to encourage involvement from other countries and investors worldwide. The upward mobility is endless with the right approach to Cuba’s soon to be total reintegration into the world economy.
Kidada Dowell
http://www.cfr.org/cuba/us-cuba-relations/p11113
http://www.realclearpolitics.com/2015/08/15/cuba039s_slow_walk_to_freedom_363388.html
http://www.atlanticcouncil.org/images/publications/Cuba_IFI_English.pdf
http://progresoweekly.us/cuba-and-the-international-financial-institutions-has-the-time-come/