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A Recent Article on the Cuban Embargo

All evidence proves that Cuba, under communism, will always be in dire straights, with or without an embargo. I sometimes wonder if we are in fact aiding Castro with the Embargo. Propaganda got him where he is, and I'm sure has helped him remain in power.
 
The embargo is made to be convenient for those that need it. For example Altadis lately is selling Montecristo cigarettes in Cuba with tobacco from the US. They have a regular and a light version. Sounds kinda nutty huh? The packaging is tricky though, it says: "Made in EU". I asked the sales clerks where the cigarettes are from and they have all said: "Estados Unidos"(for those of you that are spanish impaired that means the good ol' USA). Now if Altadis was playing by the rules their product would say "Made in the USA". But with a little creative embelishment/strategic misrepresentation (also known as lying) they'll keep doing business there and avoid any fines from the GeeDubya cronies. The island is full of products made in the US, how did they get there? Did Fidel sneak in the middle of the night and load up at a Miami 7-11? Those are all brokered deals by Top Gun players. John
 
I do wonder if Cuba's going to be worse off or better off after the embargo. What's really lacking in Cuba is not raw materials (although there's plenty of lack of that), skilled and talented labor or the entrepreneurial spirit (they have PLENTY of that). It's the capital needed to rejuvenate their aging industrial and agricultural infrastructure; they spend so much time focussing on how to do more with less that no one stops to consider how well Cuba might be doing if they had the capital they needed. (The capital investments that Cuba does get are quick-buck tactical ones, not strategic ones. Unless you consider tourism strategic. Which I don't.)

Will capital flow into Cuba following the end of the embargo? Almost certainly, both from the Cuban diaspora and countries looking to jump into new, unexplored markets. I suspect that moving away from a state-controlled economy will be slow, but it's a process that has been ongoing for the last 20 years. More than anything the embargo has imposed tremendous frictional costs on doing business in Cuba, for the benefit of a few well-connected American firms and a few American politicians.
 
I do not agree with the Economist on all issues but I think its writers make logical arguments about the Cuban embargo.

Cuban Article

-Mark

edited. it's versus its
 
If anybody is interested, I will happily share an academic article on US-Cuban relations titled Fear and Loathing of Fidel Castro: Sources of US Policy Towards Cuba via PM.

The article was written in 2002 but is still relevant.

-Mark

edited. to make more sense.
 
Marco-Polo said:
I do wonder if Cuba's going to be worse off or better off after the embargo. What's really lacking in Cuba is not raw materials (although there's plenty of lack of that), skilled and talented labor or the entrepreneurial spirit (they have PLENTY of that). It's the capital needed to rejuvenate their aging industrial and agricultural infrastructure; they spend so much time focussing on how to do more with less that no one stops to consider how well Cuba might be doing if they had the capital they needed. (The capital investments that Cuba does get are quick-buck tactical ones, not strategic ones. Unless you consider tourism strategic. Which I don't.)

Will capital flow into Cuba following the end of the embargo? Almost certainly, both from the Cuban diaspora and countries looking to jump into new, unexplored markets. I suspect that moving away from a state-controlled economy will be slow, but it's a process that has been ongoing for the last 20 years. More than anything the embargo has imposed tremendous frictional costs on doing business in Cuba, for the benefit of a few well-connected American firms and a few American politicians.
Click to expand...

Cuba needs more than "capital flow" -- There are plenty of companies/banks in Europe that could provide the capital flow. Yet they largely do not. Why? Because of ROI. What's the point of investing in a business or investing money if the state owns your work, and can confiscate your property at any time?

The embargo is largely symbolic... I find it a little bit arrogant to believe that the USA is so important that it can make or break a nation. Plenty of other countries can trade with Cuba, or do business in Cuba. The problem isn't the embargo, it is the government and its policies.

Rodrigo de Jerez said:
I do not agree with the Economist on all issues but I think its writers make logical arguments about the Cuban embargo.

Cuban Article

-Mark

edited. it's versus its
Click to expand...

I think The Economist has proven time and time again that it is one of the few magazines worth subscribing to and reading.
 
moki said:
Cuba needs more than "capital flow" -- There are plenty of companies/banks in Europe that could provide the capital flow. Yet they largely do not. Why? Because of ROI. What's the point of investing in a business or investing money if the state owns your work, and can confiscate your property at any time?
Click to expand...

That's not entirely opposed to my post - companies make short-term investments because they can get their required ROI with less risk. That said, under the Helms-Burton Act, it isn't the Cuban government that is threatening to expropriate property from investors in Cuba. The sooner the embargo goes, the better for everyone concerned: the Cuban people, the government and rule of law in Cuba, and the United States, which can devote its attention and resources to places which are real problems.
 
I cannot help but muse that the embargo on Cuba limits the effectiveness of a potentially effective American diplomatic tool, soft power.

-Mark
 
Marco-Polo said:
moki said:
Cuba needs more than "capital flow" -- There are plenty of companies/banks in Europe that could provide the capital flow. Yet they largely do not. Why? Because of ROI. What's the point of investing in a business or investing money if the state owns your work, and can confiscate your property at any time?
Click to expand...

That's not entirely opposed to my post - companies make short-term investments because they can get their required ROI with less risk. That said, under the Helms-Burton Act, it isn't the Cuban government that is threatening to expropriate property from investors in Cuba. The sooner the embargo goes, the better for everyone concerned: the Cuban people, the government and rule of law in Cuba, and the United States, which can devote its attention and resources to places which are real problems.
Click to expand...

Lifting the embargo will not change much of anything as long as the current government policies are in place. The only thing I might argue would happen is that the "soft power" that has been mentioned here might come into play.
 
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